Image source: Du Ge
In May 2015, Zhu Yanfeng, who had been out of the auto industry for 8 years, suddenly became the new head of Dongfeng Motor Company, causing an uproar. Who would have thought that the former “young marshal” of FAW Group, who once said that “I will always be a FAW person in my bones”, eventually took on the burden of “Second Automobile”.
Zhu Yanfeng is one of the well-known figures in China’s auto industry. He joined FAW Group at the age of 22 and became the chairman of FAW Group at the age of 38. He is not only the youngest chairman in the history of FAW, but also the youngest helm of a large state-owned enterprise in China. By. He has led the overall reform of FAW, shut down unprofitable sectors, and acquired Tianjin Automobile, making FAW China’s first million-dollar car company.
But looking back at Zhu Yanfeng’s 7 years in Dongfeng, it is far less beautiful than FAW’s time. In the year he took office, Dongfeng’s overall sales volume was 3.8725 million, of which 710.7 thousand were accounted for by Shenlong Motors, and the overall sales reached a high of 4.2767 million in the second year. As a result, since 2017, Dongfeng’s sales have entered a downward channel. The annual sales of Shenlong once fell to 50,000 units, and Dongfeng Renault and Dongfeng Yulon were directly out of the market.
Today, Dongfeng gives the impression that its autonomy is weak, joint ventures are chaotic, and new energy sources are struggling to catch up. And the former “young marshal” Zhu Yanfeng has been questioned for the past few years. He has been standing still in the past few years. Can he still solve these problems of Dongfeng at the age of 61?
1
Former “Young Master”
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Zhu Yanfeng is definitely a legendary figure at FAW. He joined FAW after graduating from university in 1983, and was transferred to the Standing Committee of Jilin Province in 2007. He stayed for 24 years.
During this period, he started as a technician in the instrumentation workshop of a thermal power plant, and successively served as a senior engineer of the technical section of the measurement department, the deputy section chief of the research and development section of the measurement department, the director of the foreign economic and trade department, the manager of the import and export company, and the general manager of the group. He grew rapidly.
Among them, the most amazing is that he became the chairman of FAW Group in 1999. At that time, Zhu Yanfeng was only 38 years old. He was the youngest “head” of the four major state-owned car companies, so he was called “Young Marshal”.
However, when he took over FAW, it was the most difficult time for FAW, facing problems such as insufficient equipment operation and poor corporate efficiency.
In 1998, the total assets of FAW’s 38 enterprises were 19.1 billion yuan, but the total liabilities reached 15 billion yuan. At that time, the management also called on employees not to work during the day, but to go to work at night, because electricity at night is cheaper and can reduce costs. Even so, wages are often not paid out.
Zhu Yanfeng is a real reformer. After he took office, he immediately made a series of restructuring actions. First of all, according to the principle of “capable main body, divestiture of auxiliary”, start the subsidiary management responsibility system, position Jiefang truck and car as the main business, and divest directly affiliated professional factories such as blank and auxiliary.
Next, deal with people’s problems. Zhu Yanfeng adopted the policy of “separating support from work”, dividing the employees into two types: those who work on the post and those who are supported after leaving the post. For those employees who are supported by leaving the post, they can only receive the minimum living expenses, and they also need to receive training and rotation training. In order to participate in the actual work as soon as possible.
In this way, by 2000, FAW’s functional departments were reduced from 47 to 22, and management positions were also reduced by 30%. But because of this, Zhu Yanfeng offended many FAW employees. “Circle Visibility” noted that to this day, many people still express dissatisfaction under the news about Zhu Yanfeng, saying that because of the lack of employee benefits, more layoffs have occurred.
Of course, these are just to reduce the burden, not to generate income, so he actively carried out mergers and reorganizations and external cooperation. The most typical case is the reorganization of FAW and Tianjin Automobile Industry (Group) Company and the joint venture with Toyota in 2022. “Tianyi Reorganization” was the largest reorganization event in China’s auto industry at that time, which brought a lot of bonuses to FAW in terms of sales and profits.
Under a series of measures, in 2004, FAW achieved the annual sales of one million vehicles and won the pride of No. 1 in China. In 2005, FAW entered the “Fortune 500”, and Zhu Yanfeng’s reputation became more and more loud.
Until he left FAW for politics in 2007, Zhu Yanfeng looked back on his career in FAW and said, “I will always be a FAW person in my bones.”
2
Uncontrollable East Wind
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Unexpectedly, after 8 years in politics, Zhu Yanfeng once again returned to the automotive industry. On May 6, 2015, he went south to Wuhan and was officially appointed as the chairman and secretary of the party committee of Dongfeng Motor Corporation.
At that time, Dongfeng was also a cumbersome elephant, and the corruption problem was particularly serious. Just a few months after Zhu Yanfeng took office, Zhu Fushou, deputy secretary of the company’s party committee and general manager, was exposed for disciplinary violations and was investigated by the Central Commission for Discipline Inspection.
It is normal for people to be unstable under the anti-corruption campaign, but one thing is good. When Zhu Yanfeng took over Dongfeng, the company’s overall development momentum was good. In 2015, the overall sales volume has exceeded 3.8 million vehicles, when Shenlong Motors was at its peak, with annual sales exceeding 700,000 vehicles. Self-owned brands are also remarkable, with sales of 1,218,500 units, including 781,200 units of self-owned passenger vehicles and 437,300 units of self-owned commercial vehicles.
This is much better than the situation when he first took over FAW. Therefore, on the first anniversary of taking the helm of Dongfeng, Zhu Yanfeng made a strategic plan for the four major goals of the “13th Five-Year Plan”: by 2020, the production and sales scale will exceed 5.6 million high-quality vehicles; The brand strength has been significantly improved, and the operating efficiency has been further improved; the overseas sales of products are at the leading level among the overseas sales of Chinese brands; the new energy sales target is more than 300,000 vehicles, and the core technology and resource control capabilities have been significantly improved.
Judging from the strength of Dongfeng at that time and Zhu Yanfeng’s past record, it seems that it is not too difficult to achieve the above goals. However, the actual situation is that in 2016 and 2017, on the basis of superior sales, Dongfeng achieved steady growth, with sales reaching 4.2767 million and 4.12 million respectively. However, since 2018, sales have been declining steadily, from 3.83 million to 3.2753 million in 2021.
As one of the oldest auto joint venture projects in China, Shenlong has dropped from a high of 700,000 in 2015 to 50,300 in 2020.
What makes Zhu Yanfeng even more embarrassing is that various sectors of the company have experienced problems, and their own brands cannot be supported, and many joint venture projects have withdrawn or reduced their shareholding ratios.
First, let’s look at our own brands. Dongfeng’s own brands include Fengdu, Venucia, Scenery, Fengxing, Fengshen, Xiaokang, Yufeng, as well as two new energy brands, Lantu and Mengshi. The sales volume of the “big autonomy” composed of so many brands is only 35.61 in the first three quarters of this year. 10,000 vehicles, far behind BYD, Geely and Changan, and their popularity is also at the bottom of the industry.
Let’s look at joint venture brands. In the first three quarters of this year, its joint venture brands sold a total of 1.138 million vehicles, a year-on-year decrease of 18.4%, which shows that the growth is weak. And in the past few years, the joint venture company has undergone changes one after another: in 2020, Dongfeng sold the equity of Dongfeng Renault, officially ending the cooperation with Renault; in 2021, it sold its 25% stake and exited Dongfeng Yueda Kia; in the same year, Dongfeng Yulong announced bankruptcy and reorganization. No one has picked up so far.
Not long ago, Stellantis CEO Tang Weishi revealed that he may adopt an “asset-light” model for brands such as Peugeot and Citroen in the Chinese market, which means that Shenlong Motors is also caught in a dilemma.
This may be a test for Zhu Yanfeng, an old car guy. The reform methodology in the past is no longer suitable for the new market environment, and Dongfeng needs a new “prescription”.
3
new sustenance
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There are a lot of eggs in Dongfeng’s basket, but the two high-end new energy vehicle brands, Lantu and Mengshi, have the most high expectations. High-end and new energy are the pain points of most independent brands now, and Zhu Yanfeng also hopes to make a comeback here.
But whether it is Lantu or Mengshi, it seems to be a product that hastily entered the game in order to cater to the era of electrification.
Lantu Automobile was established in 2018, and the brand was officially released in July 2020. In June 2021, the first car Lantu FREE was announced and officially delivered in August 2021.
In 2018, there were already more than 10 new power models sold online in the market, and the sales volume of new power car companies reached 26,000 that year. By the time Lantu FREE was officially delivered, the monthly delivery of Ideal ONE had exceeded 9,000 units, and Weilai had nearly 6,000 units.
After delivery, the performance of Lantu may not be able to satisfy Zhu Yanfeng. In 2021, the sales volume of Lantu FREE will rise all the way, from 408 units in August to 3,330 units in December, becoming the fastest electric vehicle brand to achieve delivery of over 3,000 units in a single month. However, in the first three quarters of this year, the cumulative sales volume of Lantu Motors was 13,600 vehicles, and the average monthly sales volume was only more than 1,000 vehicles. You must know that this year’s lowered sales target of Lantu is 31,000 units, so the possibility of accomplishing the target is slim.
Moreover, Lantu’s profitability is still far away. According to the pre-disclosure announcement of Lantu’s capital increase project this year, Lantu’s operating income in 2021 will be 1.766 billion yuan, with a net loss of 706 million yuan; in the first half of this year, the operating income will be 1.886 billion yuan, with a net loss of 737 million yuan.
I still remember that at the beginning of the launch of the Lantu brand, Dongfeng provided enough layouts for Lantu, and leaders such as the deputy governor of Hubei Province, the secretary of the Wuhan Municipal Party Committee, the deputy secretary of the Wuhan Municipal Party Committee, and the mayor of Wuhan all attended, saying that the release of Lantu is not only a It is a milestone event in the development history of Dongfeng and a happy event in Wuhan’s economic and social development. Now it seems that Lantu has both joy and worry for Zhu Yanfeng.
Another Mengshi brand, officially released on August 27 this year, also released the Mengshi intelligent off-road architecture M TECH, the brand’s exclusive “M” logo system and two concept cars M-Terrain and M-Terrain S. The first luxury electric off-road vehicle, the M-Terrain, is expected to be put into production in the third quarter of 2023.
Like Lantu, Mengshi is a brand built by the whole group with a great mission. It is hoped to become an accelerator for Dongfeng Renewal to become a new state-owned enterprise of science and technology. Zhu Yanfeng said bluntly at the press conference: “The mission of the warrior reflects the mission of Dongfeng, and the dream of the warrior reflects the dream of Dongfeng.”
As for whether Mengshi can realize his dream for Zhu Yanfeng, it is still unknown. What can be perceived is that the “luxury electric off-road vehicle” sounds very small.
Zhu Yanfeng, who was born in 1961, is 61 years old this year, the age at which many people retire. He has been at the helm of the Dongfeng ship for more than 7 years, and he has not seen any outstanding results. Before retiring, can he rely on the new sustenance to draw a perfect end to his Autobot career?
Author | Liu Yuanyuan
Source | Car Visibility
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