The “light asset” of the legal system is the gap between the Seine and the Yangtze

“If we move forward with the strategy we’re taking now, then we don’t need a factory in China.”

At this year’s Paris Motor Show, Stellantis Group CEO Carlos Tavares once again made a surprising statement. The group is considering implementing an “asset-light” strategy in China for its brands such as Peugeot and Citroen. If the strategy is implemented, it means that the Stellantis Group may completely stop its car production plan in China. The Stellantis Group said the same in July when it terminated its Jeep joint venture in China, GAC Fick.

Compared with the slogan of “will not give up the Chinese market” that Tang Vishi has repeatedly repeated externally in the past two years, today’s “comprehensive asset-light” transformation in China reveals the bitterness and helplessness of Stellantis in losing China, the world’s largest electrification market. It’s just that Tang Weishi didn’t realize the problem and continued to make mistakes. In this issue of “Aika Unicorn SHOW”, let’s talk about the “light assets” of the legal system and what is the number of ways in China.

Tang Weishi – scolding mother when you put down the bowl

Tang Wei is a typical figure who “controls costs and continues to make profits” in the comments of relevant media around the world. This is closely related to the 30 years of working experience in Renault after graduation, and is also greatly influenced by his mentor Ghosn, who graduated from the same university and grew up in the Portuguese context. This is Ghosn’s secret to saving Renault Nissan, and it is also Tang Wei’s success at PSA.

Therefore, from Renault to PSA, to the Stellantis Group after the merger of PSA and FCA, after many years, Tang Weishi has been able to gain a firm foothold in the global automotive world, which is impossible without a few brushes. It is such a “ruthless” Tang Weishi, a few words can push him to the forefront.

1

“Europe should learn from the United States and subsidize it”

This is an out-of-the-box question for China’s auto industry, and we have no comment.

2

“China’s market policy intervention is too strong”

The “policy intervention” mentioned here, Tang Weishi refers to the new energy policy. However, in recent years, when domestic consumers mention new energy vehicles, why do they first think of Chinese brands? The main consumption also revolves around Chinese brands, rather than joint venture models? The main reason is that the product power has far exceeded that of European electric models. The traditional old European car companies use “oil-to-electricity” models, and set high prices and wait to collect money, it has been difficult to fool Chinese consumers.

Speaking of the field of fuel vehicles, the story of BMW’s same THP engine has been told for more than ten years, and BMW has also updated two generations of products, and French car companies, have you really developed good products for the Chinese market?

3

“China prefers local brands and is not friendly to foreign brands”

For this, perhaps every Chinese consumer, as well as Chinese car users, has a voice.

Peugeot, Citroen and Volkswagen are the first foreign car brands to enter China, but the development history of the three is quite different. Beverly, Santana, and Jetta were once listed as the top three in the early years of the Chinese auto market. Guangzhou Peugeot 505 is also a very classic mid-size car, which has left a strong mark in the Chinese auto market. However, from the establishment of the joint venture company to the construction of the factory and the production, without the support of the national government and banks, Peugeot Citroen would gain a firm foothold in China and keep pace with the Jetta Santana for many years, where did it come from?

What makes people sad is that after years of hard work in the domestic market, French cars have left the label of “arrogance” in the minds of the Chinese people. This arrogance is reflected not only in the pricing of the models, but also in the inattentive and opinionated iterations of models and technology over the years.

In the 20 years of rapid development of the Chinese auto market, French models have also experienced a good time of “foreign brands eat meat, Chinese brands drink soup, and lie down and count money”, but when the products are not good, they “put down the bowl and just put it down.” scolding mother”.

4

“Call on European governments to restrict Chinese brands from entering the European market”

The last thing the French want to see and admit is that the wave of electrification and intelligence is irreversible. At the Paris Auto Show, Chinese brands represented by BYD, Weipai, and Ora have entered the European new energy market. Weilai’s self-operated car rental business in Europe, BYD has won 100,000 vehicles from the largest car rental company in Europe. order business, all stimulate the nerves of the French.

If you can’t sell your own things, you must restrict the sale of other people’s things. Is this a child’s logic?

What is the plight of PSA in China?

1

Product is weak

Going back to the 2019 Shanghai Auto Show, Tang Weishi, the then CEO of PSA Group, shouted to the Chinese partners: “PSA products are first-class, and the problem lies in marketing and management.” However, people with discerning eyes know that since he took office in 2014, the plight of PSA in China is the product itself.

From the data point of view, from Fukang to Elysee, from 307 to 408, the sales of Shenlong Motors reached a peak of 710,000 in 2015; on October 17 this year, Shenlong Motors also released a good sales report. With the popularity of Versailles C5 X, Shenlong Motors has accumulated a total of 710,000 vehicles this year. The sales volume is about 100,600 units, which has exceeded the annual sales volume in 2021 and achieved positive year-on-year growth for 23 consecutive months.

And when the dividends of the 408 and Versailles C5 X vanished, so did PSA’s decline. It can be said that in recent years, except for 408 and Versailles C5 X, almost all PSA products have been unaccustomed in China. Therefore, Tang Wei’s words at the 2019 Shanghai Auto Show, to a certain extent, have reflected huge cultural differences.

Another reason for the cliff-like decline of Shenlong Motors from the annual sales of 700,000 vehicles to 50,000 vehicles is the conflict between the management concepts of the Chinese and French management. If Shenlong Motors is absolutely dominated by the Chinese side, and gives full play to its localization advantages in terms of products, operations and services, Shenlong may return to its former glory. “Management is the key to a company’s success or failure.” Zhang Zutong, member of the Standing Committee of the Party Committee and deputy general manager of Dongfeng Company, said bluntly when analyzing the reasons for Shenlong’s poor business operations.

2

“Two rooms and one living room” no text

At the beginning of this year, Stellantis Group intends to approach Dongfeng Group, hoping to create a solution of “two rooms and one hall” in China, that is, the Chinese side will lead the Citroen brand and the French side will lead the Peugeot brand, and share public resources and fields including manufacturing. However, so far, the feasibility and accuracy of this plan have not been certified. Moreover, during the waiting period of more than half a year, Dongfeng Group continued its previous plan to reduce its shares in PSA many times. The amount of the original PSA Group and Stellantis shares that Dongfeng Group has reduced has reached 1.495 billion euros. At the same time, the Opel brand also stopped its expansion plan to the Chinese market.

3

Financial war between Dongfeng Motor and PSA

In Tang Weishi’s perception, the biggest factor affecting the operation of Peugeot and Citroen brands in China is not the product, but the long-term pull between the Stellantis Group and the Chinese capital.

It is reported that Dongfeng Motor took a stake in PSA in 2014. At that time, Dongfeng Group purchased a 14.1% stake in the French PSA Group for 800 million euros, and was the largest shareholder alongside the French government and the Peugeot family, saving the PSA Group from financial crisis. In the second year, Double Convenience, which was still in the honeymoon period, achieved the above-mentioned peak annual sales of 700,000 vehicles. However, due to the chaotic management of Chinese and foreign parties and the slow introduction of product technology and other factors, Shenlong Motors has been on the verge of decline, and currently only the Versailles C5 X can barely hold on.

Global problems are also prominent

Even though the sales volume of Shenlong Motors in China this year has exceeded 100,000 units, from the perspective of shareholders, there is no new car plan and no new energy strategic layout, and the development prospects of Stellantis Group in the Chinese market are still very vague. The strategy in China is not clear, and the same problem is very prominent when looking at the world.

The brands are too scattered, there are many and outdated models, and there is no main best-selling model, etc., and the staggered alliance situation lasts for too long, and internal friction is inevitable.

In terms of new energy strategic layout, Stellantis Group is eager to find a breakthrough in the new energy vehicle market in view of the dismal performance of the fuel vehicle market. According to previous plans, PSA Group will achieve full electrification by 2025. However, there are still three years left before the goal, and with the current achievements of PSA electrification, it is still in the stage of “replacing oil to electricity”, and there is no new, independent platform for electric vehicles. In contrast, traditional auto companies such as Toyota and Volkswagen have accelerated the process of electrification in China and made great bets on the Chinese market, while GM has retreated from Europe across the board, focusing on the Chinese and American markets. It is even more difficult for the Stellantis Group to accomplish such an ambitious goal in three years.

Summary of the full text: With the advent of the electrification era, one of the Stellantis Group’s competitors, the Volkswagen Group, sells more than 3 million vehicles a year in China, making the former hard to hide. However, the rise of traditional Chinese auto companies such as BYD and Great Wall, as well as the rise of new car-making forces such as Ideal and Weilai, make it difficult for this French brand to take a step in the Chinese auto market. Compared with traditional auto companies such as Toyota, Volkswagen, and General Motors, which are highly dependent on the Chinese market, Stellantis Group’s business in the Chinese market has been sluggish, and its global sales volume is not high, and it has even lost money for many years.

As the leader of the Stellantis Group, as a “troll” in the global auto circle, Tang Weishi does not respect the times very much. He is stubborn and domineering, which is the biggest weakness of managers, and Tang Weishi has exactly that. Leaders who cannot face up to history and reality, and misjudgment about the future of the industry, may directly ruin the legal brand in the Chinese market.