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[YesAuto News] “There are no rumors in the automotive industry, only predictions.” This sentence sounds a bit absolute, but in most cases, the rumors have come true. Whether it is Suzuki's withdrawal from China or Geely's acquisition of Daimler shares, no matter how the company has refuted the rumors before, it will eventually fight its own face. Chery Automobile, which has been caught in various “scandals,” has recently been publicly listed on the Yangtze River Equity Exchange after many rumors, and through a wide range of interested investors to increase capital and shares, Chery's “mixed reform”, which once made a lot of noise, finally came into existence. Conclusive.

Read the full text in three minutes:

● Since 2016, Chery began to gradually divest assets, the reason behind this is the decline in product sales and the long-term high asset-liability ratio;
● From 2001 to 2011, Chery's most golden ten years of development, during which Chery successively launched Chery QQ, Dongfangzhi, Tiggo and other models, while gaining the market, it also acquired a series of technologies;
● “Having more children to fight” strategic mistakes and frequent personnel changes have caused Chery to fall into a crisis;
● The capital increase and share expansion are based on Chery’s “Chery 2025 Strategy” plan, etc. In the future, intelligence and new energy will be Chery’s key development directions in the future.

Serious loss Chery was forced to “sell”

For those who are familiar with the auto industry, Chery’s “selling” is no longer news. In November last year, Chery sold a 50% stake in its continued loss-making Brazilian business; in December, it transferred its 25% stake in Qoros to Baoneng Group; in January of this year, Chery sold a 51% stake in Kaiyi Motors. , Transferred to a state-owned enterprise in Yibin City, Sichuan at a price of 2.494 billion yuan.

In fact, as early as 2016, Chery had begun to divest assets. On April 25 of that year, the automobile transmission company Wanliyang issued an acquisition report. The company paid a total of 1.6 billion yuan to Wuhu Chery Transmission Co., Ltd. by issuing shares and about 1 billion yuan in cash, that is, a total of 2.6 billion yuan to acquire Chery Chery Gearbox holds 100% of the shares. Wanliyang is an affiliate of Chery Automobile, and Chery owns 12.24% of its shares.

Behind the sale of assets is the heavy pressure on Chery Automobile's sales performance. After years of sales climbing, Chery Automobile reached a sales peak in 2010, with an annual sales volume of 682,000 vehicles, and Chery Automobile sales continued to decline for the next three years. From 2013 to 2016, after adjustments, Chery Automobile once again reached the peak of its sales volume, surpassing 2010 to reach 705,000 vehicles.

At the beginning of 2017, Chery Automobile made a big effort and called out the annual sales target of “secure 900,000 vehicles and strive for 1 million vehicles”. However, reality is far more bleak than ideal. In 2017, Chery Automobile's overall sales volume was only 680,000 units, which did not increase but declined compared to 2016.

Declining sales have lowered Chery's revenue. According to Chery Automobile's 2017 annual report, Chery's operating income was 29.47 billion yuan, down 10.59% year-on-year, and its net profit was 264 million yuan, down 12.6% year-on-year. In 2015 and 2016, Chery Automobile's net profit was 182 million yuan and 302 million yuan, respectively. It is worth noting that the joint venture Chery Jaguar contributed 308 million yuan in profits in 2015, 1.396 billion yuan in profits in 2016, and 1.871 billion yuan in 2017. It can be seen that after deducting the profit of Chery Jaguar, Chery has already suffered a serious loss.

Compound annual growth rate of car companies from 2014 to 2017
Car company Sales in 2014 2017 sales Compound annual growth rate
Changan 572,400 vehicles 1.66 million vehicles 42.6%
auspicious 42.58 vehicles 1.247 million vehicles 43.07%
Great Wall 733,000 vehicles 1.061 million 13.12%
GAC Trumpchi 118,800 vehicles 508,600 vehicles 63.3%
SAIC Passenger Car 180,000 vehicles 522,000 vehicles 42.6%
Chery 441,000 vehicles 596,000 vehicles 10.56%
Watchmaking: Car Home Industry Channel

In addition, Chery's debt-to-asset ratio has also been at a high level. From 2015 to 2017, Chery Holdings’ total liabilities were 31.56 billion yuan, 32.89 billion yuan and 62.7 billion yuan, respectively, with debt ratios of 73.3%, 73.15% and 80.78%. Taking 2017 as an example, BYD’s debt ratio was 66.33%, SAIC Motor’s debt ratio was 62.39%, Geely Automobile’s debt ratio was 59.04%, FAW Car’s debt ratio was 56.88%, Great Wall Motor’s debt ratio was 55.43%, and Changan Automobile’s debt ratio was 55.43%. Is 55.2%. The comparison shows that the debt ratio of Chery Holdings and Chery shares is much higher than the above-mentioned car companies.

Judging from the sales in the first September of this year, Chery's sales seem to be picking up. As of the previous September, Chery had cumulative sales of 528,000 vehicles, a year-on-year increase of 15.4%. However, it is worth noting that at present, Chery’s sales data for individual models in September have not yet been announced. As far as the sales of individual models from January to August are concerned, neither Arrizo 5 nor Chery’s most important flagship product-Tiggo 8 this year. After the monthly sales mark of 10,000 vehicles. This means that Chery still lacks a real explosive product.

Chery has dominated the sales champion of Chinese brands for 9 consecutive years

As a Wuhu native, I knew Chery QQ early when I didn't know Tencent QQ. At that time, the streets were full of Chery QQ with “eyelashes”. From the launch of the first Chery sedan in 1999 to the one millionth car in August 2007, it took Chery 8 years to become the dominant domestic auto brand.

The predecessor of Chery, which was established in 1997, was Anhui Auto Parts Company. In order to develop and grow the enterprise, Chery's first step was to dig out people. After failing to produce cars in cooperation with FAW, with the support of the government, Chery decided to build its own car. The assistant to the mayor of Wuhu, Zhan Xia, came to look for people. He successively recruited many talents from FAW, Mitsubishi and other companies, including the time. Yin Tongyue, director of FAW-Volkswagen's assembly workshop, is now at the helm of Chery.

The second is technology accumulation. In 1996, in order to produce the first car, Chery spent nearly 30 million U.S. dollars to import an engine and a production line from Ford in the United Kingdom, and agreed that the British engineer would be responsible for the installation of the production line. But a few months later, the engineers failed to install even a piece of equipment. Yin Tongyue chose to let these British people return home in advance and decided to build it by Chery. Seven months later, Chery built its first independent engine production line.

On May 18, 1999, Chery’s first engine officially rolled off the assembly line and successfully ignited; on December 8, the same year, the first painted body was off the assembly line, and Chery’s entire vehicle was ready to go; May 9, 2000, Sichuan Jieshun Co., Ltd. became Chery's first dealer and ordered one hundred vehicles for the first time. Since then, Chery cars have officially entered the market.

Chery has also made great sacrifices and efforts in bringing its products to the market. In order to make use of the SAIC Group's car manufacturing qualifications to make the models successfully listed, Chery and SAIC signed the “State-owned Assets Transfer Agreement” and agreed to transfer 350 million yuan of assets (that is, 20% of the registered capital) to the SAIC Group's accounts for free. Chery has put forward the “Four Nos” principle to SAIC, that is, no investment, no participation in management, no risk and no dividends.

In 2001, Anhui Auto Parts Company changed its name to “SAIC Chery”. In that year, Chery sold 28,000 cars, with sales of more than 2 billion yuan. Then Chery ushered in a bumper season: in 2002, Chery’s sales exceeded 50,000, making it one of the top eight in the domestic car industry; in 2003, Chery’s classic model QQ was launched, which disturbed the original market pattern while also reducing Market model prices; in 2006, Chery became the first Chinese brand to sell 300,000 passenger cars annually, and it was also the third brand in the history of my country's automobile to reach this number after Volkswagen and General Motors. It was not until 2012 that Chery lost its top spot among Chinese brands.

It can be said that the period from 2001 to 2011 was Chery's golden ten years, during which Chery successively launched Chery QQ, Dongfangzhi, Tiggo and other models. At the same time, Chery insisted on investing in the engine field. “At that time, purchasing external engines was not only expensive, but also could not meet the demand for output” said an old Chery person. Therefore, during the period 2002-2003, Chery commissioned Austrian avl company to design 18 engines ranging from 0.8 to 4.2 liters, all meeting Euro 4 emission standards; accordingly, Chery Automobile Research Institute engine components had been established by December 2003 A technical team of up to 200 people has trained a large number of R&D talents.

Misconceptions: Chery's turning point towards weakness in 2013

2013 was a turning point for Chery. This year, Chery's sales fell to 443,900 vehicles, and its ranking dropped to the fourth Chinese brand. Since then, it has never returned to the top three. On the contrary, it is the rapid development of the Chinese automobile market. From 2014 to 2017, the sales of automobiles in the Chinese market increased from 23.49 million to 28.88 million. The top Chinese brands have come up with brilliant transcripts, while Chery Only increased from 441,000 to 596,000.

In Chery's development concept, the most criticized is “Giving birth to more children makes it easier to fight.” This initial performance was the continuous launch of new models. At the 2008 Beijing Auto Show alone, Chery released 29 new cars. These models seem to be mainly to celebrate the Olympic Games, and in the end few models are actually on the market, and sales are “dismal.”

After the “multi-model strategy” was frustrated, the “multi-brand strategy” was launched. In 2009, Chery officially expanded its single brand into four major brands: Chery, Karry, Riich, and Weilin, and later joined Qoros. Among them, the Karry brand is positioned in the field of low-end commercial vehicles to avoid affecting Chery’s brand image; the Chery brand mainly produces Volkswagen-level cars, and the goal is to become a Chinese Volkswagen or Toyota; the Riich brand aims at mid-to-high-end vehicles, and the goal is to become a Chinese Lexus or Audi; Weilin is positioned as a mid-to-high-end commercial vehicle. At first glance, there is no problem, but in actual operation, these brands have deviated from their own positioning and fell into a homogenization dilemma.

Yin Tongyue was also shaken by the multi-brand strategy. In August 2012, Chery announced that it would stop the multi-brand strategy and return to the development direction of “One Chery”. At that time, Yin Tongyue announced, “Even if sales fall out of the top ten, we must transform.” Since then, Chery has reorganized the brand into four product lines, Arrizo, Fengyun, Tiggo, and QQ, and the number of products has also been reduced from more than 20 models to less than 10. However, in the following three years, Chery did not introduce new products to the market. With the rapid development of Chinese brands, Chery was gradually surpassed.

While Chery's development is in trouble, the middle and upper-level leadership team is also unstable. According to incomplete statistics, from 2003 to 2016, there were as many as 20 senior executives in the sales and R&D departments of Chery Automobile, and five of them held positions for less than one year. Since the beginning of this year, Chery has also undergone constant personnel changes. On the last day of September, Chery also announced that Chen Anning, general manager of Chery Automobile Co., Ltd., resigned.

Seeking rebirth after capital increase and share expansion

In recent years, under multiple pressures such as declining sales, poor management, and industrial transformation, Chery has frequently issued bonds to raise funds to ease funding pressure. Chery Holdings’ proposed capital increase has a reserve price of 8.332 billion yuan, corresponding to a shareholding ratio of 31.4419%. The raised funds will be used to repay the debt to Chery’s shares and the development and daily operations of Chery’s existing and new businesses. Increased registered capital of 1.962 billion yuan. Chery Automobile’s proposed capital increase has a reserve price of 7.911 billion yuan, corresponding to 18.5185% of the shareholding ratio. The raised funds will be used for debt repayment and the development and daily operation of existing and new businesses. Among them, it plans to increase the registered capital of 1.013 billion yuan. yuan.

Yin Tongyue, Chairman of Chery Holding Group Co., Ltd. and Chairman of Chery Automobile Co., Ltd., expressed his original intention for capital increase and share expansion in “A Letter to All Chery People”, which is based on the “Chery 2025 Strategy” plan formulated by Chery on the one hand. , Has carried out a series of layouts in new products, new technologies, new energy, intelligent interconnection + unmanned driving, brand building, high-end international market, etc. The planning and implementation requires huge capital investment, the introduction of strategic capital, and on the other hand, response The central government has called for “deleveraging”, hoping to reduce the cost of enterprises through capital increase and share expansion, so that the value of state-owned assets can be maintained and increased, and enterprises will be bigger and stronger.

In April of this year, Chery announced its Lion Strategy, which includes five business platforms “Smart Driving, Smart Cloud, Smart Manufacturing, Smart Win and Smart Mobility”. Among them, Lion Smart Driving represents autonomous driving business; Lion Smart Cloud represents intelligent interconnection business; Lion Smart Manufacturing represents smart manufacturing; Lion Smart Win represents digital marketing; Lion Smart represents future shared travel. These five business platforms cover Chery's digital and intelligent layout in the entire life cycle of R&D, manufacturing, marketing and service.

It is foreseeable that intelligence and new energy will be the key development direction of Chery in the future. In the field of intelligence, Chery plans to achieve Level 3 conditional autonomous driving in 2020, Level 4 highly automated driving in 2025, and Level 5 fully automated driving after 2026.

In the field of new energy, Chery started its layout very early. As early as 1999, Chery established the “Clean Energy Vehicle Special Group”, and Chery New Energy was formally established in April 2010. On September 6 this year, Chery New Energy officially obtained the two-way certification of the Ministry of Industry and Information Technology and the National Development and Reform Commission, becoming an enterprise with the qualification for the production of pure electric passenger vehicles. In the future, it will realize the independent production and sales of new energy vehicles.

Chery's sales in the field of new energy passenger vehicles in recent years
years Sales (ten thousand)
2015 1.4
2016 2.9
2017 3.6
August 2018 3.7
Watchmaking: Car Home Industry Channel

According to Chery Group’s plan, the sales of its new energy business will reach 200,000 vehicles by 2020, and electric vehicle products will gradually cover various market segments, including compact to medium-sized sedan products and medium-sized to higher-level SUV products. New energy vehicles covering plug-in hybrid, pure electric, extended range, and electric four-wheel drive.

After a series of adjustments, does Chery really want to understand its future development direction? In addition to focusing on the field of intelligence and new energy, in January this year, Chery released a new brand Jietu, which focuses on “home + business”, which makes people confused. “In the past few years, Chery had a clear goal, shrinking the front and turning to one brand, but now everyone is starting to feel a little confused.” An industry analyst pointed out.

Previously, Chery spokesperson Jin Yibo told the media that 2018 must be a watershed for Chery. At present, Chery is indeed seeking Nirvana for brand launches, strategic launches and even capital increase and expansion, but the road is not clear enough. However, with nearly 20 years of accumulation in car manufacturing, and long-term optimism of large capital such as Baoneng and Fosun, Chery may usher in a new dawn.