Yan Yumin: High starting point for independent innovation

INTRODUCTION: BAI Yumin, chairman and president of Brilliance Automotive Inc., which was rumored to be involved in acquisitions, said that Brilliance has insisted on developing its own brand and that it has no intention to restructure. How is Brilliance's autonomy going?

“Brilliance did not make contact with any person in FAW Group.” When interviewed by our correspondent, Brilliance Automotive Chairman and President Yu Yumin made it clear that the goal of Brilliance’s insistence on developing its own brand will not be changed. The rumor of the reorganization of Huachen and Huachen was only Come from the wind. Following the Junjie Cross listing on June 18th, Brilliance launched the two new models of the Grand Benz and Junjie FSV on July 15. “These two models reflect the strategic layout of Brilliance’s occupation of the midfield and the extension of it.” Yan Yumin said that Brilliance will also spend two and a half years building a C-class luxury car positioned in the mid-to-high-end commercial vehicle market “New China.” "To the high end to profit.

After the announcement of Huachen’s reorganization, it was announced that on March 20, the “Detailed Regulations on the Adjustment and Revitalization of the Automotive Industry” announced and clearly stipulated the list of enterprises that encouraged the merger and reorganization. The object of scandal was not only the FAW Group, but also BAIC Group and GAC Group. Rumors also came from speculation about Brilliance’s "shortage of money." Since Yu Yumin, chairman of Huachen, has been advancing the "multi-flowering" strategy. Brilliance has invested 3.4 billion yuan in the construction of a new factory, the transformation of existing production lines, and the development of new models, including the A-class vehicle base, Jinbei Haishi Base, and the second-phase project under construction in Mianyang, Sichuan. Brilliance's production capacity has reached 70 10,000 cars. At the same time, the expansion project of BMW Brilliance has also been put on the agenda. According to an announcement issued by Jinbei Auto, only in the first three months of 2009, Brilliance’s investment in projects under construction increased by 122% compared with the same period in 2008. At the same time, under the influence of the global financial crisis, the three listed companies of Brilliance Auto China Brilliance China, Jinbei Auto and Shenhua Holdings have performed poorly. This all poses a challenge to Brilliance's funding chain. However, Yu Yumin said that the shortage of funds in Huachen has already been eased through government land support and listed company platforms. "Mianyang's expansion of production capacity is through government support." Yan Yumin said.

“No one car company dares to stand up and say that they don’t have enough money.” Yan Yumin said that he believes that money is not the most lacking of self-owned brands. What is lacking is the competitiveness of independent brands. “Even if Other enterprises are drawn There is also no ability to compete with them for branding.” He believes that the era of China’s auto restructuring has not yet arrived. The current issue in the Chinese auto industry is not the sales issue but the layout issue. Restructuring is one way to solve this problem, but the industry is currently Too impetuous, just look at the superposition of the number of surfaces. "I will not engage in small-scale mergers and reorganizations. It will be a big move, but not now." He added, "At present, there is no company that intends to acquire Brilliance. The starting point is to take 'China'. It is very wrong for the brand to do a good job, especially for the kind of reorganization thoughts that one wants to get from someone else, and if you want to reorganize Brilliance's business, you do not have the ability to run a good brand, why should I reorganize? Do it yourself."

The overall sales of Brilliance Automotive in the first half of the year increased by 21.5% year-on-year to reach 152,000 units. The growth trend is the same as the general trend of the auto market this year. According to statistics from the China Association of Automobile Manufacturers, China's auto sales exceeded 6 million vehicles in the first half of this year, an increase of more than 15% year-on-year, and it is already the world's largest market. This is mainly due to the popularity of the small-displacement passenger market, which has slowly spread to the mid-to-high-class passenger car market, and has slowed down from the passenger car market and light truck market to other slow-moving commercial vehicle markets. The expectation of China’s car sales this year is constantly increasing. Some experts even pointed out that according to China’s social structure, it should reach an average annual sales of 11 to 13 million vehicles.

The competition in the second half of the year will inevitably become more intense. "In the second half of the year, the joint venture will further explore intermediate cars and economical cars. The competition between self-owned brands and joint ventures will become even more intense," said Yan Yumin. Although Brilliance's Junjie FRV has benefited from the state's support for small-displacement vehicles under 1.6L, its monthly sales have risen to 6,000 units, and supply exceeds supply. However, the low profit of small-displacement passenger vehicles is an indisputable fact. Since most of Brilliance’s sales revenue was contributed by small vehicles such as Junjie FRV with weak profitability and Jinbei mini-cars, the actual profitability has not been improved. Yan Yumin does not justify, he said: "This year, the structural changes in the automotive industry are very prominent. The industry generally does not increase production and increase revenues, and Brilliance does the same." In the first half of this year, Brilliance sales revenue increased by only 9%. The price reduction caused by the aging of the models and the new cart type mainly concentrated on the low end and led to the dilution of profits. There is no doubt that the new Zunchi mid-range car and Junjie FSV sedan will help Brilliance to improve profits to a certain extent, while the C-class car market in addition to the brand owners to pull Brilliance, but also directly in the profits Promoted.

In fact, independent brands have been trying their best to perfect the product line this year, and many independent brands have advocated a gradual transition from a single model to full bloom. Chery released the Ruiqi brand to attack the high-end market, and Geely also launched a corresponding high-end model to expect to make a difference. They all want to take a seat in the high-end market and get rid of the low-end image. Brilliance’s slogan has always been “high starting point for independent innovation”. The first model launched in China was at the time of high-end cars, but as the market segment was heavily squeezed by foreign brands, Brilliance’s high-end cars had long been lost. Original status. "New China" can be seen as the beginning of regaining lost ground in Brilliance. “Automotive is an industry that talks about economies of scale. The first measure to increase profitability is to open source.” Yan Yumin said in an exclusive interview with a reporter from this magazine that Huachen’s capacity is not too big at the moment, but the model is still too small. This restriction Brilliance’s market growth.

Sanlian Life Weekly: How do you expect sales for Brilliance this year? In the case of increasing production, how to increase income?

Yan Yumin: It is expected that the annual sales will reach 330,000, an increase of about 16% over the same period last year. In terms of protecting profits, we are cutting resources and cutting costs, and stabilizing and improving the quality of our products. While increasing sales, the company plans to reduce various expenses and costs by about RMB 1 billion in the whole year and has already reduced RMB 400 million in the first half of the year. I believe this year's financial situation will be much better than last year. Our sales target for the next year will be 450,000 vehicles, including 150,000 cars and 100,000 light passengers.

Sanlian Life Weekly: You once said that Brilliance sales will reach one million units during the “Eleventh Five-Year Plan” period. Does it achieve this goal now?

Yan Yumin: It is already very close. The sale of Brilliance started from 1984 to the end of the "10th Five-Year Plan" for a total of 21 years. From 2006 to the first half of this year, Brilliance Automotive achieved a total sales volume of 946,000 vehicles, sales revenue of 138.3 billion yuan, and taxation of 10.39 billion yuan, which were 92%, 127%, and 184% of the total 21 years before the "Eleventh Five-Year Plan." During this period, we invested RMB 3.4 billion in iron pots to engage in R&D, produced many models and engines, and had 273 patents. Of the 946,000 vehicles sold, there are 430,000 cars, 250,000 light trucks, and 200,000 light passengers. The rest is the BMW brand.

Sanlian Life Weekly: Do you think that the lowest level of automobile operation is to operate products, and the highest level is to operate the brand. How does the specific Brilliance do?

Yan Yumin: When I was the chairman of Brilliance, I was the hardest hit on the brand. Brilliance Jinbei has sold 550,000 cars for more than three years. My car is cheaper than anyone else, and it costs ten thousand dollars. There is no way. It costs 5.5 billion to buy ten thousand dollars cheaper and 1.1 billion cheaper. Do not move towards the brand, always low level. Brilliance has a brand to do, and it can't be confused. The car we developed must be the only Chinese brand. In addition, the brand must be accumulated by quality. The core of the brand is quality. Recently we are using BMW's quality management process to completely transform our own management process. Third, we don't mess up the variety. There must be several shocking varieties under a brand, high-tech, high-quality, large-scale, and come out at the right time. There are basically no large-scale and high-level projects because of high levels, high investment, and high prices. We are different from Others. We insist on doing it. Internationalization is also an insistence on the route we take. What we have been following is the development mode of a high starting point for independent innovation and a combination of the capital market and the automobile market.

Sanlian Life Weekly: Why does Brilliance develop on the C-class platform to create high-end brands?

Yan Yumin: It is a necessary strategy to view high-end vehicles from a long-term perspective. In the long-term preparation, we also have a certain ability. You all see China's New Respect 137,800,000 yuan to 249,800,000 yuan, China Junjie FSV price from 69,800 to 89,800 yuan. Until now, we have played a cost-effective card and the price is lower than that of a joint venture brand. Just now, with sales of 550,000 vehicles, each vehicle will sell 10,000 yuan less, which is 5.5 billion yuan. I deeply feel the loss of the brand's low added value. Only with a branded auto company can we increase the added value. Through a joint venture with BMW, our production and management have been improved in all aspects. In addition, the reason why we are firmly marching into the German market is to prepare for the establishment of a brand. Only by actually entering overseas markets and studying in-depth international standards and regulations can our level be improved.

View related topics: China's auto industry recommence mergers and acquisitions wave

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