Dongfeng Automobile "Defending War"

The new coronavirus pneumonia epidemic situation, let Wuhan press the pause button. Also let the city known as "China's capital of cars" temporarily bid farewell to the noise of the past.

In February 10th, according to the requirements, besides the Hubei Province, the provinces and cities in the whole country had started work on schedule, and Tesla, Xiaopeng and other car enterprises also welcomed the first working day after the Spring Festival holiday.

Before that, a number of non factory manufacturing jobs have begun to work at home, and efforts are being made to prevent and control the epidemic.

But the headquarters of Dongfeng Motor Group Co., Ltd. (hereinafter referred to as "Dongfeng Motor") in Hubei is still unable to confirm the resumption time, which made Dongfeng's brands in a passive situation at the beginning of 2020.

In February 7th, the Dongfeng Road and Shenlong Avenue on both sides of the Wuhan economic development zone had no cars and spare parts factories in the past. There were few pedestrians in the empty streets.

Along Dongfeng Road, we enter the Longyang Avenue in the city. There are different brands of 4S shops on both sides of the road. In Wuhan, except for supermarkets, drugstores, and 00 small restaurants and small shops that are scattered over their livelihood, the rest of the shops are temporarily closed under the requirements of relevant policies. This includes, of course, Wuhan's auto dealers.

The automobile industry is a pillar industry in Wuhan. The Wuhan economic and Technological Development Zone, with the core of Wuhan Zhuankou and the core of both sides of the chaotic Yang Avenue, is one of the most intensive areas in the global automobile factory.

With the Wuhan economic and Technological Development Zone as the core, the "China car capital" is one of the most concentrated areas in China's automobile and spare parts industry. Here, Dongfeng Motor and its affiliated Dongfeng passenger cars, Dongfeng new energy, Dongfeng Honda, Dongfeng Renault, Dongfeng Fengshen, and Shen long are all vehicle enterprises. The vehicle production and sales volume reaches 2 million vehicles, with an average of more than 5000 vehicles coming off the line in Wuhan every day. In 2018, Wuhan accumulatively produced 1 million 700 thousand vehicles, and the total output value of the automobile industry amounted to 320 billion yuan.

According to the statistics in 2018, the Wuhan economic and Technological Development Zone with Zhuankou as its core contributes 1/4 of Wuhan's GDP, while the automobile industry contributes 80% of GDP in Wuhan's economic and Technological Development Zone, that is to say, the automobile industry contributes more than 20% of Wuhan's GDP, becoming the largest single industry in Wuhan's GDP share.

At the same time, more than half of Dongfeng's 160 thousand employees work in Wuhan, accounting for more than 1000 related parts enterprises, behind which are hundreds of thousands of jobs and huge fiscal revenue.

And the outbreak is bound to have a huge impact on the operation of these companies and the lives of their employees. 2019 was the 50th anniversary of Dongfeng company. In 2020, Dongfeng was regarded as the key opening year for the next stage of development. In the face of unexpected uncertainties, Dongfeng Motor is facing great challenges.

The difficulties faced by Dongfeng Automobile are also common difficulties faced by Hubei province and even China's automobile industry. - Song Wenhui diagram

Dongfeng Motor in the storm center

As one of the most important automobile manufacturers in China, Dongfeng Group has been occupying a decisive share in the automobile industry of Wuhan and even Hubei province.

In 2003, the headquarters of Dongfeng company moved to Wuhan, making Wuhan the headquarters of Dongfeng Automobile Enterprises and driving into the fast lane of the auto industry.

The automobile plant has been built and put into operation, and the capacity of Wuhan's automobile has doubled. Before 2012, the annual capacity of Wuhan's motor vehicles was 800 thousand. In the first half of 2019, Wuhan's 5 Mahayana vehicle enterprises totaled 762 thousand and 300 vehicles, and the total industrial output value was 94 billion 65 million yuan.

In January 7th, Dongfeng Motor Company held its work conference in 2020 in Xiangyang. At the meeting, Dongfeng high level emphasized that 2020 is a crucial year for Dongfeng Motor: 2020 is the year when Dongfeng Motor Limited by Share Ltd brand started its new business. It is the decisive year for Dongfeng Motor Service leading, and also the key year for the implementation of the "163 doubling plan".

Among them, "1" represents Dongfeng Automobile Shares, which will achieve the first quality of light commercial vehicle industry; the "6" representatives will make breakthrough development in the 6 directions around the market strategy; the "3" representative will reach the challenge target of 300 thousand adult sales by 2023.

In addition, Dongfeng Motor announced its 2020 business and sales target - "ensuring two 40 billion", that is, to ensure that the total profit of the company is above 40 billion yuan, and the operating cash flow is not less than 40 billion yuan, and 3 million 750 thousand vehicles are sold.

However, with the Dongfeng Automobile as the core, the supply chain system of Wuhan automotive industry has faced the most severe challenges at the beginning of spring.

Since the closure of the city in Wuhan in January 23rd, Hubei has taken many measures to prevent the spread of the epidemic, such as closed traffic and reducing the flow of personnel, which has undoubtedly had a great impact on the labor-intensive automobile manufacturing industry.

In addition, postponed reemployment is another difficulty facing Dongfeng system. According to official statements, Hubei has announced that all kinds of enterprises return to work not earlier than 24 hours in February 13th.

At present, many brands of Dongfeng Motor have not yet reconfirmed their brands. Only a few brands with production bases outside Hubei are planning to return to work in February 10th, such as Dongfeng Xiaokang, Dongfeng Infiniti, Dongfeng Yueda KIA and so on.

The first thing to bear is the Dongfeng Honda, which has 3 factories in Wuhan and 1 million 250 thousand in total capacity. In February 7th, Honda motor had said that the Wuhan plant would be suspended from operation until February 13th, but with the increase of confirmed cases of the new coronavirus, Honda announced the delay again, and is expected to return to work in the late February.

The Xiangyang base of Dongfeng Nissan's capacity of 250 thousand vehicles was postponed until February 14th, and the rhythm of resuming work is facing the same problem as Dongfeng Honda. In addition, the deferred renewal of Shenlong and Dongfeng Renault will undoubtedly make the originally waving legal car face greater challenges.

Of course, Dongfeng independent brand Fengshen is also not optimistic. The impact of Dongfeng Fengshen is still very large. First of all, the macro-economy has an impact on the automobile market. Second, 2 and March work has been deployed, and now it needs to be disrupted. The factory resumption is planned according to plan No. 14, but there is still a risk of completion. The staff return to Han involves many provinces and municipalities' management policies, and the production involves a large number of suppliers and two level suppliers, which is not very controllable. Third, Hubei is our base camp, the biggest source of sales, and there must be losses. " Dongfeng Fengshen people in an interview with the economic news reporters in twenty-first Century said.

However, more challenges than delayed reemployment come from the competition of the sales side. In February 9th, a number of automobile manufacturers in Northeast, North China and other places were actively planning to seize the Dongfeng light vehicle customers and market share as an increase in sales volume in 2020.

In the view of many auto industry, business competition is understandable. However, when the whole country is working together to fight the epidemic, the practice of individual enterprises is against business ethics. For China's auto industry, there is no winner after the shooting.

"The Spring Festival of 2020 is destined to impress us. The sudden outbreak of the new crown pneumonia not only threatens our health and life, but also delays the construction of the national automobile industry. Especially for the Dongfeng Limited by Share Ltd, which is located in Hubei, Wuhan, Xiangyang and Shiyan, facing the core of the epidemic storm, it is facing the worst pressure and the most serious problem. In February 10th, Dongfeng Automobile Limited by Share Ltd said in an open letter.

Start "defending war"

The difficulties faced by Dongfeng Automobile are also common difficulties faced by the whole province of Hubei and even China's automobile industry.

"Although most parts of the region are beginning to resume work today, there is still a problem for the whole vehicle factory to return to work." In February 10th, an auto industry insider said that the factory resumed work was still faced with the traffic disruption, the field workers could not return to the post, the transportation of goods and materials was blocked, the protection materials were insufficient, and the risk of epidemic spread could not be controlled. Therefore, the comprehensive resumption of work needs to wait for the epidemic to be fully controlled.

A comprehensive fight against the epidemic is related to all walks of life. Faced with the blocking action of this epidemic, all walks of life have rushed to Wuhan. For Dongfeng Motor in the center of the storm, epidemic prevention is a key link in the future development, and even a top priority. To this end, a series of measures have been taken to support the fight against the epidemic, to help the affected employees, and to continue to advance together with the distributors' partners through support measures and start the war of homeland security.

According to incomplete statistics, since January 23rd, Dongfeng Motor Company and its many companies have donated a total of 61 million 180 thousand yuan to Hubei. In addition, Dongfeng travel has set up a community fleet consisting of 1000 cars, including 700 Internet buses and 300 taxi units. According to the requirements of the headquarters, it provides free services for targeted communities.

The spread of the epidemic has also brought some operational pressure to many outlets. In February 7th, the research results released by the China Automobile Circulation Association showed that dealers generally believed that sales in February dropped by more than 50%, and the decline in the ring ratio was more.

In the face of the impact of the epidemic on the consumer side, many brands of Dongfeng have launched the corresponding dealer care policy, while improving the online car buying service policy to attract consumers.

Among them, Dongfeng Peugeot and Dongfeng Citroen, headquartered in Wuhan, adjust their target policies in a timely manner and take the initiative to reduce sales targets, so as to help dealers tide over difficulties.

Dongfeng Infiniti adjusted its sales targets and policies, provided inventory discount support for dealers, and launched measures to reduce and exemption dealers from selling financial interest and delaying payment period according to the extent of the epidemic impact, so as to assist dealers in giving first line sales consultant subsidies.

Dongfeng Nissan, with its focus on Huadu and Shiyan, is one of the relatively few affected by the epidemic in Dongfeng. In January this year, under the dual influence of the Spring Festival holidays and the epidemic situation, the monthly sales volume was 92158, of which seventh generation of Teana sold 8821 vehicles, up 44% over the same period last year, and 39926 sales of Sylvia series, and the sales volume of nearly 40 thousand vehicles had surpassed the average monthly sales level of last year. The products of Bluebird and strong passenger were also increased year-on-year in January.

In order to further ensure the healthy operation of dealers during the epidemic, Dongfeng Nissan has issued the sixteen word policy of "lightening the burden and releasing pressure", "policy loosening", "supply guarantee" and "platform empowerment", which fully supports distributors' work.

Dongfeng Fengshen has relaxed the business policy of February to the maximum extent, reducing the pressure of distributors by reducing the requirements of reward and increasing the support of the two network rent.

"Dongfeng Fengshen dealer inventory is good at present, stock coefficient is not more than 1.3." The Dongfeng Fengshen official said that the sales volume in the future still depends on the return time.

"For car companies, inventory is not important, the key is how to quickly adjust production capacity, this is the hard power of enterprises, this time test is the ability of enterprises to ensure supply chain and logistics flow."

Dongfeng Nissan told reporters on twenty-first Century economic report that Wuhan, as an important transportation hub in China, has a huge impact on logistics, and the supply of parts is broken. The entire automobile industry will be greatly affected.

"After the resumption of No. 10, this problem may be more obvious." The above pointed out that in the current trend of industrial globalization, how to better optimize and avoid risks may be more worthy of consideration for future car companies in designing supply chains.

So, how should Dongfeng Automobile and China's auto industry face self-help when facing the risk of supply chain disruption?

"After the order is restored, the vehicle and parts enterprises can make up for the lost output by overtime and adjusting the production rhythm. The recovery of vehicle enterprises is the fastest, and the pace of supplier recovery is slower. Because the industry chain is too long, every link has short boards which can not be controlled, which affects the efficiency of the whole line.

Automobile analyst Zhong Shi said that both car dealers and dealers should be prepared for a protracted war. On the other hand, they must have the confidence to win. Although the Chinese automobile market will suffer some negative effects, the market scale is still large, and there is still much room for development.

"For the east wind, in the short term, it is still a top priority to overcome the epidemic as soon as possible and ensure the health and safety of employees in Hubei."

In February 10th, an automobile industry expert told reporters that "for long-term development, Dongfeng sales goals and plans need to be reformulated, and strategic planning under the new situation should be done, including long period and short cycle planning, and strategic adjustment should be made through planning adjustment, so as to compensate for the losses caused by the epidemic."