In the case of delay in improving sales, the CEO of Shenlong Automobile adjusted again.

    On the evening of September 17, Shenlong Automobile announced that Chen Bin will succeed the French executive MASSIMO ROSERBA as the general manager of Shenlong Automobile Co., Ltd.

    Although the replacement of the top leader of Shenlong Automobile is related to the agreement between Dongfeng Company and PSA Group on the joint venture company's senior management (the general manager and the executive deputy general manager are selected in turn), the market performance is always a KPI that cannot be bypassed.

    Zhang Xiang, an automotive industry analyst, believes that if Shenlong's sales continue to not improve, the operating difficulties faced by the joint venture company may further deteriorate.

    High-level personnel changes frequently

    Caijing.com Automobile found that this is the second personnel adjustment of Shenlong Automobile in September. Earlier on September 2, Chen Bin, the former general manager of Dongfeng Motor Co., Ltd., had replaced Li Jun as executive deputy general manager of Shenlong Automobile.

    It is worth noting that the adjustment on September 2 enabled Chen Bin to serve as an assistant to the president of Dongfeng Motor Group Co., Ltd. in Dongfeng Group while serving at Shenlong Motor. According to "China Business News" quoted information from Dongfeng insiders, this arrangement is to facilitate Chen Bin to mobilize resources from within the group and help Shenlong Motors to overcome its difficulties and develop.

    According to public information, Chen Bin was born in 1976 with a master's degree in engineering. After graduating in 1998, he entered the Shiyan factory of Dongfeng Dana Axle Co., Ltd. as an assistant to the plant manager. Before two personnel adjustments in September, he served as Dana Axle Co., Ltd. Director of the company’s purchasing department, deputy secretary and secretary of the Youth League Committee of Dongfeng Motor Corporation, secretary of the Party Committee of Dongfeng Motor Co., Ltd., and general manager of Dongfeng Motor Co., Ltd.

    In 2018, Shenlong also carried out a large-scale manpower adjustment, announcing that the total number of employees has been reduced from 8,000 to 5,000, and will be further reduced to 4,000 in the next three years. In the first half of this year, Shenlong reported that all employees were competing for employment.

    Simultaneously with the adjustment of the number of employees, Shenlong's turbulent organizational structure and management changes. According to statistics, Shenlong Automobile has implemented 6 institutional reforms and more than 10 personnel appointments and removals within 22 months.

    Dismal sales are the main cause of turbulence

    Ren Wanfu, an automotive analyst, believes that the poor sales of Shenlong Motors are the direct cause of frequent personnel adjustments. The "Meta Plan" has been implemented for a year, but it cannot help Shenlong Motors to get rid of the poor sales situation. With the change of senior management, the "Meta Plan" is likely to fall into an unfavorable situation.

    The birth of Shenlong Automobile can be traced back to the 1990s. In 1991, the "Guangzhou Peugeot" joint venture between PSA and Guangzhou Automobile entered its heyday, with a market share of 16% in the domestic automobile market that was still in its infancy. In 1992, PSA and Dongfeng Group, a joint venture of PSA and Dongfeng Group, came into being.

    In the more than two decades since its establishment, the annual sales volume of Shenlong Automobile has increased steadily from 52,000 units in the millennium to 704,000 units in 2014. At the beginning of 2015, Qiu Xiandong, then general manager of Shenlong Company, said in an interview with the media that Shenlong Company will launch a new mid-term business plan to strive for sales to exceed 1 million vehicles in 2017 and challenge 1.5 million vehicles in 2020.

    However, in 2016, when the situation was very good, Shenlong did not advance and retreated, falling to 601,000 vehicles by 14.77%, falling out of the top ten domestic car companies. In 2017, the sales volume of Shenlong Automobile not only failed to break through the million-level forecast two years ago, but nearly cut in half, dropping to 378,000 units. In the same year, Shenlong even planned to sell the second plant in Wuhan to Dongfeng Honda, but due to the inability to connect the craftsmanship, the plant eventually ceased production in 2018.

    In 2018, the domestic auto market experienced a decline for the first time in 20 years. Under the "winter of the auto market", the total annual sales of Shenlong were 253,400 vehicles, a year-on-year decline of 31.88%. At the end of the year, the marketing department of Shenlong launched a new round of competition. The third plant in Wuhan was closed and the Chengdu plant was "leased out" to Dongfeng Nissan.

    It is difficult to stop the decline for Shenlong by removing redundant production capacity. In September 2019, Shenlong announced a revival plan under the name "Yuan". The plan is divided into three phases. In 2019, the break-even point will be adjusted to 180,000 vehicles, and sales will be increased to 250,000 by 2021, and by 2025 Sales returned to 400,000 vehicles.

    However, in 2019, as part of the "Peiyuan" stage of the "Meta Plan", the annual sales volume was only 113,600 vehicles, which did not reach the break-even point goal, with a decrease of 55%. According to data, from January to July 2020, the sales volume of Shenlong Automobile was only 26,342 units, down 65% year-on-year. In the first half of this year, Shenlong Automobile lost 1.3 billion yuan.

    A comeback may be difficult to achieve

    Zhang Xiang believes that the sharp decline in sales of Shenlong this year is related to the decline in product strength. In recent years, competition in the domestic automobile market has intensified and the strength of its own brands has increased day by day. PSA has not seized the opportunity to introduce new models of comparable strength, resulting in a decline in sales and "continuous decline in sales and profits."

    Insiders believe that French cars are currently in an awkward position in the Chinese market, PSA sales in China have fallen, and Renault has lost the Chinese market. The reason is that, on the one hand, compared with German, Japanese, and American cars, the characteristics of French cars are not clear enough; on the other hand, French car products neither meet the needs of Chinese consumers, but also suffer from the slow introduction of new cars. Criticized.

    In addition, Caijing.com has compiled public information and found that in recent years, Shenlong Automobile has been recalled frequently, dealers have continued to withdraw from the Internet, and sales channels have shrunk. At the same time, it has added uncertainty to the after-sales system, and consumers will inevitably hesitate.

    Ren Wanfu believes that it will be difficult for Shenlong Motors to quickly get out of trouble due to its many years of accumulated disadvantages. In addition, it is now in a period of industrial transformation. It will take longer for Shenlong Motors to rise again.

    Zhang Xiang believes that if Shenlong is unable to get out of the sales difficulties, the prospects of the joint venture will also become uncertain.