Brilliance has lost money again, after 2008, when it was hard to achieve profitability.
The products are unsalable and the investment is increased. Brilliance fell into the strange circle planned by one's own hand, and only watched the most contemptible Geely on weekdays to throw themselves farther and farther. At this time, an insider of Brilliance still sighed. "At present, it is lack of money. New product development and construction of new projects require funds to start."
For Brilliance, the pain may continue for some time, of course, but also to prevent others from taking advantage of this.
Relapse of the disease
According to the first quarterly report released by the company's Jinbei Auto, Jinbei Automobile's net profit for the first three months of 2009 was RMB -148 million, which ended the short-term profitability in 2008. It is understood that the assets of Huachen held by Jinbei Automobile are mainly the Jinbei brand commercial vehicles, while the Chinese assets of the Chinese family and the BMW Brilliance BMW belong to the Brilliance China system, another listed company of Brilliance. "Brilliance China is also a loss." An auto securities analyst told the "China Business" reporter, "Only BMW Brilliance's Chinese assets are profitable, but the loss of its own-brand car led to Brilliance China's negative growth in 2009, so In the first quarter of 2009, Brilliance was indeed a loss.
“We do not lack money. There are three sources of Huachen funds, firstly local government support, followed by Brilliance’s financing through listed companies, and finally the profit rate contributed by joint venture BMW Brilliance is also substantial.†An insider of Brilliance still holds Do not want to acknowledge the fact that the total loss.
However, the fact that listed company reports and models are unsalable is already the best proof.
According to the latest statistics from the China Passenger Cars Association (hereinafter referred to as the CCC), during the period from January to May 2009, sales of the Brilliance sedan Junjie (sedanbox) were only 11,047, compared with 22,877 units in the same period of 2008, up from the same period of the previous year. It has reduced by nearly 52%; the Zunchi sedan has sold only 2,902 vehicles, a decrease of nearly 60% year-on-year; although the Junjie FRV (Hatchback) models that were just launched in 2009 sold more than 20,000 vehicles from January to May, the profits of the small cars were diluted. , can not change the loss of Brilliance. In the first quarter of 2009, Brilliance turned from a profit in 2008 to a loss.
The slow pace of product upgrades and severe pressure from foreign brands have led to slow sales of Brilliance models, but this is only one of the reasons for the loss of Brilliance.
According to an insider of Huachen told the “China Business†reporter, Chairman Yu Yumin has been advancing the “multiple blossoming†strategic layout since he took office three years ago. Including the A-class car base, Jinbei Haishi Base, and the second phase of construction in Mianyang, Sichuan, Brilliance’s production capacity has reached 800,000. 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.
“It is a normal logic for companies to have difficulties, and then increase investment to get out of trouble. However, for Brilliance, it is still more dangerous to lose money just one year after losing one,†said an automobile analyst at CITIC Securities.
Stealth risk
Brilliance's funding chain seems to be in a precarious situation. According to statistics, in 2005, Brilliance suffered a loss of 1.2 billion yuan. In 2006, the amount of losses reached nearly 700 million yuan. In 2007, driven by the significant increase in sales of the Chinese auto market blowout and sales of BMW Brilliance BMW, Brilliance has stated that it is “input and productionâ€. It is basically the same, but the "ST Gold Cup" of the year has always reminded people that Brilliance's so-called "flat" may be just a wish.
The strong momentum of 2007 brought us into 2008. With the introduction of new models, Brilliance finally achieved profitability. But it didn't last long. Brilliance seemed to have returned to the "old society" in a blink of an eye. Perhaps it will not be long before Jinbei Automobile will once again wear the "ST" (loss) hat. At the same time, Brilliance also planned a series of new projects for itself, including the A-class vehicle project, the BMW Brilliance expansion project, the Mianyang base construction, and the Jinbei Sea Lion new product R&D, etc. These will all pose challenges to Brilliance’s next capital chain.
For Brilliance, continued losses may also provide opportunities for other companies to take advantage of the losses.
The latest news shows that FAW Group is in the process of reorganization negotiations with Brilliance. The reorganization model under consideration is that FAW contributed to the purchase of shares in the Brilliance Group and did not rule out the use of state-owned assets. It eventually entered Brilliance and achieved control.
Of course, this information, a Brilliance management personnel who did not want to be identified gave "positive" denial, "We are now developing a platform for vehicle development, the latter three new cars are A-class platform products. We have a complete development plan, and there are no indications of restructuring yet.†But another person inside Brilliance said: “Brilliance does not exclude restructuring.†According to him, Brilliance Chairman Yu Yumin’s previous internal management meeting The three principles of reorganization are proposed. "It must be based on the principle that it is conducive to independent innovation, is conducive to the accumulation of its own technology, and is conducive to the development of independent brands."
One thing is certain is that the Liaoning Provincial Government is very reluctant to give up controlling stake in Brilliance, but the premise is that Brilliance can successfully finance in the capital market in the future, otherwise, the risk of Brilliance being reorganized has not been lifted yet.
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