When it comes to the Chinese car brand with the deepest history, it is none other than Changan Automobile. With a long history of more than 160 years, Changan can be called the earliest big brother of Chinese automobiles. Under the adversity that the joint venture brand is unreliable, the independent brand has carried the banner and helped Changan Automobile to make a fortune. What the hell is going on?
In 1862, Li Hongzhang, an important minister of the Qing Dynasty, founded the Shanghai Ocean Artillery Bureau in a temple outside Songjiang City. It is not only the earliest arsenal in China, but also the first industrial enterprise in China's modern history, creating a precedent for China's modern industry. The Shanghai Ocean Artillery Bureau is the predecessor of Changan Automobile. With the drastic changes of the times, it was successively moved to Suzhou and Nanjing, and was once renamed Jinling Arsenal. After the outbreak of the Anti-Japanese War, it moved to Chongqing, the rear of the country, and has taken root here ever since. After the reform and opening up, Changan entered the field of civil automobiles and entered a new era.
In the early 80s of the last century, Changan began to develop miniature cars. In 1984, Changan and Suzuki joined hands to introduce technology from Japan and use parts imported from Suzuki to assemble minivans, and since then it has entered the track of rapid development. In the early 90s of last century, Changan has occupied a large market share in the field of domestic mini vehicles. Later, Changan introduced from Suzuki the best-selling mini car in Japan at that time, Alto, and became a leader in the Chinese sedan market. As a result, Changan has established its status as the big brother of China's automobiles.
In the 21st century, the era of joint ventures has set off a boom. Changan joined hands with Ford, Mazda, Peugeot Citroen, etc., and took a ride in the booming era of joint venture cars. These joint venture brands have become Chang'an's sales pillars and profit cows. In 2016, Changan's annual net profit was 10.3 billion yuan, of which about 9 billion yuan came from Changan Ford. Since 2017, Chang'an's joint venture sector has continued to suffer heavy losses, with sales collapsing and profits plummeting. As a result, Changan's annual sales fell from 2.87 million to 1.76 million units from 2017 to 2019. From 2018 to 2019, Chang'an's non-net profit was negative for three consecutive years, with a total loss of 1117.7 billion yuan.
The collapse of the joint venture brand made Chang'an fall to the bottom. Chang'an, which was stung by the sting, embarked on the road of self-reliance and began to fully develop its own brand. Gradually, Chang'an's own brand took up the banner and pulled Chang'an out of the quagmire of losses. In 2022, Changan's total sales volume will be 2.35 million units, of which 360,000 units will be sold by joint ventures, accounting for about 1532%, the lowest among the six major state-owned car companies. In other words, Chang'an's own brand has become the sales leader. This is a world away from the other five state-owned automakers that still rely heavily on joint venture brands.
Entering 2023, Chang'an will take the development of its own brand as the top priority. Thanks to measures such as divesting negative assets, focusing on independent brands, and improving sales structure, Changan has achieved beautiful results. Data show that in the first three quarters of this year, Changan Automobile's net profit attributable to the parent company was 988.2 billion yuan, a year-on-year increase of 4322%。In terms of earning power, among the 19 listed vehicles in the A-share market, Changan ranks third, second only to BYD and SAIC, and is nearly twice as large as Great Wall Motor, the fourth place, and the Guangzhou Automobile Group, the fifth. Among the six major state-owned car companies, Changan's earning power is second only to SAIC.
In fact, if you look at it from the perspective of net profit margin, Changan can rank first in China. In the first three quarters of this year, Chang'an's revenue was 10820.6 billion yuan, net profit of 988.2 billion yuan, with a net profit of 913%, nearly twice that of BYD and nearly 10 times that of SAIC. In other words, BYD used four times Chang'an's revenue to only reap twice Chang'an's net profit. From the point of view of money-making efficiency, Changan Automobile is obviously higher. It is no wonder that the market value of Changan Automobile has increased from about 120 billion at the beginning of the year to 170 billion today, while BYD's market value has dropped from 750 billion to 550 billion today.
Of course, Changan Automobile is not without hidden concerns, and the electrification transformation is the biggest challenge. At present, the main sales volume of Changan New Energy is still low-end entry-level mini cars such as lumin, which obviously cannot really enter the era of new energy vehicles. The high-end brand AVATR has an average monthly sales volume of only about 2,000 vehicles, and it still needs to work hardThe mid-range brand Navy sold well, but it didn't make it into the first camp;The cost-effective brand Qiyuan has just started, and it has yet to be verified by the market. Fortunately, Chang'an is not short of money now, and can invest heavily to accelerate the pace of electrification transformation and fight for its own future.