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Brilliance Automotive Group officially went bankrupt and reorganized
The automotive market accelerates the reorganization of independent brands to high-end ones.
Reporter intern Yang Tianyue
Yesterday, the Shenyang Intermediate People’s Court decided to accept the creditors’ request for the reorganization of Brilliance Automobile Group Holdings Co., Ltd., marking that this automobile company has officially entered the bankruptcy reorganization process.
From the “highlight moment” when the Jinbei model was launched and won the highest domestic car sales for six years in a row, to the “foundry” after the BMW joint venture, Brilliance Auto’s farewell to the stage is actually continuous change. high growth in China’s auto market. A new era of stocks. With the improvement of consumption and the improvement of the level of technological manufacturing, it is difficult for independent brands to impress consumers just by “profitability”. While traditional car companies are exiting the market due to mismanagement, a large number of high-end brands from powerful independent car companies are accelerating their entry. With the elimination of the last ones in the market, independent car companies are accelerating a comprehensive upward path.
Brilliance Auto Faces Bankruptcy and Reorganization
According to information from the National Company Bankruptcy Reorganization Case Information Network, Gezhi Automotive Technology applied to the Liaoning Province Shenyang Intermediate People’s Court for the reorganization of Brilliance Automotive Group Holdings Co., Ltd. The court’s ruling established that Brilliance Group’s assets were insufficient to pay all debts, and had bankruptcy reasons stipulated in the Corporate Bankruptcy Act. But at the same time, the group has the value and possibility of salvation, and the need and feasibility of reorganization.
As a state-owned company in Liaoning Province, Brilliance Group directly or indirectly controls and participates in four listed companies, and through its listed company Brilliance China and BMW jointly established BMW Brilliance, which has three independent brands from China. , Jinbei and Huasong, and BMW Brilliance. Two Brilliance Renault joint venture brands. According to relevant Brilliance Automobile Group sources, this reorganization only involves the private label segment of the Brilliance Group headquarters, and does not involve listed companies or joint ventures with BMW and Renault.
However, there are voices in the industry that some Brilliance Auto experts said they have yet to receive a court ruling on bankruptcy and reorganization, and that the company is more likely to implement a judicial reorganization.
Regardless of whether bankruptcy and reorganization are determined or not, it’s hard to deny that the once glorious Brilliance Auto has gradually waned in recent years. According to Tianyan Check’s judicial risk information, Brilliance Auto currently associates 16 pieces of information about the person subject to execution, and the total amount of execution target is about 389 million yuan.
After the BMW Gold Cup difficult to sprout
One year after its inception in 2002, Brilliance Automobile became popular thanks to the Jinbei van, and Jinbei also won the national car sales championship for six consecutive years. But after eating the first crab from the BMW joint venture, Brilliance Auto gradually dwindled because it could not maintain its autonomous stake and relied on BMW Brilliance for “feedback.”
In 2018, after China relaxed the restrictions on the share of auto joint venture and joint venture participation no more than two restrictions, BMW Brilliance took the lead by opening the first opportunity. After BMW increases its stake in BMW Brilliance to 75% and formally owns the shares, BMW Brilliance will no longer be included in the scope of the Brilliance Auto merger. Without the “protective umbrella” of the BMW Group, Brilliance Auto has gradually fallen into crisis. The impact of the epidemic in the first half of this year has further increased Brilliance’s operational burden.
In August of this year, several remaining Brilliance Auto bonds began to collapse. In October this year, Brilliance Auto was again caught in a whirlwind of public opinion because it failed to redeem the private placement bonds with a scale of one billion yuan on time. On November 4, Brilliance Auto Group stated that despite fundraising efforts, due to funding difficulties, it could only redeem. Interest portion of bonds.
Debt defaults have become the wick of Brilliance Auto’s bankruptcy reorganization, but since Brilliance Auto’s balance sheet, its own brands have been in a state of loss and the company’s assets are in fact insufficient to pay. all debts. Since the beginning of this year, Brilliance Auto has sold its shares several times to ease financial pressure; According to the semi-annual report of Brilliance Group, the total liabilities at the group level are 52.376 billion yuan, the debt-to-assets ratio exceeds 110%, and it has lost financing capacity.
Although Brilliance Auto already has the bankruptcy reasons specified in the Corporate Bankruptcy Law, in the eyes of industry insiders, as a key company in Liaoning Province, Brilliance Auto is not going to go bankrupt or liquidate, and it is likely that undergo a reorganization in the next step.
The autonomous market accelerates the “renewal”
Brilliance is not the only veteran auto company in decline. In the past two years, the overall car market said goodbye to the rapid growth of the stock era, and electrification and intelligence continue to rise. As new car manufacturing forces began on the Internet and parts and components companies accelerate their cross-border entry, and the high-end brands of powerful traditional auto companies continue to incubate, the living space of traditional auto companies of Fuel has been continually compressed and the survival of the fittest in the traditional auto industry is also accelerating.
On April 14 this year, Dongfeng Motor Group announced that the shareholders intend to reorganize Dongfeng Renault. The “youngest” joint venture brand established in 2013 has experienced a “high light moment” with a rapid growth rate of more than 140%. The product line is too unique and other problems have come to an embarrassing end. On July 9 this year, former “national motorcycle king” Lifan issued an announcement claiming that the production and operation of its 10 wholly-owned subsidiaries are abnormal at this stage. Unable to pay their debts, the creditors applied to the court for bankruptcy relief. everything.
According to industry experts, the automobile is a large-scale industry, and China’s automobile market has always had the disadvantages of low concentration and weak brand power. With the improvement of consumption and the improvement of the level of technological manufacturing, it is difficult for independent brands to impress consumers just by “profitability”. While traditional car companies are pulling out of the market due to mismanagement, a large number of high-end brands from powerful independent car companies are accelerating their entry.
In less than five years, China’s auto market has successively launched new high-end brands from independent auto companies such as Great Wall WEY, Geely Lynk & Co, Chery Xingtu, BAIC ARCFOX, Dongfeng Lantu, etc., and achieved production in dough; Not long ago, SAIC Group announced that it will start a new smart electric car branding project codenamed “L”. Dongfeng Group also announced in a high profile that it will join with ICT giant Huawei and power battery giant Ningde Times to jointly build a high-end brand.
With the continued efforts of independent brands to attack the high-end market, consumer impressions of independent brands have also started to shift from the low-price, low-price feeling in the past to high-end, fashionable and smart. With the latest knockout on the market continuing to escalate, independent auto companies are speeding their way out of a comprehensive upward path.
