It is widely said that the era of intelligent electric vehicles presents a significant challenge for traditional automakers and joint ventures, but it is no less daunting for newcomers in the industry.
After all, the number of domestic new car manufacturers has dwindled from over 300 during its peak to around 40 today. In fact, driven by numerous new players focusing on traffic and chip specifications, an increasing number of multinational car companies are bidding farewell to the era of easy wins and are actively exploring new models of joint cooperation.
Nezha Auto Salary Cuts
Event Overview: Recently, media reports revealed that Nezha Auto has begun implementing a salary reduction plan for all its R&D personnel, with notifications of salary cuts being sent out to employees across departments.
According to the reports, the salary cuts take effect from September 1, with the specifics as follows: employees earning over 1 million RMB annually will see a 30% reduction; those earning between 500,000 and 1 million RMB will face a 20% cut; employees making between 300,000 and 500,000 RMB will experience a 10% decrease; and those earning below 300,000 RMB will see a 5% reduction.
Furthermore, under this salary reduction scheme, if an employee’s salary still exceeds their “position salary,” an additional 10% reduction will apply. This salary cut affects more than 1,000 staff members.
Nezha Auto's booth at the Shenyang International Auto Show on October 3, 2024.
Commentary: Whether it be salary cuts or layoffs, these are normal operational adjustments for a company. However, the scale and extent of the adjustments exposed for Nezha have exceeded what can be considered "normal," a phenomenon not typically seen in a rapidly ascending company.
As one of the new players, Nezha Auto had a moment of glory in 2022, achieving annual sales of 152,100 vehicles, making it the top-selling new force in the domestic market. However, as leading companies like NIO and Li Auto recovered from the supply chain nightmare of 2022, Nezha, which lacks competitive advantages in technology and branding, started to lose market favor. By 2023, its total deliveries fell to 127,500 vehicles, a 16% year-on-year decline.
Entering 2024, as the price war intensifies and more traffic players like Huawei's Harmony OS and Xiaomi enter the fray, consumer attention towards Nezha Auto has further waned. Although it has mostly managed monthly sales above 10,000 units, compared to mainstream players selling 20,000 units monthly, leading companies surpassing 30,000 units, and top enterprises exceeding 50,000 units, Nezha is clearly falling behind. In the first three quarters of 2024, Nezha Auto's cumulative deliveries totaled 85,900 vehicles, a year-on-year decline of 12.13%. Moreover, Nezha has not yet disclosed the sales figures for October, which were supposed to be released on November 1.
In recent years, the number of new car manufacturers has dwindled from over 300 to around 40, with many powerful or once-promising brands fading from view amidst the shakeout, such as HiPhi, Weltmeister, Aiways, and Hozon.
In the business world, relentless competition is the norm; the only constant is change. The speed at which technology translates into innovative applications and configurations is only accelerating. The uncertainties currently facing Nezha are merely a minor fluctuation in the long timeline of the automotive industry.
However, for the average consumer, such changes can create a sense of insecurity. New vehicles can quickly become outdated, brands may vanish without warning, and cars could become obsolete, turning into scrap metal.
SAIC and Audi Collaborate on Electric Vehicles without the “Four Rings” Logo
Event Overview: On November 7, Audi launched a new luxury electric brand, AUDI, unveiling the AUDI E concept car, which is built on a newly developed platform—the Advanced Digitized Platform—jointly developed with SAIC.
Back in May of this year, Audi announced a cooperation agreement with SAIC Group and SAIC Volkswagen to strengthen local collaboration, forming the Audi-SAIC cooperative project.
The first concept car of the AUDI brand, the AUDI E concept.
Commentary: When luxury brands create electric vehicles, they often assert, "This is an electric vehicle, but first and foremost it is a Porsche/Benz/BMW/Audi or other brand..." This reflects a strong confidence rooted in brand power but can also indicate a lack of urgency for transformation.
Now, Audi has taken its first step. The latest product of the Audi-SAIC collaboration has abandoned Audi’s iconic four-ring logo, instead using the English word “Audi” as its logo, a clear indication of their determination to reshape the brand from scratch in the electric era.
Looking back at the past 40 years of the Chinese automotive industry, joint venture brands have completed their first stage mission—nurturing China's industrial chain, technology, and talent. In the era of smart electric vehicles, no market can match the speed at which new technologies can be rapidly implemented and put into extensive practice as that of the Chinese market.
The Chinese market is large enough, and the strength of new companies is robust enough, to the point that consumers are no longer clinging to the logos of traditional powerhouses but are instead choosing to embrace Chinese leading technology. In this context, joint ventures are undergoing transformations. Some are beginning to involve Chinese teams in, or even take charge of, product definition; others are establishing or upgrading R&D centers in China; and some, like the Volkswagen Group, are even setting up electric vehicle R&D cores in China to develop technology for global export.
The new SAIC-Audi electric vehicle project represents a shift, no longer just a case of Audi applying a “China patch” to global models, but a collaborative effort where the Chinese teams focus on intelligence while German teams handle chassis tuning and design, leveraging the strengths of both sides to co-create the vehicle.
This marks the most promising transformation we have observed in the automotive joint venture landscape after 40 years.
