Summary of Key Points
Shenlong Technology, a new company with a French joint-venture background, has set its sights on the new energy sector right from its inception, but it faces fierce competition in the Chinese market. Its transformation strategy is clear: shifting from producing fuel vehicles to electric vehicles, and changing from importing models to designing, producing, and selling vehicles in China for global markets. To gain a foothold, the company refuses to engage in price wars and avoids producing hastily assembled vehicles. Instead, it focuses on global research and development, intelligent technology, and a unique French design approach. This year, it will focus on building a solid foundation, while launching new products next year to make a significant breakthrough.
Detailed Analysis
1. Shenlong Technology: A French-Japanese Joint Venture Entering the New Energy Market
Shenlong Technology is not a completely new company; it is a joint venture involving Shenlong Automobile, Dongfeng, and Stellantis Group (the parent company of Peugeot and Jeep), among others, with a strong French brand heritage. However, its mission has changed. Previously, the joint venture mainly sold fuel vehicles imported from abroad, but now it aims to transition to producing electric vehicles for global sales, starting with four models planned for release in 2027. This marks a significant shift, as China has become its new energy export hub, reversing the previous model of importing vehicles for domestic sale.
2. Intense Competition in the Chinese New Energy Market
The annual penetration rate of new energy vehicles in China has exceeded 50%, indicating a nearly saturated market. Domestic brands like BYD and Geely hold a 65.6% market share, while German and Japanese brands account for another 27%. The remaining 8% is being contested by French, Korean, and American brands. In this context, Shenlong Technology refuses to engage in price wars, stating that such tactics would only lead to losses. The company also avoids producing hastily assembled vehicles, believing that its role as a joint venture goes beyond just selling cars; it aims to create products with value and build a comprehensive ecosystem, without compromising on quality.
3. Global Research and Development: A Major Effort
Previously, Shenlong Technology focused on developing models for the Chinese market. Now, it must adapt its approach for global markets. Cheng Jun, the company's executive, emphasizes that developing products for different regions requires a significant effort. This includes adapting to various regulations (such as European carbon emission standards and American safety requirements) and user preferences (e.g., Europeans prefer smaller vehicles, while Southeast Asians prefer higher ground clearance). This means doubling the research and development efforts to ensure that products are suitable for each market, which will increase costs and time.
4. Competing in Intelligence While Maintaining French Style
In the new energy sector, intelligence (such as autonomous driving and smart infotainment systems) is a key differentiator. Shenlong Technology is already in the process of finding suppliers for these technologies and expects to make new moves within the next two months. The company also insists on maintaining its unique French design, despite the trend of many emerging brands adopting similar designs. Cheng Jun notes that French design has its value and that many emerging brands are actually learning from French traditions.
5. Internal Transformation: Accelerating for Next Year’s Launch
Shenlong Technology has recognized its past shortcomings, including slow decision-making, which led to a lack of new products for five years. With the new CEO of Stellantis Group in place, the company has become more agile. This year is dedicated to strengthening its foundation, including improving customer services, transforming its sales channels (such as 4S stores), and optimizing internal processes. Once the new products are ready, the company aims for rapid growth. Despite being a newcomer, Shenlong Technology is stepping up its efforts to catch up with the leaders in the new energy sector.
Conclusion
Shenlong Technology’s transformation represents a bold attempt by a French-Japanese joint venture to thrive in the new energy era. The company aims to leverage China’s new energy ecosystem for production and exports while preserving its brand identity. It must navigate the intense competition in the Chinese market and expand globally, while also catching up in areas such as intelligent technology. The success of this strategy will depend on the competitiveness of its new products next year and whether its unique design approach resonates with consumers. For now, it has clearly shifted from a passive stance to an active one in the competitive new energy market.