BYD pains

On August 26, when the chairman and president of BYD Co., Ltd. Wang Chuanfu announced cooperation intentions with representatives of the world-famous car rental company Hertz Corporation in front of the Hexagon Tower in Pingshan, Shenzhen, his heart may not be as calm as it seems. Easy.

Because on the same day, BYD released an announcement of 6 billion yuan in corporate bonds. A few days later, BYD reported that it had made significant layoffs. This caused the turbulent self-owned brand car companies to fall into turmoil again in the second half of last year.

The news that the sales team is in turmoil and financial resources are in short supply has also made Wang Zhifu’s promise of “2015 China First, 2025 Global First” made by the former.

In front of Wang Chuanfu and his team, not how to catch up with domestic and foreign counterparts, but to stabilize their position and dispel the outside world's doubts about the remoteness of traditional car cheap and new energy vehicles. Now BYD Auto is also making a strategic callback. In the second half of this year, it will release the flagship model G6 with its own research and development of engine and gearbox, amend the traditional technology of hollowing out the car, imitating the traditional car development model, and jointly leasing new energy vehicles. Giant Hertz continues to try to promote.

The layoffs storm August 29th, claiming BYD's staff "Ya Lu Zang" broke the news on Weibo: "August 29, 2011, BYD Auto Sales Department immediately disbanded all sales, limited to September 30 before looking for a way out, so suddenly When he resigned, he suddenly thought of the reasons for Xia's departure."

After the departure of Xia Zhibing, there was a rumor that BYD Auto Sales Co., Ltd. will lay off a large number of employees. Immediately after the release of this microblog, it triggered a large number of onlookers.

Li Yunfei, assistant to general manager of BYD Sales Co., responded with a Weibo response: “The sales personnel's normal personnel transfer has not been cancelled or dissolved by the marketing department. The personnel transfer is just to better improve the sales service level and improve the internal and external work efficiency.”

But then there were more netizens who claimed to be BYD employees posting on Weibo and forums.

The netizen named “Critical Reasoning” said: “We will cut 1,500 people at a time, even including some senior assistants at the general manager level, and the marketing department will undoubtedly be disbanded. A notice will be issued before September 1. This is absolutely necessary. Not normal transfer."

BYD Auto's internal staff confirmed to this newspaper that the magnitude of this layoff was unprecedented. It was prepared to cut from the current 2,700 to 800, and the layoff ratio would be as high as 65%-70%. The scope of layoffs involved all departments of the sales company, and the original six marketing divisions were all disbanded.

The employee also revealed that in fact, BYD auto sales companies have been laying off employees gradually since the end of last year, reducing from about 5,000 people last year to less than 3,000 people at present.

On microblogs and forums, many employees have expressed their dissatisfaction with the “strategic missteps made by employees”.

According to sources in the industry close to BYD, the original team of BYD Auto Sales Corp. was hurriedly expanding during the rapid expansion, and the organization design was inevitably redundant. After BYD’s rapid sales growth, the marketing team carried out the annual sales of millions of vehicles. Expansion. However, the sales growth of BYD autos has been no longer significant since last year, and the streamlining of sales teams is inevitable.

The news that the capital is tight and accompanied by a large-scale layoff is another news than BYD’s large-scale debt issuance.

On August 26, BYD (002594) announced that the company intends to issue corporate bonds of no more than 6 billion yuan (including 6 billion yuan) and the term of the bonds will not exceed 10 years. The announcement stated that the issuance of corporate bonds was intended to "meet the company's funding needs and effectively reduce financing costs."

According to the 2011 semi-annual report announced by BYD, the current debt ratio of the company is 62.55%, which is still at a normal level. After the issuance of corporate bonds, the company’s long-term debt ratio will increase, short-term liabilities will decrease, and company debt The structure will be greatly improved and the short-term debt repayment pressure will be greatly reduced.

However, after the company just returned to A-shares and raised 2 billion yuan in funds, it issued 6 billion yuan in corporate bonds. In the eyes of securities analysts, it once again shows that BYD has a shortage of funds.

The financial report for the first quarter of this year shows that the mad expansion in the past two years has caused BYD’s current liabilities to approach twice the current assets. As of the end of June this year, BYD’s current assets were 19.9 billion yuan, current liabilities were 31.377 billion yuan, and non-current liabilities were 6.86 billion yuan. Net liquidity (that is, the balance of current assets minus current liabilities) fell from -11.81 billion in 2008 to -101.22 billion in 2009, and fell to -113.47 billion in the first half of this year.

Strategic pullback In the above-mentioned people who are close to BYD, the current large-scale layoffs and funding shortages are all inevitable "labor pains" during BYD's strategic adjustment period.

Since the massive dealer crisis last year, BYD has begun a strategic pullback. Reduce the annual sales target, no longer pursue 100% rapid growth; stop the rapid expansion of the dealer network, maintain the level of about 1,000, reduce the pressure on the dealer; at the same time take the lead in opening a large-scale price cut storm, the full range of its products discount.

However, in the context of the cancellation of preferential policies for small-displacement cars and the overall decline in the auto market this year, the performance of BYD Auto has not improved much. The semi-annual report recently announced that BYD sold a total of 220,000 vehicles in the first half of this year, down 23.4% year-on-year.

In the traditional automotive field, BYD also bid farewell to the brutal growth, began to invest in advanced engine and transmission technology. In September of this year, BYD will launch its flagship model G6, which will use BYD's independently developed direct-injection engine and dual-clutch transmission.

In the field of new energy, although the promotion of BYD electric vehicles at home and abroad was not satisfactory, the stockholder of Buffett was also implicated. It is considered that the investment in BYD is likely to add to the failure of his lifelong investment history, but as the new energy vehicle is His own future BYD can obviously not give up on this, will adjust the new energy vehicle to promote the route, focusing on the field of public transport and commercial vehicles.

The signing of an electric vehicle promotion agreement with Hertz not long ago is also an extension of this idea.

The question now is: How much time does the external market and competitive environment leave for BYD to adjust? How long can self-adjustment by BYD see results?