Baoneng's ambitious car-making plan shakes up Qoros' management

Feb. 26 (NBD) -- Qoros Auto (Qoros)'s biggest shareholder Baoneng Investment Group is seeking to boost the auto company's performance through a new executive reshuffle. 

Last Thursday, the Shanghai-based carmaker announced the introduction of three auto veterans of Japan's auto industry. This marks the third time in 14 months that the company has seen management changes. 

Yajima Kazuo, former global director of alternative energy vehicles at the Renault-Nissan Alliance, has succeeded Li Feng as Qoros' new CEO. Li will continue serving as executive vice president at Baoneng's auto subsidiary Baoneng Motor. 

Nagahara Oki, former global director for vehicle connectivity at the Renault-Nissan Alliance, has been named to the post of chief operating officer, and Hirai Toshiro, former head of entire vehicle lineup development at Infiniti, has been appointed as co-chief technology officer. 

Baoneng expects the new management team to bring in the spirit of the craftsman and philosophy of delicacy management to improve Qoros' internationalization level as well as capabilities of technology research and development, system building, and operating management. 

File photo/Zhang Jian (NBD)

The management reshuffle is largely due to the fact that Baoneng Chairman Yao Zhenhua is not satisfied with Qoros' sales for last year, sources familiar with Baoneng Motor told the 21st Century Business Herald. 

In 2018, Qoros sold 63,000 vehicles, a whopping surge of 322 percent from the level of 15,000 cars in 2017, but the substantial growth was primarily boosted by orders from Baoneng's car-sharing platform Liandongyun. 

After purchasing stakes in Qoros, Baoneng has injected a large amount of capital to enhance the carmaker's R&D capabilities. 

At Qoros' dealers conference in March 2018, Yao Zhenhua pledged to invest 10 billion yuan (1.5 billion U.S. dollars) annually in Qoros' new car development for 5 consecutive years starting from that year.  

However, different from the real estate industry, the auto industry is hard to generate big returns in a short run as it needs a great amount of money in the initial stage to support research and development, distribution network construction, and brand promotion. Yao doesn't understand the management rules of the auto industry, the above-mentioned sources said. 

Running a car company requires the capability of uniting people and reverence for the auto industry, which is a challenge for a management from different industries, an auto industry insider told the 21st Century Business Herald. 

The biggest problems now facing Qoros are limited distribution network, simple product structure and insufficient confidence of dealers and suppliers, an industry insider analyzed when reached by the 21st Century Business Herald. What the car company needs most is operational and sales talents. Though the newly recruited Japanese veterans are good at automotive research and development, they might face difficulties in making a difference as they don't know much about the Chinese auto market. 

While making efforts to better Qoros' performance, Baoneng is busy in building a new brand, which according to a source with Baoneng Motor is more beneficial to the conglomerate's expansion in the new-energy vehicle industry. 

After deciding to venture into the car manufacturing field, Baoneng has invested up to 124 billion yuan (18.5 billion U.S. dollars) accumulatively in the construction of new-energy vehicle production bases in Hangzhou, Kunming, Guangzhou, Shaanxi, and other places. 

Robin Wu, vice president of Baoneng Motor and director of Baoneng Motor's research institute, is in charge of the research and development of the new brand.