Jan 15, 2019 /EqualOcean/ - According to The Paper.cn (澎湃新闻), 6 executives out in the management shift yesterday in Tianjin FAW Xiali Automobile (天津一汽夏利汽车), reasons why these executives chose to leave are unexplained.
Tianjin FAW Xiali is an economical car manufacturer controlled by FAW Group Corporation (Previously named First Automobile Works, Ltd). It is a listed company integrating vehicle manufacturing, engine design, transmission production, sales, and scientific R&D together. The predecessor of the company is Tianjin Mini Automobile Factory. On June 14th, 2002, FAW Group signed a restructuring agreement with Tianqi Group (天汽集团) which allows FAW Group to transfer 50.98% share of the company to Tianqi Group, hence Tianqi began to have the controlling power towards the company. The company was formally incorporated into the FAW Group Corporation.
It is noticed by the journalists from The Paper.cn, almost all the executives left this time have experience serving FAW Group in the past. For example, Chairman WANG Guo Qiang (王国强) was the member of the standing committee of the party and deputy general manager of the FAW Group; Director BI Wen Quan (毕文权), also served in FAW Group ever since 1994. While most of the new executives are selected from the talents who has always been contributing to Tianqi Group.
A large number of executives down more or less signifies poor performance of the company, if the company is doing well, there will be no need for a change in the management. It's quite obvious that Tianjin FAW Xiali did not have a strong performance. Also according to the author of the article on The Paper.cn on the 9th Jan, Tianjin FAW Xiali revealed production and sales volume of the company's cars in 2018. The accumulative sales of Tianjin FAW Xiali in 2018 was 18791 units, decreased by 30.59%; Judging from the figure in December 2018, a decrease of 74.66% comparing with the percentage of the same period in the previous year. Also by the end of 2018, Tianjin FAW Xiali offered 15% of Tianjin FAW TOYOTA shares back to FAW Group in order to get more funds to further develop itself, and it also promised to accelerate the transformation from traditional fuel vehicles to EVs.
These messages above seem very pessimistic, but it does not necessarily mean that. Since management change could also signify the point when the company realizes what went wrong and started to head for the correct direction. After all, the company's stock price had remained quite flat for the past two years, and the company is among the ones who had not yet launched a single electric vehicle model in the EV boom, and who to blame? Even if the management feels reluctant to take the full responsibility, they, to some extent, cannot escape from it.
Whether the company can rebound from the previous traumas or not, does not necessarily be decided by the management change. It is depending on what exactly the company will do from this point. If it could identify the right trend, make doable policies, react fast enough, and take actions strictly according to their plans, the company might as well have the opportunity to win in the new battlefield.