New "marginal people" in car enterprises Zhengzhou Nissan hits double-brand breakthrough


By relying on a non-mainstream model of “stitching and supplementing”, Zhengzhou Nissan Paladin has sold more than 40,000 vehicles in three years, and this performance sounds good.

However, behind the “outdated” performance, what is reflected is the helplessness of a new “marginal person” who walks in the joint venture system.

Hit the wall

Recently, Zhengzhou Nissan announced that it will launch its partner Nissan’s MPV model Serena in July next year. Its Chinese name is tentatively scheduled to be “Serena”. Three years of Zhengzhou Nissan, the world's only SUV model, finally ushered in hope. However, it is still puzzling - is it still necessary to continue deep cooperation or start a new one? Zhengzhou Nissan needs to find its own way.

It was acquired by Dongfeng and became a member of Dongfeng and Nissan's joint venture system. Zhengzhou Nissan has been reconciled.

As one of Nissan’s earliest investment projects in China, as early as 1993, Nissan had 5% of Zhengzhou’s Nissan shares (after several adjustments, the ratio rose to 30%). In 1999 Zhengzhou Nissan introduced the Nissan D22 pickup truck. Due to the small size of the positioning market, the days just started are not easy.

After holding Nissan, Renault dispatched Carlos Ghosn. The “iron-wrist” figure in the car industry decided to work hard in China. After that, Nissan will re-select its partners in China. As for the Zhengzhou Nissan, which has been struggling to manage, Carlos Ghosn only favored an SUV, Paladin. On July 1, 2003, Dongfeng and Nissan officially announced the establishment of a joint venture company, Dongfeng Motor Co., Ltd. With the cooperation between Nissan and Dongfeng on the right track, Zhengzhou Nissan began to appear “marginal” in the overall layout of Nissan’s China.

On March 16, 2005, Dongfeng Motor Co., Ltd. announced that the company spent 352 million yuan to acquire 51% of Zhengzhou Nissan. This transfer of equity resulted in the strategic integration of Nissan’s business in China, and Nissan finally emerged in the Chinese market with a unified brand image.

However, the day after Zhengzhou Nissan was included in the Dongfeng-Nissan system, the days did not improve. An outdated Paladin "sew" for years; the previously relied on pickup business was also at a low point due to market capacity problems. The most depressing factor for Zhengzhou Nissan’s China is that he wanted to use Renishaw’s “East Wind” to greet Renault who had not yet entered China.

Business Dilemma

"Nissan's passenger vehicle base is located in Huadu, and Zhengzhou Nissan is positioned as a commercial vehicle." For the outside world, Zhengzhou Nissan challenged the world by relying solely on a Paladin model. Zheng Zhen Nissan general manager Guo Zhenluo responded by saying, “Zhengzhou Nissan sticks to this market segment (SUV and pickup), and the company operates very well”.

However, this is not the case. It is understood that before and after the introduction of Paladin, the profits of Zhengzhou Nissan in 2002 and 2003 were 100 million yuan and 300 million yuan respectively. However, with the weakening of the “new car (Paladin) effect” and the overall market trend, the annual profit of Zhengzhou Nissan dropped to more than 80 million yuan last year. In this regard, some analysts pointed out that the decline in Zhengzhou's daily production is not accidental. After the “success” entered the Dongfeng-Nissan joint venture system, the Japanese side has not yet injected new models into Zhengzhou Nissan. With only a single product, the joint venture company has difficulty in operating smoothly.

"This kind of product structure is indeed a problem," admitted Guo Zhentong. In the long run, Zhengzhou's Nissan is also bound to fall into a vicious circle - the more sluggish the performance, the less favored the Japanese, and the further away from the decision-making center. According to Zhengzhou Nissan’s official statement, “Zhengzhou Nissan, which has been doing foreign brand pickup for more than a decade in the Sino-foreign joint venture system, has fallen into confusion and confusion.”

Play "Double Brand"

Compulsory Zhengzhou Nissan launched its own brand plan at the end of last year and formulated a “dual brand” development strategy. "The implementation of a dual-brand strategy can complement each other in the brand layout," said Guo Zhenluo. The core of the "Double Brand" strategy is to use partners' resources to make themselves as big as possible and get rid of the fate of "marginal people."

There are many other companies that are on the edge of the JV system like Zhengzhou Nissan. Haima Motors is one example. After Mazda's cooperation with FAW (currently for technical cooperation, but the joint venture is just around the corner) formed, the seahorse chose to separate from Mazda’s “peace”. They are now focusing their efforts on their own brands. Although Jianghuai and Huatai have played indiscriminately in order to hold hands on the modern issue, after the completion of the layout of modern China, both of them were destined to be "abandoned"...

"Dongfeng-Nissan will not easily give up Zhengzhou Nissan." For Zhengzhou Nissan's position in the Dongfeng and Nissan joint venture system, an industry source who does not wish to be named analyzes that Zhengzhou Nissan is a commercial vehicle base in the Dongfeng-Nissan system. The products complement each other with Dongfeng’s light trucks. “Of course, it is uncertain in the future whether the two channels will be integrated.”

For "single-fly" performance of companies such as Haima and Huatai, the source believes that these companies will face market challenges by relying on only one or two models. What is even more crucial is that they have lost the support of foreign investment in technology and management. With the concept of “autonomy”, survival is the biggest issue when the domestic auto market layout has largely been completed. "For Zhengzhou Nissan, currently relying on Nissan technology to develop itself may be the most realistic choice."

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