Nezha Automobile once again started self-rescue. On December 6, Nezha Automobile officially announced that due to the company's strategic adjustment, Zhang Yong will no longer serve as CEO and will be transferred to the company's consultant. The CEO of Nezha Automobile Company will be concurrently served by founder and chairman Fang Yunzhou.

CEO Zhang Yong stepped down in the latest adjustment, bringing an end to the recent public opinion storm of "Where is Zhang Yong?" However, when the whereabouts of a company's CEO becomes an industry topic, it is enough to reflect the instability of the company's management.

As a new power car company that grew up in the same batch as Wei Xiaoli, Nezha Automobile has reached its most dangerous moment.

Nezha car is in danger!

Nezha Auto's crisis has been foreshadowed for a long time. Huxiu analyzed in a report in the first half of this year that Nezha Automobile was facing huge operating pressure. Data shows that Hezhong Automobile, the parent company of Nezha, suffered losses of 4.840 billion yuan, 6.666 billion yuan and 6.867 billion yuan respectively from 2021 to 2023, with a cumulative loss of more than 18.3 billion yuan.

As of December 31, 2023, Nezha Auto's cash and equivalents were 2.836 billion yuan, but its short-term loan balance was 4.317 billion yuan. Huxiu Auto pointed out at the time that according to Nezha Auto’s loss trend, Nezha Auto’s cash situation would be difficult to support it in entering the next round of cyclical competition.

Entering the second half of the year, Nezha Automobile experienced financial crises one after another.


On the media day of the Guangzhou Auto Show in November this year, very few people visited the Nezha Automobile booth.

In mid-October, a Nezha employee broke the news that "Nezha Automobile can no longer pay wages, and the company owes a lot of money to its suppliers." Although Nezha responded at the time that the company's middle-level and senior executives had recently been adjusting the salary structure, and only individual salary payments were slightly slower, a new round of revelations later confirmed the rumors of salary cuts.

A Nezha employee publicly pointed out, "The company has reduced the salary of all employees. The salary reduction for employees with an annual salary of more than 1 million yuan is 30%, the salary reduction for employees with an annual salary of 500,000 yuan is 20%, and the salary reduction for those with an annual salary of less than 300,000 yuan is 5%." The salary reduction issue has not subsided, and Nezha Automobile has been exposed to launch large-scale layoffs, with the proportion as high as 70%.

Immediately afterwards, Nezha Automobile filed a lawsuit and arbitration application with the court due to arrears of payment, pointing out that Hezhong Automobile Yichun Branch and Nezha Automobile's operating entity Hezhong New Energy Group defaulted on its contract payment of 48.1954 million yuan and 12.7303 million yuan of payment for goods.

Nezha Automobile's contract disputes don't stop there. In December, according to an announcement from Fushi Holdings, its subsidiary Beijing Dis Public Relations Consulting Co., Ltd. had a service contract dispute with Hezhong New Energy Automobile Co., Ltd., and the case involved an amount of approximately 53.55 million yuan.

It is not difficult to see from various signs that Nezha Automobile’s financial situation is already very pessimistic.

Repeated adjustments with little effect

In fact, the fact that Nezha Automobile has reached such a situation is the result of poor management and a gradual decline. It’s not that Nezha Automobile didn’t make corrections, but judging from the results, it was true that the medicine did not reach the symptoms, and the adjustments had little effect.

With two products, Nezha U and Nezha V, Nezha won the honor of being the best-selling new force in car manufacturing in 2022. It delivered a total of 127,496 vehicles throughout the year. It was one of the first new force car companies to achieve monthly sales of more than 15,000 vehicles.


However, only a year later, Nezha began to make mistakes. At the product level, Nezha did not continue the strategy of low-priced cars such as Nezha U and Nezha V. Instead, it began to seek transformation and growth, and launched Nezha GT, Nezha S and other models.

Nezha wanted to achieve success with sports cars, but low-priced electric sports cars were obviously out of touch with market demand. Nezha GT was highly criticized after its launch. Nezha, which was in the spotlight at the time, not only failed to reflect on and adjust its products, but also responded with "a bunch of nonsense and all kinds of sarcastic comments."

Nezha GT has dragged down the overall sales performance, with current monthly sales not exceeding 100 units. It is worth mentioning that due to the launch of Nezha GT, Nezha suspended the large 7-seater SUV project and missed out on the family market, which has a large market space. Later results showed that Leopao took this market share and successfully overtook Nezha, becoming a new force and dark horse.

Nezha has never given up its pursuit of success in 2023. After Nezha GT, Nezha S was launched, positioning it as a high-end B-class sedan. However, after its launch, the response was still mediocre, with annual sales of only 20,278 units.

The failure of these two products dealt a heavy blow to Nezha, which was quickly overtaken by its competitors.

In January of this year, Nezha CEO Zhang Yong issued a document admitting that "there was no good connection between old and new products, and the rhythm was chaotic; new products were launched at too high a price." However, he believed that the more core problem was marketing. The corresponding adjustment measures were that Jiang Feng, the executive vice president of marketing, was removed from his position. Zhang Yong also served as the general manager of the marketing company and readjusted the marketing system.

Nezha made drastic adjustments, but with little effect. Nezha has become a hot topic of public opinion due to marketing issues many times this year, and the black and red routes have not been effectively converted into actual sales. Whether it is initiating a "company name change" on the Internet or tying up the red-clothed leader for marketing promotions, Nezha Automobile still has difficulty gaining popularity.

Furthermore, Nezha has missed the market opportunity. The low-price SUV market has been entered by more competitors. Nezha Auto's advantage in the affordable product market has gradually been weakened. Even though it tried to return to the SUV model camp through Nezha X, Nezha L and other models, compared with competing products such as Leapmo C10 and Deep Blue S7, Nezha Auto's brand power and product advantages are not obvious, making it difficult to break through.


Nezha Auto has not released delivery data since October

From January to September this year, Nezha Automobile’s cumulative sales were only 85,908 units, a year-on-year decrease of 12%. It is worth noting that Nezha has not disclosed delivery data since October this year. According to data from the Passenger Car Association, Nezha’s estimated wholesale sales in October were 8,000 units.

While the deliveries of various car companies are rising one after another, Nezha's deliveries are decreasing, and the competitive situation has become very clear. The chain reaction caused by poor sales is still happening. Hezhong New Energy, the parent company of Nezha Automobile, fell into silence again after submitting an IPO application to the Hong Kong Stock Exchange. In addition, poor sales further increased operating pressure.

Now caught in the turmoil of layoffs, salary cuts, and payment arrears, Nezha Automobile has once again made high-level adjustments and announced that it will implement a series of measures to reduce costs and increase efficiency, such as streamlining the organization, eliminating redundant staff, focusing on business, and flattening management.

But the question is, can Nezha survive this disaster?

It's difficult for Nezha to overcome the calamity

Nezha Automobile's problem is not a single organizational problem, but an overall failure from product to strategy.

From a product perspective, Nezha Automobile has never found its core product positioning. Nezha has launched a total of 6 cars in the ten years since its establishment, including Nezha N01 for the B-end market, pure electric cars Nezha V, Nezha U, personalized coupes Nezha S and Nezha GT, and Nezha L focusing on the family market. Product planning and positioning are not clear.

This is actually the result of the unsteady top-level strategy.Blindly charging higher when the heel is not firmly established will lead to confusion in the brand image.

Other car companies are all well-known in their respective market segments, such as NIO's battery replacement and services, ideal range extension and family market, Xpeng's intelligence, zero-run price-performance, etc. In comparison, Nezha's brand image is very vague.

In the context of an industry with increasing competition and continued price wars, Nezha has little chance of breaking through with its existing product series. If Nezha wants to save the situation, it will have to rely on stronger product strength to speak for itself.

Furthermore, Nezha is already very tight financially. Cost reduction and efficiency increase can bring about a short-term hemostatic effect, butIf Nezha wants to survive, he needs the ability to form blood.

Overseas markets may be Nezha Auto’s way of making a living. Data from the China Association of Automobile Manufacturers shows that in the first half of this year, Nezha's new energy vehicle exports reached 17,687 units, ranking fifth among train companies in terms of new energy vehicle exports and first among new car manufacturers in terms of export volume.

Nezha has currently built factories in Thailand, Indonesia, Malaysia and other places, and has started mass production in some areas. It will also expand to Latin America, the Middle East and Africa, and then expand to Europe in due course. In order to support the development of overseas markets, Nezha's two major vehicle factories in Yichun, Jiangxi and Nanning, Guangxi were converted into parts factories.

Overseas has become the growth curve for Nezha to survive. Nezha Chairman Fang Yunzhou pointed out in a letter to all employees that Nezha Automobile can achieve half of its sales domestically and half abroad in the next 2-3 years.

Overseas markets are certainly very attractive, but for Nezha Automobile, which is strapped for funds, how far it can go after going global is still a question. Establishing assembly business and direct investment in building factories overseas requires a large amount of capital investment. Taking the Thai market as an example, Changan Automobile invested 9.8 billion baht (approximately RMB 2 billion) in building a factory in Thailand; GAC Eon plans to invest 6.4 billion baht (approximately RMB 1.3 billion).

From being the first to ship goods among new forces to being surrounded by crises, Nezha’s current situation is lamentable. Against the backdrop of intensifying competition in the new energy vehicle market, the market will not repeatedly give car companies opportunities to make mistakes. Nezha Auto has damaged its aorta. If this cardiopulmonary resuscitation fails to be effective, Nezha Auto may really not survive.

The letter from all Nezha Automobile employees is as follows: