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JAC Devolves Management to Local, Rethink Its Strategy Mistake

 

Gang Yan, new general manager of JAC, has waved his reformation to executives of JAC after he announced to change organization structure in early August.

Recently, Gang Yan so expressed during interview that marketing company of JAC passenger car has almost 100 director level executives, but now head office at He Fei only takes 25 people, others are sent to local marketing regions.

As it known, JAC has entered passenger cat segment for 5 years. It has launched 7 models into market, but only 2 realize profit by now. With the decline tendency of commercial car segment, JAC is badly in need of ¡°the third foot¡± passenger car to take the pressure.

JAC has modest company culture for a long time. Therefore, when Gang Yan announced his strict reformation policy, it might conflict with company culture.

JAC is still rethinking the lesson of 3.15. Gang Yan mentioned about ¡°rustgate¡± of JAC Tong Yue again. On March 15, CCTV advocacy channel has broadcasted that JAC Tong Yue has rust problem. It does not influence JAC sales, which still increases 21% in the first half year. However, it has reflected passenger car department of JAC reacting slowly and bad communication with customer.

From Gang Yan¡¯s perspective, rustdoor underscores functional departments set unreasonable after JAC passenger and commercial car marketing integration. The similar problem does not only exist in after service department, but also spreads all over marketing, brand design and strategy making departments as well. Both former JAC marketing company and Xing Yue muti-functional auto marketing company own independent sales, market, service and administration departments. It has left almost 100 executives after the two company merged.

Compared with sales region policy, new marketing organization is more submerged and in detail as province unit. JAC passenger car marketing company delegates enough to province subsidies. Province marketing directors is approved to make local policy against specific local market situation within power range. It aims the stiff competition, and sales improvement.

JAC passenger car has invested more than 8 billion since its first passenger car Bin Yue launched marketing in 2008. The company has put 7 products into market, but only He Yue and Bin Yue has realized profit. JAC has sold 274 thousand vehicles in the first half year of 2013, which increases 21% over the same period of last year. Particularly net profit achieves 520 million Yuan, which increases 62.58% over last year. However, 90% profit comes from trucks and Refine series.

Rethinking the development and frustration of JAC passenger car, Gang Yan believes it is because of marketing factor, but not production factor. Both comes from An Hui Province of China, people inside industry comment Chery and JAC by ¡°grandiose aims but puny abilities¡± and ¡°grandiose abilities but puny aims¡±, which means JAC¡¯s R & D much better than its marketing, but Chery is opposite.

 
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