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After a new round of comprehensive "downsizing," Shenlong has found itself standing at a fresh starting point. According to insiders, the main focus of this restructuring is to streamline management, reduce redundancy, and integrate services more effectively. The changes include the reorganization and optimization of sales regions, with the number of large regions reduced from 20 to just 8. In terms of corporate structure, the company has cut its departments from eight to five, and the hierarchy has been reduced from three levels to two. This bold and decisive reform marks the first major re-engineering by a mainstream automaker this year. But what impact will it have on Shenlong’s future? Where will the company go next?
Recently, Liu Weidong, General Manager of Shenlong Motor Co., Ltd. and Deputy General Manager of Dongfeng Company, gave an interview addressing these questions. He explained that the number of business offices was reduced from 20 to 8, emphasizing that the key to institutional reform lies in flattening the organization. The company implemented flat management across various commercial offices in the first half of the year, and then further reduced the number of offices in the second half. This is the second time within two years that Shenlong has adjusted its commercial office count. Previously, the number had increased from 8 to 20 to meet the needs of channel development, but now it's being scaled back.
Liu noted that Shenlong currently operates 94 four-in-one shops nationwide. He explained that as these outlets mature, the headquarters must strengthen its support. In the early stages of market development, dealers were less experienced, so the Commerce Department needed to guide them. Now, however, the focus is on improving the dealers’ own management capabilities.
This year’s reduction in Shenlong’s sales target—from 150,000 to 100,000–110,000 units—has sparked debate in the industry. Some believe the company is responding to investor dissatisfaction over sluggish sales. Others suggest it may be linked to pressure from the French PSA Group, which raised concerns about the profitability of Shenlong’s Chinese plant and set a limit on annual losses at no more than 300 million yuan.
Liu Weidong denies that the reforms are entirely “forced by circumstances.†He admits that last year’s aggressive market conditions led to overly optimistic sales targets. “We initially aimed for 150,000 units, but we’ve since revised our goal to between 100,000 and 110,000,†he said. The adjustment also came after the implementation of the dual-brand strategy following the introduction of Peugeot, which required a more unified organizational structure.
In addition, 3%–4% of employees are undergoing retraining, not being laid off. “A good company doesn’t fire people—it trains them,†Liu emphasized. While there were no major changes in top positions, senior staff were streamlined, and efforts were made to attract talent from the market. Both shareholders and local teams underwent adjustments, particularly in regions where the number of business representatives was reduced.
To manage the new structure, special deputy directors were appointed in each major region to handle big clients, group purchases, and government relations. Liu stressed that the goal of these changes is to increase speed, optimize processes, and improve efficiency. “Now, the response time from car purchase to financial booking is only two hours,†he said.
The auto industry faced a sharp downturn this year, and Liu believes the fierce competition is just beginning. “The era of meager profits has arrived,†he said. He attributed the challenges to both macroeconomic control and overly optimistic market expectations. Additionally, the shift from installment-based purchases to cash sales has impacted dealer financing, making it harder for banks and insurance companies to manage car loan risks.
Looking ahead, Liu expects Shenlong’s production to reach around 2.2 million units this year, with inventory likely to rise. Despite the challenges, the company continues to adapt, including forming partnerships with major banks like China Everbright Bank and China CITIC Industrial Bank to provide credit support and financial services to dealers.
Shenlong’s journey reflects a broader transformation in the automotive industry—one marked by downsizing, reorganization, and a renewed focus on efficiency and sustainability. As the market evolves, the company’s ability to adapt will determine its future success.
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