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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 goal of this restructuring is to streamline management, reduce redundancy, and enhance service integration. Key changes include the reorganization and optimization of sales regions, with the number of major regions cut from 20 to just 8. In terms of corporate structure, the company has reduced its departments from eight to five, and the management hierarchy has been simplified from three levels to two. Shenlong's reforms have been bold and decisive, marking the first major reengineering effort among mainstream automakers this year. The question remains: how will these changes impact Shenlong’s future? And where will the company go from here?
Recently, Liu Weidong, general manager of Shenlong Motor Co., Ltd. and deputy general manager of Dongfeng, shared his insights in an interview. He mentioned that the number of business offices was reduced from 20 to 8. “The core of our institutional reform is to implement flat management,†he said. “We introduced flat management across all commercial offices in the first half of the year and then reduced their numbers in the second half. This is the second time within two years that we’ve adjusted the number of offices. Previously, we increased them to meet market development needs—like in 2002 when we expanded from 12 to 20 representative offices. Now, we’re reducing from 20 to 8.â€
Liu also explained that Shenlong currently operates 94 four-in-one dealerships nationwide. “With the maturity of our outlets, we now believe the headquarters needs to strengthen its influence. In the early days, when dealers were not well-established, the Commerce Department played a guiding role. But today, we need to focus on improving the dealers’ own management capabilities.â€
This year, Shenlong reduced its sales target from 150,000 to 100,000–110,000 units. Some industry observers suggest this is due to pressure from investors and shareholders over sluggish sales, prompting adjustments in management and marketing strategies. There have also been reports that the French PSA Group raised concerns about the profitability of Shenlong’s Chinese plant, setting a cap on losses for the year.
Liu Weidong denied that the reforms were purely reactive. “Due to overly optimistic market expectations last year, our sales targets were inflated,†he admitted. “Our initial goal was to sell 150,000 vehicles, but we had to adjust it down.†He also attributed the changes to the dual-brand strategy following Peugeot’s entry, which required structural realignment. “At the time, we considered creating multiple companies, but after a year, we realized a unified group structure was better.â€
In terms of personnel, only 3%–4% of employees received retraining, with no mass layoffs. “A good company doesn’t fire people—it trains them,†Liu said. While there were no major leadership changes, senior staff were streamlined, and more talent was brought in from the market. Both shareholders and internal teams were involved in the restructuring.
Regional representatives saw significant changes due to the reduction in office numbers. Each major region now has a special deputy director to handle big clients, government relations, and group purchases. Liu emphasized that the goal is to reduce management scope and improve efficiency through process-oriented flat management. “Now, it takes just two hours to move from car purchase to financial booking,†he said.
Liu also noted that the auto industry’s downturn this year caught many by surprise. “The fierce competition is just the beginning. It will grow even more intense over time,†he warned. He believes the era of thin profits is upon us. Two main factors are driving this: macroeconomic control and overly optimistic market forecasts. Additionally, consumer financing has become more difficult, with installment purchases dropping from 50% to under 10%.
Looking ahead, Liu expects total production this year to reach around 2.2 million units, with inventory likely to rise. Despite challenges, Shenlong continues to adapt and evolve, seeking ways to stay competitive in a rapidly changing market.
Liu Weidong, born in October 1966 in Hubei Province, graduated from Wuhan Institute of Technology in 1988. His career spans various roles, including product designer, technologist, and general manager of several key companies before becoming general manager of Shenlong Motor in 2001.
To further support its sales, Shenlong recently partnered with China Everbright Bank, China CITIC Industrial Bank, and Bank of China to establish a "sales financial services network." These agreements provide credit support and settlement services to dealers, helping to boost sales and manage risks effectively. In a climate where banks are hesitant to lend to the auto sector, this partnership could prove crucial for Shenlong’s recovery and growth.
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