Geely & Baidu JV Jiyue cuts projects due to financial troubles

Jiyue, the joint venture between Geely and Chinese search giant Baidu, faces financial troubles. It cuts projects and merges departments as the cumulative sales volume for 11 months of 2024 lies below 14,000 units. The company reportedly has no money to pay social security to employees.

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Jiyue is a joint project between Baidu and Geely formed in 2021. Initially, Baidu had a majority share in this project. But it failed to obtain the sales license for the car. So, the company was restructured with Geely taking the bigger share. Jiyue started selling cars in late 2023. However, its sales performance has been low due to fierce competition. As a result, its retail sales volume in China from January to November 2024 is 13,834 units.

Jiyue financial problems

Previously, the poorly-selling Jiyue brand was considered by some experts to be an experimental project to test high-end technologies like Baidu’s autonomous driving system. So, high sales numbers weren’t considered as the main thing for the brand. However, as we can see now, Jiyue has ended up having serious financial troubles.

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On December 11, Tech Planet media reported that Jiyue owed a communication supplier 360,000 yuan (49,550 USD) and hadn’t paid money after the due date. This amount looks insignificant for a JV between two Chinese giants. So, it turned into an important indicator of the severe problems Jiyue is experiencing.

On the same day, Jiyue CEO Xia Yiping held an online meeting with employees. He admitted that the company is facing financial problems. According to sources, Jiyue has no money to pay social security in November. So, employees are worried they won’t be paid salaries and year-end bonuses.

Back to the CEO speech, Xia Yiping said Jiyue entered the second stage of entrepreneurship. It comprises four main things that must be done:

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• Long-term investments in core technology to maintain leading advantages;
• Strengthening of sales and service capabilities to cope with market competition;
• Merging of departments and positions with duplicate functions;
• Cutting projects that cannot improve financial performance in the short term.

Previously, there were rumors spreading about Jiyue layoffs. However, company officials denied them. Now, it seems layoffs are an unavoidable consequence of departments & positions merging. Sina spoke with a Jiyue store employee in Beijing and received the answer that the company works normally with no changes in sales staff. Car delivery terms are also normal.

Jiyue overseas strategy

It seems that the Chinese market is too tight for Jiyue. It has too many competitors, including Geely-backed Zeekr. So, Jiyue is actively exploring overseas markets such as the Middle East. In May 2024, Jiyue participated in the Mobility Live ME 2024 event in Abu Dhabi, UAE. The Geely & Baidu JV aims to sell cars in UAE with Legend Holding Groups. However, there was no information about the market launch.

Jiyue is also exploring the possibility of launching sales in Russia, according to Jiyue’s local partner BorisHof. It was affiliated with Inchcape until 2022. Jiyue will be sold in Russia under the Jidu name.

It seems that overseas sales became the key strategy for Jiyue to survive through the financial crisis.  However, it has yet to enter international markets. We will keep an eye on the Jiyue situation, so stay tuned!