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In the past 2007, the comprehensive cooperation agreement between SAIC and SAIC Motor Group drew an annual ending for the Chinese auto industry.
Just entered 2008, Dongfeng and Hafei, Beijing Automotive and Southeast Automotive, and even FAW and Changan's restructuring news have been reported. On April 19th before the 10th Beijing International Auto Show, Dongfeng Automobile officially stated in the Great Hall of the People and Hafei that The restructuring is ongoing and has received strong support from the government.
Since the establishment of the Shangnan Cooperation, SAIC, FAW and Dongfeng, which are in the first echelon, have either been reorganized or are undergoing restructuring. FAW, which has just lost its "first" position on scale, is also seeking quality M&A resources; the second echelon Among them, Beijing Automobile indicated that it was interested in Southeast Motor, although Changan Automobile did not show it yet, but there is news that FAW is interested in it.
As a result, the leading company in the second echelon of GAC Group seems to have become one of the most “safe†in the reorganization of the Chinese auto industry.
Does GAC Group really have no intention to rely on restructuring, mergers and expansion?
Guangzhou Auto's Expansion
In the "Eleventh Five-Year Plan for Development of China's Automobile Industry" just released last year, the clauses concerning the restructuring of the organization clearly stated that "one or two companies with an annual output of more than 2 million vehicles (of which independent brands account for more than 50%) ) Large-scale automobile production enterprises (groups) whose exports account for more than 10% of output; several key automobile manufacturers that produce more than 1 million vehicles each year (of which independent brands account for more than 50%) and exports account for more than 10% of their output."
This undoubtedly reveals an important message. In the next 5 to 10 years, the first echelon of the Chinese automobile industry will not only not expand, but may shrink, and the new “big three†or even “two big†auto companies will follow the scale. Upgrade, get more government support, and it is possible to enter the stage of the world's auto giants on this basis.
Although GAC Group has always stated that it is still the “younger brother†of the Chinese auto industry, the company that has only reorganized and consolidated for only 10 years has not only been unable to underestimate the strength of the Peugeot’s shadow and the establishment of two exemplary joint ventures. Its ambition to enter the first tier is also constantly changing. For the GAC Group, despite 2007 sales of 500,000 units, it achieved a sales profit of 10 billion yuan, second only to the 1.23 billion yuan profit of the 1.43 million units of FAW Group, which is nearly three times its production and sales volume. Faced with such industrial planning, it is still far from the goal of entering the first tier, both in terms of scale and the integrity of the product sequence.
Nowadays, besides the need for greater development, the government's regulatory policies have also begun to promote mergers and reorganizations among large enterprises, clearly demonstrating the tendency to “strengthen and strengthen the countryâ€. Guangzhou Automobile Group, which has already got rid of the "qualification line," also needs to make its own choice under such an industrial policy. It is to take advantage of the policy and to leapfrog in scale through mergers and reorganizations. Or is it currently in fifth place and second in profits?
It can be seen that after 10 years of accumulation, Guangzhou Automobile Group, now known as the “richestâ€, has no more internal mergers and acquisitions than Others, let alone its good profit accumulation and accumulation of experience in production and management from foreign countries. It also prepared for the next expansion. It can be said that the current GAC Group not only has the impulse to acquire, but also has merger conditions. The first question that needs to be answered here is: What is the merger and reorganization between auto companies? Obviously it is not merger for merger. Perfecting the product line, gaining scale effect and technology, obtaining the R&D platform, obtaining the brand, and even the purpose of Chinese characteristics - rationalizing the relationship with the joint venture partners have become one of the reasons.
Another question is, in the "Eleventh Five-Year Plan" of China's automobile industry, what are the specific indicators for "one or two large-scale automobile production enterprises (groups) with an annual output of more than 2 million vehicles?" Perhaps we can see from the current FAW Group and SAIC Group products, from cars to SUVs, from trucks to passenger cars, and China's broad masses of mini-vehicles, can be said to cover commercial vehicles and passenger vehicles in various fields The full range of product lines guarantees sales of 1.43 million and 1.55 million in the two major groups in 2007.
In contrast, GAC Group’s sales were largely derived from the two joint ventures of Guangzhou Honda and Guangzhou Toyota. In 2007, the two companies achieved sales of 295,300 units and 170,300 units respectively, which together accounted for 90 units of sales of GAC Group. %. The products of these two joint ventures are also concentrated in several products in the sedan and MPV models.
Other companies under the GAC Group, such as Yangcheng Automobile, Guangzhou Isuzu, and Denway Passenger Cars, not only have a small percentage of sales, but also concentrate on passenger cars, light trucks and other fields, and are less competitive than similar domestic products. As for heavy trucks and mini-cars, such The current hot models, GAC Group is even less.
Reorganization of Shen Fei Hino
In fact, in a sense, SAIC Group's reorganization of the Nanjing Automobile Group, although there are rational considerations Roewe, MG considers, but Nanjing Auto's light trucks, light passengers are also an important consideration for SAIC Motor to improve its product line and achieve economies of scale. GAC Group clearly has this understanding, but its action is not as dramatic as it was in the South. At the same time that Guangqi Group achieved a sales revenue of 100 billion yuan, Zeng Qinghong, general manager, said, “First of all, commercial vehicle production capacity is seriously deficient. Only a small number of passenger cars and light vehicles are comparable to Shanghai and Beijing. I believe that with the When it is established, the situation will change."
The reorganization of Shenfei Hino is a test of GAC Group's merger and reorganization to improve the product line and take the first step of expansion. In fact, Guangzhou Automobile Group had already made up for the shortcomings of commercial vehicles through a joint venture with Hyundai Motor Co., Ltd., but as Zheng Mengji was imprisoned, and Hyundai Motors will devote more efforts to saving the situation in China in 2007. In the field of passenger vehicles, this huge project, which was planned to invest US$1.24 billion, eventually ran aground.
Fortunately, GAC Group has another preparation. As early as in 2004, GAC Group and Shenfei Hino had already started their contacts, but the progress of the negotiations between the two parties has been slow. During this period, they also experienced successful contracts between GAC and Hyundai Motor’s commercial vehicle projects. This was once considered as GAC. Aggravate the bargaining with Shen Fei and Hino. As GAC's modern commercial vehicle projects ran aground, GAC Hino commercial vehicle projects followed suit.
On July 30, 2007, the National Development and Reform Commission approved a blanket package that Guangzhou Automobile Group Co., Ltd. and Hino Motor Co., Ltd. held a Sino-foreign joint venture and reorganized Guangzhou Yangcheng Automobile Co., Ltd. and Shenyang Shenfei Hino Automobile Co., Ltd. project.
GAC Hino Motor Co., Ltd. (referred to as GAC Hino), established by the two parties, will purchase the assets of Guangzhou Yangcheng Automobile Co., Ltd. to produce its own branded products and to cancel the company's production qualification.
Established a new plant in Conghua and reorganized Shenyang Shenfei Hino Automobile Manufacturing Co., Ltd. at the same time. The registered capital of this project is 1.5 billion yuan, and the total new investment is about 3.1 billion yuan. Among them, the registered capital of the reorganized Yangcheng Automobile Ease of Land Construction Project is 1 billion yuan, and the newly-added investment is about 2.4 billion yuan; sufficient Shenfu Hino project new investment registered capital 500 million yuan, new investment is about 700 million yuan.
On December 24, 2007, Guangzhou Automobile Co., Ltd. and Hino Motors held a grand foundation stone laying ceremony at Conghua Pearl Industrial Park in Guangzhou, Guangdong Province. As one of the two production bases of GAC Hino, Guangdong Conghua Base covers an area of ​​1.06 million square meters for the first time. It produces key assemblies such as Hino Heavy Trucks, tractors, and Yangcheng brand light trucks, engines, and drive axles. The first phase of the plan will form an annual output of 20,000 heavy trucks, 25,000 engines, and 30,000 light trucks. It is expected to start production in mid-2009.
In addition, the Shenyang base, which was acquired through Shenfei Hino, will introduce Hino Multifunctional Commercial Bus and gradually expand the existing production capacity to 4,000 buses and 5,000 chassis per year.
According to the GAC Group, GAC Hino Chemical Base will become one of the largest commercial vehicle production bases in China. This can also be seen from its planned production capacity. The annual output of 20,000 heavy trucks can already enter the top ten in the current heavy truck companies in China. With the consistent development speed of GAC Group, this “first phase production capacity†is obviously still It's just the beginning.
It should be said that GAC Group’s merger of Shenfei Hino has the primary purpose of restructuring and rationalizing its commercial vehicle segment. Although GAC Group has previously owned commercial vehicles such as Yangcheng Motors, Denway Bus and Guangzhou Isuzu, it has covered high-end light trucks and passenger car products. However, subordinate commercial vehicle companies have not been able to form a concerted effort and their output has been hovering in the hundreds or thousands. The scale of the vehicle, even the Guangdong Province did not go out.
To develop new markets and make up for shortfalls, GAC Group must first rationalize its commercial vehicle business, while the commercial vehicle segment needs to be developed. GAC Group, which lacks relevant experience, needs to introduce a strong strategic partner. The Hino car behind Shen Fei and Hino is another purpose of GAC's merger and reorganization.
Hino Motors, which has a history of 66 years, has been focusing on the manufacture of commercial vehicles since 1950. It mainly produces trucks and buses. Hino Motors has now become the largest commercial vehicle manufacturer in Japan. Its current annual sales volume is about 100,000, which occupies the largest market share of Japanese commercial vehicles, and a large number of products are exported overseas. Such a professional commercial vehicle company is exactly what GAC Group needs.
What's more, in August 2001, Hino Motors was controlled by Toyota Motor, and now Toyota owns 50.2% of Hino Motors. For GAC Group, which already owns Guangzhou Toyota, through the acquisition of Shen Fei Hino, it can be said that it has achieved full cooperation with Toyota Motor Corporation from passenger cars to commercial vehicles. The relationship with the world’s largest auto giant has become even closer, allowing the GAC Group to use more resources.
How likely is it to acquire Changfeng
Commercial vehicles are of course the group that GAC Group is eager to expand. However, with the launch of GAC Group’s own brands, the long-term dependence on the two joint ventures in the passenger vehicle sector also needs to change. Relying solely on joint ventures, GAC Group is clearly not likely to enter the first tier. Although GAC Group has invested 6.8 billion yuan to establish its own brand R&D and production base, on the one hand, the production date is to reach 2010, which is the end of the “Eleventh Five-Year Planâ€; on the other hand, GAC will position its own brand at the high end. , This determines the size of the middle and low-end models still need to support the amount of support. However, from the current GAC Group's technical reserves, too long a product sequence is obviously not achievable. Therefore, GAC Group has proposed an open concept of autonomy and will become a “world wide automobileâ€, integrating domestic and foreign resources to build its own brand cars. On this basis, the GAC Group has also made possible the merger and reorganization of its own brands in the field of passenger vehicles. Zeng Qinghong said, “We have accumulated capital, technology, and talent, and have initially had the ability to go global.†The Guangzhou Automobile's Hino commercial vehicle project was the first time we went out to restructure Shenfei Hino. "The question is who is the next target of merger? According to sources, Changfeng Automobile, located in Hunan, is in contact with GAC Group to discuss the possibility of cooperation between the two parties. Although this news has not been confirmed by both parties, such cooperation is not impossible in the current wave of reorganization of the Chinese auto industry. Changfeng Motor is a joint-stock company established in October 1996 by nine corporate entities such as Mitsubishi Motors and Changfeng Group. Mitsubishi Motors owns approximately 14.59% of the company's shares, and is the second largest shareholder of the company. The director and two deputy general managers are resident. Changfeng Group, the largest shareholder, was formerly the No. 319 Factory of the Chinese People's Liberation Army. It was established in 1950 and was restructured in October 1996 to establish Changfeng (Group) Co., Ltd. In September 2001, it was transferred to the management of Hunan Province. Changfeng Automobile has formed the strategic layout of “4321â€, which is the production base of four major parts and components: Hunan Changsha, Yongzhou, Hengyang, Huizhou, Guangdong; three major vehicle production bases: Changsha, Yongzhou, and Chenzhou, Anhui; two R&D centers: Hunan Changsha, Beijing; a headquarters: Changsha, Hunan. With an annual output of 100,000 vehicles production capacity. A closer look reveals that there seems to be a lot of potential and reciprocal cooperation between the two.
The first is geographical proximity. The manufacturing industry in the Pearl River Delta region has now shifted internally. Compared to the increasing manpower, logistics, and land costs in Guangdong, the neighboring Hunan region has become the preferred inward migration target for many manufacturing industries including the automotive industry.
The well-developed railways, waterways, and provinces that have always been known as the most populous provinces have made Hunan a natural attraction to Guangdong's manufacturing industry. For GAC, Hunan has no shortage of manpower and sufficient educational resources. In its own radiation circle, it also has innate affinity with Changfeng Motor in its geographic location. Secondly, from the perspective of product lines, currently the main SUV products of Changfeng Automobile is exactly what GAC Group lacks. The recently launched production of glazed hatchbacks and subsequent passenger cars can also complement the high-end sedan products planned by GAC Group. It can be said that the product line can be extended over a long period of time.
Third, GAC Group has always had the advantage of cooperation with Japanese-funded enterprises. The two joint ventures under GAC Group cooperate with Japanese companies. Over the years, the successful operation of the two companies has also made GAC Group the best domestic company in joint ventures with Japanese companies. The partner of Changfeng Motor is also the Japanese-owned Mitsubishi Motors. From this point of view, the reorganization of the two companies is obviously much easier.
At present, with the Guangzhou Automobile Group as the center, the huge parts and components industry cluster formed in the Pearl River Delta region is also mainly Japanese-funded or providing Japanese auto parts companies with supporting parts and components companies. Cooperation with Changfeng Automobile will undoubtedly maximize the scale effect of this industrial cluster. From another perspective, GAC Group's position in domestic auto companies and its government resources will undoubtedly make Mitsubishi Motors happier and thus strongly promote the cooperation between the two.
Fourthly, looking at the current Chinese auto companies, although there are many manufacturers, since the “Tianyi restructuringâ€, under the current tide of reorganization, various companies have “matched†one after another, and can provide quality resources for several major automobile groups to merge. Already not much, for GAC Group, how to find a company that can expand its own strength as soon as possible in the existing selection can be described as a time to wait. Finally, although Changfeng Automobile has a military background, Dongfeng’s acquisition of Hafei has set a precedent for the cooperation between the SASAC and the military system. Moreover, the ownership of the Changfeng Group has also been delegated to the Hunan Provincial SASAC, and is also owned by the local SASAC. Like GAC Group, this also provides guarantee for the government's role in the cooperation between the two parties.
In addition, around Guangdong, Changfeng Automobile is almost the only car company with value merger. Guangxi's commercial vehicle companies have their own affiliations, and they are also in conflict with the existing commercial vehicle segment of Guangzhou Automobile Group; in the east of Fujian, it depends on the cooperation of Southeast Asia Auto's three partners - Mercedes-Benz, Chrysler and Mitsubishi. Mercedes-Benz and Chrysler’s partner, BAIC, is still more inclined to the Japanese GAC Group, which has a lot of variables.
“In the future, such things as the integration of SAIC and SAIC will continue to happen. Eventually, the country will form four sections: FAW in North China, SAIC in East China, and Dongfeng in Central China. We will fight for South China. If mergers and acquisitions are really an opportunity for us, And it is an opportunity to support the next 10 years of development. We must not miss it.†Zeng Qinghong’s remarks, despite being humble, but clearly expressed the objectives of the GAC Group, South China, the most dynamic economic sector in China, It is a position that Guangzhou Automobile Group will never give up. What's more, the current GAC Group has even greater goals. Its “Eleventh Five-Year Plan†mentioned that in 2010, the automobile production will reach 1.3 million, and the sales income will reach 200 billion yuan, and it will enter the top 300 of the top 500 global enterprises. , Top 20 national enterprises top 500, the top four national automotive industry goals. Faced with such a goal, mergers and acquisitions are still a realistic choice, and whether Guangzhou Automobile Group will become the next focus in the reorganization wave, we will wait and see.