A review of major mergers, acquisitions, and restructurings in the domestic automotive industry from 01 to 2005

Event: On June 14, 2002, Yan Yanfeng, General Manager of FAW Group Corporation and Zhang Shitang, Chairman of Tianjin Automotive Industry (Group) Co., Ltd. signed a joint reorganization agreement at the Great Hall of the People in Beijing.

The reorganization took the form of equity transfer. Tianjin Automobile Group Company transferred 60% of its 84.97% stake in Tianjin Automobile Xiali Co., Ltd., which is 50.98% of the total share capital of Xiali Co., to FAW; meanwhile, Tianqi Group The company also transferred 75% of its Chinese equity owned by its subsidiary Huali Company to FAW Group Corporation. In this reorganization, FAW adopted acquisitions and allocations to control Tianjin Xiali and Huali, which are under-performing Tianhua Group, and assume their huge debts.

Comments: This is the largest and most influential joint restructuring of China's auto industry at that time. FAW, one of China's three core automotive groups, has been doing nothing in the production of economical cars. FAW took advantage of the Xiali platform to completely integrate the low-end kiosk market. The acquisition of Tianjin Xiali is equivalent to building an economical car directly in Tianjin. The factory not only supplements FAW with Jiajiao, which may develop the most promising product line in the future, but also avoids duplicate construction and saves construction funds. This merger has brought a powerful impact on other economic car manufacturers.

More importantly, this acquisition has won the qualification of cooperation with Tianqi former partner Toyota and has built a bridge between FAW and Toyota. Shortly thereafter, on August 29, 2002, FAW and Toyota signed a framework agreement for strategic cooperation. The joint venture between FAW and Toyota marks a breakthrough in the strong combination of the largest auto makers in China and Japan, and it also made a significant turn for the late Toyota Motor Corporation's Chinese market development strategy. For FAW, it has found Toyota, the world's giant, as a joint venture partner, laying a solid foundation for its industry's layout and competitiveness.

The subsequent success of FAW Toyota verified the correctness of the original joint venture strategy with Tianqi and Toyota. FAW, Tianqi, and Toyota have all achieved strategic successes in these mergers and acquisitions.

SAIC: Broad M&A Multiple layouts

Event: On October 13, 2002, SAIC announced that it had purchased a 10% stake in GM Daewoo for US$59.7 million.

In December 2002, SAIC and GM jointly acquired Shandong Yantai Body Co., Ltd. and established Shanghai GM Dongyue Automobile Co., Ltd.

On November 8, 2002, GM-China SAIC Group invested in Liuzhou Wuling and established SAIC-GM-Wuling Automotive Co., Ltd., which became GM's current mini vehicle base in China.

On February 26, 2004, SAIC, GM and Shanghai GM jointly reorganized Shenyang Jinbei GM. SAIC and GM China each had a 25% stake and Shanghai GM held a 50% stake. This is the third Shanghai GM. Vehicle production base.

On October 28th, 2004, Chaoxing Bank, the representative of SAIC Motor Corporation and Korea Ssangyong Motor Company's creditor's committee, signed the final sales contract in Seoul. SAIC Motor officially acquired 48.92% of the equity of Ssangyong Motor for US$500 million and became the largest shareholder of Ssangyong. This is the largest overseas M&A operation by Chinese auto companies at that time.

On June 2, 2005, SAIC-GM-Wuling officially signed an agreement with Suizhong (Qingdao) Transportation Vehicle Manufacturing Co., Ltd. to wholly acquire Qingdao SZ Automotive, and Qingdao Suizhong was renamed SAIC-GM-Wuling Qingdao Branch. The new company will become Wuling. New production base.

On December 16, 2005, SAIC and Iveco and Chongqing Heavy Duty Truck signed a strategic cooperation framework agreement in Chongqing. According to the agreement, the three parties will cooperate to reorganize Chongqing Hongyan Co., Ltd. to jointly develop heavy-duty trucks and engines.

Comments: SAIC Group has been unusually active in mergers and acquisitions and restructurings. Through the operation of international capital, a series of moves abroad at home has been dazzling and dizzying.

SAIC Motor was once the only company in the three major groups to use passenger cars, but now SAIC has rapidly expanded into commercial vehicles through mergers and acquisitions and other means. Acquisition of Ssangyong, acquisition of Qingdao Suizhong, reorganization of Jiangsu Yizheng, Liuzhou Wuling, and Jinbei GM. SAIC is gradually becoming a car manufacturer of all series of cars, trucks, passenger cars, etc., allowing SAIC to change its current over-reliance on cars in its product mix. The disadvantages of the product, build a more diversified product structure.

SAIC's mergers and acquisitions mainly reflected SAIC Motor's "Eleventh Five-Year Plan" strategy for the simultaneous adoption of passenger vehicles and commercial vehicles, ie, to achieve a "big one" strategy. "Big" mainly refers to the overall development of commercial vehicles. Heavy trucks as an important development strategy, bigger and stronger, to make up for the lack of commercial vehicles in the past, SAIC, the development of commercial vehicles, indicating that SAIC's "integrated global resources bigger and stronger" model will be applied to commercial vehicles In the field, it will push the heavy-duty truck industry to a new level with advanced technology and excellent management.

The expansion of the entire vehicle, especially the production capacity of mini vehicles, is another strategy for SAIC. With the continuous increase in energy pressure, the mini-vehicle market is becoming a major highlight of the domestic automotive market, and it has also become a new growth point for SAIC Motor. SAIC Motor Co., Ltd. acquired SAIC (Qingdao) Transportation Vehicle Manufacturing Co., Ltd. as an opportunity to establish a micro-vehicle production base exclusively for the northern market in Shanghai. The mini vehicle production is expected to rise from the second place in the country to the first place in the next few years.

Through these complicated mergers and acquisitions, SAIC has become China's most competitive automobile manufacturer, and SAIC has formed a complete industrial chain advantage from automotive R&D, vehicle production, parts supply to automobile service trade. In order to use its own strength as a fulcrum, it has laid a solid foundation for promoting the Chinese automobile industry to enter the international stage and participate in international competition.

Dongfeng: Joint venture taking into account domestic mergers and acquisitions

Event: On March 18, 2005, Dongfeng Motor Co., Ltd. spent a large sum of 352 million yuan to acquire 51% of Zhengzhou Nissan’s shares. Dongfeng Motor Co., Ltd. is a joint-venture company with a total investment of more than 17 billion yuan. Nissan Motor Co., Ltd. has a 50% stake in each company. This is Nissan Motor's largest investment project in the world.

The transfer of the acquisition of Zhengzhou Nissan’s shares resulted in the strategic integration of Nissan’s business in China, as well as the full cooperation with Dongfeng Motors from middle to high-end passenger cars, heavy trucks, light trucks, and mid- to high-end pickup trucks.

Comments: The industry believes that the acquisition of Zhengzhou Nissan is just a microcosm of Dongfeng’s integration of existing resources and strategic planning. In the words of Miao Wei, general manager of Dongfeng Motor Corporation at that time, Dongfeng was limited to the Chinese automobile manufacturing industry as of that time. The joint venture involved the most extensive, largest and most thorough cooperation. The two parties agreed that Nissan had only one joint venture in China. Under this consensus, the integration of Zhengzhou Nissan into Dongfeng Nissan has become inevitable, especially after the limited formal operation of Dongfeng. Restructuring is a matter of course.

Therefore, it can be seen that the acquisition of Zhengzhou Nissan can be understood as an adjustment of Nissan’s model of a model in China. Zhengzhou Nissan is a subsidiary of Dongfeng, focusing on the blanks of Dongfeng Limited SUVs and high-end pickup trucks.

As the most joint venture company with the largest number of joint ventures in China, Dongfeng Motor has made great progress in recent years. The sustained growth of commercial vehicles and passenger vehicles can be described as an example in the industry. All this shows that Dongfeng Motors has actively formed a joint venture to restructure its mergers and acquisitions. The effect.

Chang'an: Reorganization of Jiangling ranked third

Event: On October 30, 2004, Jiangling Group and Changan Automobile each issued an announcement that the two sides will each contribute 50 million yuan to establish Jiangling Holdings Co., Ltd. On December 6, the two parties issued an announcement again. Changan Automobile increased its capital by Jiangling Holdings with a cash flow of 450 million yuan, and Jiangling Group also used its shares in Jiangling Motors and some of its debts for a price of 450 million yuan to invest in Jiangling Holdings. Among the newly established Jiangling Holdings, Jiangling Group and Changan Automobile each hold 50% of the shares.

Comments: No one will doubt the role played by Ford in this reorganization, because JMC and Changan are all Ford's cooperative enterprises. The difference is that Jiangling has introduced the Ford Transit Commercial Vehicle and it directly holds the Jiangling Motors 29.96 by Ford. % of equity. Chang'an Automobile is a joint venture of Ford, and each of them owns a 50% stake in Changan Ford, a subsidiary of Changan Automobile, to produce passenger cars.

Industry analysts believe that although Ford only holds 29.96% equity of Jiangling Motors, Jiangling’s senior management level is mainly driven by Ford. Therefore, the establishment of Jiangling Holdings marks Jiangling’s cooperation with Chang’an and marks the Ford’s Yangtze River’s territory. The final pen down.

Chairman Chang'an Automobile and Jiangling Holdings Chairman Yin Jiaxu once said at the opening ceremony of Jiangling Holdings, which was established on May 29, 2005: “Changan and JMC are both leaders in the domestic automotive industry. Both sides have the same cultural background and fine traditions. The desire to promote and advance the Chinese auto industry has enabled the two sides to achieve strategic alliances and complement each other. Jiangling Holdings, which is established on a new platform, will also have a broader space for development."

According to industry insiders, since Changan Group's 2004 sales have already ranked third in the country, Changan and JMC have established a Changan-JMCA-Ford strategic alliance community with capital ties based on the common background of cooperation with Ford. For Jiangling Group, the dream of “making a car” is not far off.

AviChina: Leading Integration of Hafei and Changhe

Event: On November 23, 2005, a brief ceremony was held at the China Aviation Technology Building in Beijing to announce: China Aviation Science and Technology Industrial Co., Ltd. (abbreviated as China Aviation Engineering) was determined to integrate Hafei Automobile and Changhe Automobile.

Comments: Although the integration of the two parties has not yet achieved final success, the national strategic layout of AviChina’s auto industry has also basically taken shape: Hafei in Heilongjiang in the north, Shandong Panther in integration not long ago, and Changhe in Jiangxi and Jiangxi. South to Shenzhen, Guangdong, and formed a complete chain from components and engines to complete vehicle production.

The recent development of Hafei, the central player of this integration, has attracted attention and its profitability has been better than that of Changhe Automobile. Although Hafei's grand strategy of moving toward the country and facing the world has started, it is reported that mini vehicles and vehicles were built in Weihai and Shenzhen respectively. The new car production base, however, the integration of Hafei and Changhe under the guidance of the China Aviation Science and Technology Corporation has brought a strange voice from the very beginning.

According to people familiar with the matter, AviChina Technology Co., Ltd. is a company that relies on strong competition and hard work. Its real entities are in several companies under its control, and the independence of these companies is also very strong. They simply can not completely control, "Changhe and Hafei merger, even if the complex interests of the merger, it is difficult to sort out." Informed person analysis.

According to reports, after Changhe and Hafei decided to integrate, they only proposed an integration plan, but they have not been integrated in concrete plans. Moreover, the unification of the six aspects of procurement, sales, and development identified by both parties in November last year have not been realized. In addition, Suzuki relocated its partner Changhe.

Nanqi: unexpected acquisition of Rover

Event: On July 23, 2005, Nanjing Automobile Group acquired MG Rover with over 50 million pounds in huge sums to successfully sign the contract. According to the contract, NAC will deliver the large amount of self-raised purchase money to MG Rover on the 28th of the same month. In the case of PricewaterhouseCoopers, Nanhua will then use Rover’s tangible assets and will produce its own branded cars on the platform as early as one year later.

Comments: Nanjing Automobile unexpectedly acquired the British MG Rover, from the very beginning a buzz - SAIC's circuitous tactics, NAC can conquer funds, digestion and many other issues have been scolded by the media.

However, these problems are indeed a hurdle in front of Nanjing Auto, especially in terms of digestion. It is reported that most of the Rover's models are obsolete, require continuous research and development capabilities, and require strong funds to ensure the smooth operation of the entire project. However, Nanhua's glory is no longer, and the continuous loss makes it difficult to solve the problems of funds and talents.

Since the acquisition of Rover, Nanjing Automobile has maintained a low-key silence. However, it has been reported that the Nangang MG Rover base in Nanjing High-tech Development Zone has been laid low-key and is expected to be completed in 2006. It plans to launch two models based on Rover in 2007. The mid-to-high-class cars built on the 75 platform and the work of the “Nanjing MG Motor Company” (internal 556 project team) have been fully started. At the same time, FAW and Nanjing Steam have also been in close contact to negotiate information on equity cooperation.

Regardless of whether Nanjing Automobile can successfully operate on the Rover car project in the future, it will still be the focus of attention because it involves many unfavorable factors.

Weichai: Spending huge sums to acquire the torch

Event: On August 8, 2005, Weichai Power invested RMB 1.023 billion in the acquisition of the Hunan Torch as the largest shareholder, which held 28.12% of the total share capital. This case became China’s largest public bidding capital merger and acquisition case. Weichai will borrow The potential to integrate the Hunan Torch's Shaanxi Zhongqi, Fast Gear and other advantageous assets.

Comments: Weichai was higher than the opponent's 200 million yuan in huge acquisitions. Its purpose is to integrate heavy truck industry resources, extend the industrial chain, enhance its competitiveness in the heavy truck components industry, so as to achieve product diversification and enhance international technology cooperation. ability.

Because Weichai Power accounted for more than 78% of the heavy truck engine market share of 15 tons and above, while Shaanxi Fast Holding, which is under the Hunan Torch Group, accounted for 90% of the heavy truck transmission market share of 15 tons and above, Weichai Power reorganized the Hunan Torch. Assets can extend the industrial chain and take a leading position in China's heavy truck component industry.

Everything seemed perfect, but Weichai's acquisition was taken on the premise that its parent company and its largest customer, China National Heavy Duty Truck, was near to rupture, and its impact on it will become increasingly apparent. Due to the fact that the cooperation with Cummins, etc. and the cooperation with Weichai was greatly affected, Weichai itself faced with many factors such as the capital chain. Whether it is possible to control the integration of Shaanxi Automobile as it wishes is a big question. (He Dajun)