Changhe Automobile was revived or reorganized for the second time

After four years of "marrying" with China Chang'an, Changhe Automobile is about to resume "singleness."

A few days ago, media reports said that the relevant leaders of the Jiangxi Provincial Government clearly stated at the 7th (enlarged) meeting of the thirteenth session of the CPC Jiangxi Provincial Committee that companies such as Changhe Automobile were encouraged to implement mergers and reorganizations. Later, it was reported that China Chang'an has reached an agreement with the Jiangxi provincial government to relocate the Chang'an system from the Jingdezhen base and the Jiujiang base in Changhe Automobile by restructuring or other means. The Hefei base, which is affiliated with Changhe Auto, was placed under Chang'an.

However, Changhe's "single love song" may not be able to sing for long. According to the reporter's understanding, with the vigorous promotion of the Jiangxi Provincial Government, Jiangling Motors, currently located in Jiangxi Province with Changhe Automobile, is in close contact with Changhe Auto.

After Changhe Automobile was acquired by China Changan in November 2009, Changhe Automobile, which has experienced “marriage arrangements” for the past four years, may now be living a new life. However, given the increasingly fierce market competition, can Changhe Automotive be reborn after the second reorganization?

Secondary reorganization

“It is not yet time to say this thing (indicating that Changhe Automobile has separated from Chang'an to pursue a second reorganization).” On August 6, a high-level person in Changan, China, who declined to be named, said in an interview with reporters: “The specific situation is not easy to say. , but China Chang'an will respect the wishes of the company.” And Wang Shuhong, head of the PR agency of Changhe Automobile, declined the reporter’s interview on the ground that “there was high temperature leave and the specific circumstances were not clear”.

However, all mysteries may be announced in the near future. Informed sources told the reporter that with the strong intervention of the Jiangxi provincial government, negotiations between China Chang'an and Jiangxi Province on Changhe Automobile are drawing to a close. Not long ago, the Governor of Jiangxi Province Lu Xinshe was in the thirteenth session of the CPC Jiangxi Provincial Committee (enlarged. The meeting clearly stated that Changhe Automobile and other companies were encouraged to merge and reorganize.

The industry believes that the main government officials delivered speeches to promote the reorganization of central SOEs. This is rare in the history of the Chinese automobile industry. Behind the promotion of Lu Xinshe’s actions, it is actually local governments that Performance concerns and the irreconcilable manifestation of the conflict between Changhe Automotive and its parent company, Changan, China.

“Obviously, Jiangxi Province is very concerned that the stagnation of Changhe Automobile will drag the auto industry of Jiangxi Province behind, and the local government is still worried that it will lead to mass incidents again.” The industry insiders said. The automotive industry is one of the pillar industries in Jiangxi Province. In 2012, the Jiangxi automobile industry accounted for 20% of the industrial output value of the above-scale industries in Jiangxi Province. It played a decisive role in Jiangxi, a post-tribal area where strength is not strong.

However, the Chang River shutdown incident that began in January 2012 casts a shadow over the future development of Changhe Automotive. In November 2009, Hafei, Changhe and other formerly owned car assets of China National Aviation Group were all allocated to China Chang'an. Under the leadership of Xu Liuping, Chairman of China Changan Automobile, he began a difficult restructuring. Later, China Chang'an prepared to merge Changhe Suzuki and Changan Suzuki under Changhe Automobile's subsidiary, and Changhe Suzuki's production qualification was transferred to Changan Mazda. In January 2012, the plan had been approved by the National Development and Reform Commission. However, at the time when the approval document was not issued, it was met with criticism from Jiangxi Provincial Government and Changhe Automobile. Changhe Automobile also used stoppages to protest the transfer of production qualifications. One thing. This matter eventually came to an end, but at the same time, the relationship between China Chang'an and Changhe Automobile began to deteriorate rapidly. Chang'an, China's Changan Automobile, resigned from the management of Changhe Automobile, and Changhe Automobile began to be autonomous.

In the autonomous state, China Chang'an also stopped investing in Changhe's automotive products and capital, which directly led to Changhe's sales target of 200,000 vehicles in 2012, which ultimately achieved only 50%. In the first half of this year, Changhe Automobile sales fell again. Among them, Changhe Suzuki sold 43,000 vehicles, down 1.18% year-on-year; autonomous brand sales were 11,000, down 45.49% year-on-year. "China Chang'an is currently not to give technology and models. Second, we should not give financial support. We must detach ourselves from him and look for better partners." Some media have quoted the insider of Changhe Automobile as saying.

Who will take the disk

If the contradictions between Changan and Changhe cars in China have become irreconcilable and “divorce” is a foregone conclusion, then who will become the dealer of Changhe Auto? This is the focus of current industry attention.

At present, several sources of information regard Jiangling Group as an important force in reorganizing Changhe Automotive. As the largest automobile manufacturer in Jiangxi Province, Jiangling Group has achieved considerable development in recent years. Jiangling Motors (000550.SZ), a major company under the Jiangling Group, produced 200,000 units in 2012. In the first half of 2013, its output increased by more than 7% to 111,500 units. Judging from the financial data, Jiangling Motors' net profit in 2012 was as high as 1516.9037 million yuan, even higher than the net profit performance of Changan Automobile (listed in China Changan, 000620.SZ).

At the same time as Lu Xinshe made the above statement, at the same time, he also proposed to support leading enterprises such as the Jiangling Group to speed up product upgrading and expand production scale. Obviously, at the national level, when controlling the production capacity of vehicles and setting limits for new factories, Changhe Automobile (currently Changhe Automobile owns 300,000 production capacity) that reorganizes overcapacity will be the shortcut for Jiangling Group to expand its production scale.

According to report, as soon as Changhe Automobile and China Chang'an disagreed in January last year, the Jiangxi Provincial Government planned to allow Jiangling to take over Changhe's business. However, due to the fact that Jiangling is a listed company, the complicated equity relationship has made the advancement of this matter quite slow.

In addition, people in the industry believe that the selection of Jiangling Group to participate in the reorganization of Changhe Automobile will also help ease the feelings of dissatisfaction in China's Chang’an and indirectly promote the progress of reorganization. In 2004, Jiangling Group formed a joint venture with Changan Automobile, a subsidiary of China Changan, to form Jiangling Holdings. Jiangling Holdings currently holds 41% of the equity of Jiangling Motors and is the largest shareholder of Jiangling Motors. Since the two parties have cooperated for ten years, they have maintained close relationships and have continued to cooperate on a number of projects. In July of this year, Jiangling Motors purchased the entire equity of Taiyuan Chang'an Heavy Duty Truck, a long-lost state owned by China Changan, which relieved the pressure of Chang'an in China to some extent.

However, at present, Jiangxi Province and Changan in China have not yet officially announced the "independence plan" for Changhe Automobile. Jiangling Group and Jiangling Motors related individuals also refused to respond with "uninformed" reasons when interviewed by reporters.

In addition, according to the reporter's understanding, under the impetus of the Jiangxi provincial government, Jiangxi Copper Group Co., Ltd. or as a strategic investor, will fund Changhe Automotive's “transfusion”. Jiangxi Copper is a state-owned enterprise in Jiangxi Province and is known as the richest state-owned enterprise in Jiangxi Province. Financial data show that Jiangxi Copper’s net profit in 2011 was as high as RMB 6.5 billion, and in 2012 it was RMB 5.2 billion. In recent years, Jiangxi Copper, with its large amount of funds, has begun to seek breakthroughs in other fields in addition to its main business. Li Zhihuang, who was the chairman of Jiangxi Copper and the current vice governor of Jiangxi Province, was also in Jiangling Motors in March this year. The Xiaolan base specifically listened to the reports of leaders of the Jiangxi Provincial Industrial and Commercial Committee, Jiangling Group, and Changhe Automobile. Informed sources said that with the promotion of Li Yuhuang and other Jiangxi provincial leaders, Jiangxi Copper, with its financial advantages, may play an important role as a strategic investor in the restructuring of Changhe Automotive.

While Jiangling Group and Jiangxi Copper are likely to join hands to reorganize Changhe Automobile, the media have recently stated that BAIC has also been “catching” the assets of Changhe Auto, and the acquisition of Changhe Automobile will not only bring about a breakthrough in market share for BAIC Motor. , but also to achieve its setbacks in the central region. However, as of press time, BAIC did not respond positively to this matter; some analysts claimed that the purpose of protecting the local auto industry may be difficult for Jiangxi's provincial government to accept BAIC.

Sadly

In fact, no matter what, Changhe Automobile is facing behind the "secondary restructuring" and has also reflected that China Chang'an's 4-year integration of Changhe Automobile has not been successful.

Before the formal reorganization of Hafei and Changhe in November 2009, Xu Liuping, chairman of China Changan, had been worried that the reorganization would have a negative impact on the development of Changan Automobile. When he was interviewed by reporters, he said: “The pace is too fast and it is easy to Brand damage."

However, at the national level, the “Lang-Lang” type of restructuring model, the Chinese Armed Forces Group (parent company of China Chang'an) and China National Aviation Group (the original parent company of Hafei and Changhe) still got their hands together, and China’s Chang’an also eventually Was involved in a reorganization battle. After a rush of reorganization, Changan in China discovered that the reorganization of Hafei and Changhe was far more difficult than expected.

According to Zou Wenchao, president of Chang'an Group, after the reorganization and integration of Hafei and Changhe, Chang’an found that the two before the reorganization of the two countries need to carry out a total of 2.50 billion in potential losses. In the face of serious losses Changhe and Hafei, Chang’an can only desperately True gold and silver are supported. It is reported that as of now, Changan has provided 2 billion yuan in direct loans and 4.4 billion yuan in loan guarantees to Hafei and Changhe.

However, from the actual operational effects, due to the long front, the slow launch of new products and other irreconcilable contradictions, the performance of Hafei and Changhe has been difficult to improve.

According to the relevant announcement, as of the end of 2012, Hafei Automobile had total assets of 3.023 billion yuan and net assets of -46.11 billion yuan. In 2012, Hafei Automobile realized sales revenue of 2.68 billion yuan and net profit of 760 million yuan. However, the production and sales volume of Changhe Automobile has not been effectively improved. In 2012, the production and sales volume of Changhe Automobile was only 110,000, which was far below the sales expectation of 200,000 units for the year and even lower than the 160,000 units in 2009.

The days of Hafei and Changhe are not easy. China Changan also showed signs of fatigue in sales competitions with SAIC, FAW, and Dongfeng. According to the data, on the sales ranking of China National Automobile Group, China Changan sold only 35,000 fewer vehicles than Dongfeng Automobile in the third place in 2009, and by 2012, the gap between China Changan and the top three was growing bigger and bigger. The three FAW Group had nearly 700,000 vehicles.

House seemingly endless rain. The suspension of the Chang River in January 2012 caused Xu Liuping’s efforts to integrate the resources of China’s Chang’an to be burned. At this year's conference, Xu Liuping, who suffered greatly, said with deep feeling: "In the future, China Chang'an must be rational and must develop scientifically." Perhaps, in response to the promotion of Jiangxi Province and the strong appeal of Changhe Automobile, restructuring frustrated China Changan can remove the burden of "bearing heavy burdens" in the "respect for business will" mentality.

Future prospects

Now, although it is still unclear who will reorganize Changhe Automobile, it is difficult for new arrivals to re-enter Chang'an Automobile's ascending route after Changan has taken off the burden.

Changhe Suzuki plays a key role in the Changhe Automotive System, and the Sohu Automobile Database shows that in 2012, Changhe Suzuki and Changhe brand sales were 83,400 and 30,000, respectively. At the Changhe Automotive Business Conference held in January 2013, Tong Zhengrong, general manager of Changhe Automotive, stressed that Changhe Automotive needs to further promote joint ventures with Suzuki, and fully leverage on achieving better development.

However, Suzuki's attitude suddenly changed. Recently, an insider of Changan Suzuki revealed to reporters that Suzuki will no longer invest new products in Changhe Suzuki; and relevant people in China Changan also stressed that Suzuki can no longer invest in Changhe cars in the future.

In fact, Suzuki has long considered the withdrawal of Changhe Suzuki. Due to the sluggish development of Changhe Suzuki in recent years, Suzuki, Japan's Suzuki, has gradually determined that Changan Suzuki (51% of Changan Automobile and 49% of Suzuki) will be the focus of investment. "Especially in the context of Changhe Automobile's imminent departure from China's Chang'an, Suzuki Motor Co., Ltd., which is based in China with Chang'an as its key joint venture, apparently has difficulty in investing too much effort in Changhe Suzuki," said a car analyst.

If Suzuki’s support is lost, one can imagine how difficult it will be to develop the next Changhe car; at the same time, this will also be a major challenge for the matchmaker.

The JMC Group has been expanding its business vehicles in the field of commercial vehicles and has lacked experience in the field of cars and micro-vehicles and product R&D capabilities. Jiangling Group has cooperated with Changan Automobile to carry out the expansion of the sedan field. However, several models imported from Changan Automobile have been suspended successively. Obviously, in the absence of its own car products, Jiangling Group, how to use Changhe Automobile to achieve breakthrough in the field of cars, but also to put a big question mark.

In the absence of products, Jiangling Group may only seek help from Ford. Ford Motor Co., Ltd. is the second largest shareholder of Jiangling Motors and provides Jiangling Motors with SUV products. However, Ford Motor has established three factories in Chongqing in recent years. The Hangzhou factory is also under construction. Industry insiders believe that Ford is hardly able to support Changhe Auto if these factories are "waiting for food".

“China’s Chang’an has suffered a major loss in reorganizing Changhe Automobile. After leaving Chang’an in China, the future of Changhe Automobile is not clear. In the era of strong Chinese automaker Hengqiang, the chances of survival of backward companies will be getting smaller and smaller. "Jia Xinguang, a well-known automotive analyst, said.

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