For Shanxi Province, which lacks resources for the development of the automobile industry, August 8th is a big day that many people have long been waiting for.
At 11 am on that day, in Jinyuan Hotel Taiyuan, Jiangling Motors officially entered into an agreement with China Chang'an Group and China Corps of Warriors to wholly acquire Taiyuan Heavy Duty Truck at a price of RMB 270 million.
This is the second time that Taiyuan Heavy Duty Truck has been traded. In November 2007, also in Taiyuan Jinci Hotel, the Taiyuan Municipal Government signed an equity transfer agreement with South China Automotive, transferring the ownership of Taiyuan Heavy Duty Truck to the South China Auto (Changan Automobile Group) at a price of RMB 10.18 million. Predecessor).
"In the beginning, Chang'an took over Taiyuan Heavy Industries and Steel's idea to fill the shortboard of heavy trucks. However, due to its lack of heavy truck technology and other reasons, Taiyuan Shouqi has become Chang'an's burden." Chang'an, China According to sources, “The sale of Taiyuan Heavy Duty Truck to JMC is also a relationship between Fushun Changan and its joint venture partners. From the transaction price point of view, Chang’an’s buying price was RMB 10.18 million and the selling price is now RMB 270 million. This transaction Changan does not lose."
Two-degree change
At 11 am on August 8th, a low-key signing ceremony was in progress at the Jinyuan Hotel in Taiyuan.
In this ceremony, Jiangling Motor Co., Ltd., which has been pursuing steady growth, has recently merged and reorganized the company with RMB 270 million across the region after spending RMB 500 million to restructure Huaxiang Fuqi in Jiangxi Province.
This means that Taiyuan Heavy Duty Truck will later appear as a wholly-owned subsidiary of Jiangling Motors, and according to information disclosed by Jiangling Motors, the acquisition has also received the full support of its foreign shareholder, Ford Motor.
With the rich experience and strong technical capabilities of Ford in the heavy-duty field, Jiangling hopes that in the next few years, the goal of the new Taiyuan Heavy Duty Truck is to create a production capacity of 50,000 heavy trucks and 50,000 engines. This target has already shrunk by nearly half since 2007 when Taiyuan Heavy Duty Truck was acquired by Changan Group.
In 2007, for the first time, Taiyuan Heavy Duty Trucks Changan Automobile Group (Changan Automobile Group and China Bingzhuang Group respectively held 80% and 20% of the company's shares) in Changan Automobile Group set the development target of selling more than 15,000 vehicles in 3 years. With sales revenue exceeding RMB 3 billion, it has entered the top 10 in the industry. By 2015, the company will complete a total investment of RMB 7 billion to RMB 8 billion, form a production and sales capacity of over 100,000 vehicles, account for more than 15% of the domestic heavy truck market, and achieve sales revenue of more than RMB 26 billion.
“At that time, there were two main reasons for Changan Heavy-Duron to set up in Taiyuan,†said Tian Min, former general manager of Chang’an Heavy Duty Trucks. First, local demand in Shanxi Province, Shanxi as a resource-rich province, the coal industry is a pillar industry, domestic needs A large dump truck, special-purpose vehicles and other heavy-duty vehicle bases are in great demand. Second, the former Shanxi Provincial Automobile Industry Group is a veteran state-owned enterprise. Losses all year round have become a burden on the country, and the Chang'an Auto Group itself has to do Bigger and stronger, lacking a platform. Although Changan Automobile has more than 20 vehicle fleets in the country, its product lineage is not very complete. "As a result, the completion of Chang'an Heavy Duty Truck is the common need of both parties."
“However, the intensely competitive heavy-duty truck market did not provide opportunities for Chang’an Heavy Duty Truck. Under the encirclement of a batch of medium and heavy-duty commercial vehicle companies such as CNHTC, Shaanxi Auto and Dongfeng, the product line has not been perfected and the sales network has not been fully rolled out. It is difficult for Changan Heavy-Duty, which has accumulated technology, to gain a firm foothold in a short period of time, so our performance has been losing money.†Taiyuan's internal employees do not want to talk about that period of history.
After Chang'an took over Taiyuan Heavy Duty Truck, in 2009, Changan Heavy Duty Truck sold only 1,618 vehicles for the whole year, with a total profit of -39.81 million yuan. In the first half of 2010, the company's total profit was still negative, and its model sales increased slightly to 1,766 units. From 2011 to 2011, sales of Changan Heavy Duty Truck were only over 3,000 vehicles, which was far from the annual sales of the heavy truck industry in the top ten.
“In this case, the joint venture and cooperation will almost become the only way for Chang'an to rescue Taiyuan Shouqi,†said an insider in Chang'an.
Ford intervention
After establishing a development path for joint ventures and cooperation for Taiyuan CNHTC, Changan Automobile Group has successively organized a number of foreign automobile companies to inspect Taiyuan Zhongqi. Including Japan's Mitsubishi Fuso Truck and Bus Co., Ltd., the United States Peka Corporation, Tata Daewoo Commercial Vehicle Company. "However, for a variety of reasons, none of these cooperation will be described below."
The turning point for things happened in 2010. "At the time, Ford was working out its 1515 plan for the Chinese market. To accelerate the pace of development in the Chinese market, Ford began to discuss with Changan the possibility of cooperation in the field of heavy truck." Chang said the insider said.
At that time, there was such a news that was worthy of attention on the official website of Taiyuan Heavy Duty Truck. According to the news, “July 15, the president of Ford Motor Co., Ltd.’s Asia Pacific and Africa regional business analysis, Yu Jiajia, and vice president of Jiangling Motors Co., Ltd. Zhu Shuixing. Yu Qin, Senior Manager of Jiangling Motors Co., Ltd. and Xie Guangxi, Deputy Director of Chongqing Chang'an Automobile Co., Ltd., visited the stamping, frame, and assembly shop of Changan Heavy Duty Truck and listened to the general manager and general manager of the company. A detailed introduction to strategy, product, quality, procurement, manufacturing, sales, etc., and exchanged and discussed relevant issues with company leaders.â€
The negotiations between Ford and Changan lasted for a year or so. In 2011, the two parties reached a cooperation intention. “At that time, Chang’an and Ford’s original intention was to take over Taiyuan Zhongqi with a 5050 traditional joint venture and introduce technology and products. The way the Ford heavy truck type was introduced to the Chinese market." A source said.
However, this cooperation intention was met with strong opposition from Jiangling. According to media reports, Jiangling Motors withdrew its business unit established to cooperate with Ford on heavy trucks when both parties stated their intentions for cooperation. Jiang Ling, with a hard-line attitude, believes that Ford’s move violated the original willingness to cooperate. Previously, Ford’s plans for the Chinese market were: cooperation with Changan on passenger vehicles and cooperation with Jiangling on commercial vehicles. For the heavy truck business, JMC has also been ambitious.
Since it could not bypass Jiangling, more than a year later, Changan and Ford decided to launch a heavy-duty truck business through a company that holds both shares of Jiangling Motors (JMC's controlling shareholders are Jiangling Holdings and Ford Motor, while Changan Automobile Group indirectly controls Jiangling Holdings. 50% equity). Industry insiders believe that Chang'an Group has "successfully" found two helpers for the continuous loss of heavy truck business - Jiangling's channel, Ford's models and technology.
Is the golden triangle weak or weak?
“In fact, letting Ford and JMC to take over Taiyuan Heavy Duty Truck is, for Chang’an, an internal optimization and redistribution of resources. Ford is currently one of the most important partners of Chang’an, Chang’an holds a stake in JMC, Ford. By entering the Chinese heavy truck field through the way of Jiangling, we can also avoid government approvals for new joint venture projects.†The above-mentioned Changan insider said: “In this way, Changan will become the main joint venture partner of Ford in the field of passenger vehicles. On the other hand, Ford will rely mainly on JMC, and the cooperation between the three parties will be more clear. This is also more in line with the three-party plan for the Golden Triangle at that time."
According to its analysis, in recent years, Ford has implemented aggressive expansion projects in the area of ​​passenger cars and new energy vehicles in China, mainly relying on the Changan Ford joint venture. Jiangling Motors has been positioned by Ford as a carrier for commercial vehicles. The introduction of heavy truck projects will undoubtedly enable Ford to complete a more complete product strategy and market tactical layout in China.
For the future development of Taiyuan's heavy-duty trucks, Jiangling president Chen Yuanqing also stated that current commercial vehicles, especially the heavy-duty truck industry, have shown negative growth, but China’s long-term infrastructure construction and economic growth will make demand for heavy-duty truck products rise steadily, and its total volume and development potential The entrants and dominant companies still have enough attractiveness.
However, despite the fact that the parties are confident in this transaction, Jiangling Motors is a pure newcomer in the field of heavy trucks, and China’s lead Chang’an and Ford vehicles also do not have a clear advantage in the heavy truck field. Therefore, since the announcement of the specific plan for the purchase of Taiyuan Heavy Duty Truck, most Jiangling Motors investors have chosen to vote with their feet. Data from the capital market shows that throughout July and August, Jiangling Motors' share price was in a state of overcast.
Among them, "the loss situation of Taiyuan Changan Heavy Duty Truck and the overall downturn in the heavy truck industry have increased the market's worries about Jiangling's performance and formed a bad at this stage." Yang Zaijun, an expert in the automotive industry, said.
Data shows that heavy-duty listed companies are facing a decline in performance brought about by the industry downturn this year. From the published financial reports, in the first half of this year, the net profit of China National Heavy Duty Truck, Weichai Power, Hualing Xingma and other companies all experienced a decline of about 50%. In the first half of the heavy truck industry, Foton Motor's production and sales of heavy trucks also fell 31.4% and 28.0% year-on-year.
In this regard, China Merchants Securities's research report also shows that taking into account this year's heavy truck market is still sluggish, it is expected that Taiyuan Heavy Duty Truck's 2012 annual loss of more than 50 million yuan, the negative impact on Jiangling Motors' profit is expected to be between 2% -3%.
However, for Taiyuan Shougang, the new historical picture has already begun. Will Jiangling and Ford's combination lead it out of the quagmire of losses? The newspaper will maintain continuous observation. Hopefully, Taiyuan Heavy Duty Truck will not be changed hands for the third time.
Reporter's notes
In the afternoon of August 8, the Taiyuan Heavy Industries & Steel Plant located in the Taiyuan Economic Development Zone did not expect the kind of festive atmosphere in which the signing ceremony had just gone through. At the deserted factory gate, only sporadic employees were able to enter and exit. The machine of the production line seems to be infected by this kind of atmosphere and still maintains silence.
This is the state of production of Taiyuan CNHTC. Due to the extremely low sales volume, the company is waiting for the rescuer, Jiangling Motors and Ford Motors, to enter the game in a state of “abandonmentâ€.
It is worth noting that this is the second time that Taiyuan Heavy Duty Truck has been changed hands. In these two transfers, Taiyuan Shouqi's worth is very different. In 2007, the Changan Automobile's access price was 10.18 million yuan, but in 2012, Taiyuan Heavy Duty Truck's worth has soared to 2.7 billion, Changan's return on investment as high as 2700%. And hidden behind it is the price of "shell resources" for car production.
"In fact, the Jiangxi Provincial Government has always disagreed that Jiangling had gone too far to build a car. It hoped that Jiangling could jointly develop Ford in the province." An informed source said: "But in the end, Ford and Jiangling can The result of reaching compromises with Changan three parties is also related to the shell resources."
According to its introduction, due to the dream of manufacturing heavy trucks, Jiangling had previously made various applications or search for production catalogs in Jiangxi Province, but they all failed. “In desperation, under the promotion of the Shanxi Provincial Government and the decentralization of the Jiangxi Provincial Government, the transaction between Chang’an and Jiangling was finally achieved. Moreover, by doing so, the government approval process for Ford’s entry can be eliminated.â€
Public information shows that despite the slowdown in the growth of the Chinese auto market in the past two years, automakers are still optimistic about the future prospects and are setting off a new round of investment expansion.
However, contrary to the enthusiasm of capital expansion, the country is increasingly rigorous in its approval of vehicle production. In 2009, the Ministry of Industry and Information Technology issued the "Circular on Strengthening the Filing Management of Investment Projects for Automobile Production Enterprises." The "Notice" clearly stated that the establishment of a branch factory in an off-site vehicle manufacturing company must be carried out on the basis of annexing existing automobile production enterprises.
This means that projects for auto companies to build factories through remote enclosures will no longer be approved in the future. In the case of limited production license approval, “backdoor†has become a frustrating choice for companies, and the price of “shell resources†has begun to rise.
A 27-fold premium was used to get rid of a burden of consecutive year losses, and an inflow of more than 200 million yuan was received. Changan Automobile Group did a good deal.
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Taiyuan Heavy Duty Truck is an integrated heavy-vehicle manufacturer integrating R&D, production and sales. The main products include various types of high-, medium- and low-grade dump trucks, tractors, gas vehicles, and special vehicles. Its predecessor was Shanxi Province Automobile Industry Group Co., Ltd., which was restructured at a price of 10.18 million yuan in 2007. Changan has established a wholly-owned subsidiary Taiyuan Chang'an Heavy Duty Truck on this basis. In August 2012, Jiangling Motors, China Chang'an Group and China Corps Group purchased Taiyuan Zhongqi at a price of RMB 270 million.
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