Domestic car companies urgently need to crack the joint venture "curse"

Recently, after the statement that Chery and Subaru failed to pass the approval of the National Development and Reform Commission, Chery and Jaguar Land Rover have waited for the review. In addition, according to "American Automotive News" report, Jeep brand CEO Mike Manley hopes to negotiate a deal with Chinese auto companies in the near future, so that Jeep models can be produced locally in China. To this end, Manley specifically went to China to meet with the Guangzhou Automobile Group, which has a joint venture with Fiat.

With China becoming the world’s largest auto consumption market, overseas car companies can no longer resist the temptation of this huge market. Some transnational giants who once lost interest in the Chinese market have come back and regained their joint venture strategy. However, after the overwhelming majority of internationally renowned auto giants have joined hands with domestic car companies, does the Chinese market still require urgent joint ventures? In particular, is it necessary or not to have a joint venture with a brand whose weight is not sufficient? Worth thinking.

“In the past two years, the government has only made some adjustments to the automobile industry policy, which has caused the market share of independent brands to rise and fall. This shows that independent brands are too dependent on the policy and have poor competitiveness.” Automotive analysts Jia Xinguang believes that the Chinese auto industry has experienced a joint venture for nearly 30 years, but the joint venture did not exchange technology, but it made the development of domestic independent brands difficult. Therefore, following the joint venture this topic, domestic car prices should be cautious. "The joint venture is like a curse, and domestic car companies should not blindly invest in it," Jia Xinguang said.

Crazy joint venture boom again At present, Jeep brand models are sold through imports in China. Jeep brand CEO Mike Manley believes that guides, freelancers, and Wranglers, as well as an underdeveloped guide and a free-form SUV, are obviously suitable for domestic production in China. The SUV is currently being built on a front-wheel-drive Fiat model and will be put into production in 2013.

Jeep brand is just a microcosm of China's joint venture. After the development in recent years, the Chinese market has become a “blessed land” that multinational car companies increasingly rely on. In 2003, only the VW’s production of a joint venture in China accounted for more than 10% of its total global output. Other multinational companies did not exceed 4% in the same proportion.

In the past 10 years, the automobile joint ventures have escalated, with the rapid rise of Shanghai GM, Dongfeng Nissan, GAC Toyota, and Fiat's sudden exit. After the financial crisis, a new wave of automotive joint ventures is accelerating. And these foreign giants are looking at the sales that can be greatly improved after the joint venture, and the resulting "money scene" in the Chinese auto market.

It can be said that Manley's viewpoint represents the view of many foreign car companies that have entered China and are waiting to enter China. Only through joint ventures can they achieve rapid mass production with a high tariff.

According to statistics, by the year 2000, China had established 10 vehicle joint ventures, and from 2002 to 2009, there were 229 newly-established automobile joint ventures, including 42 vehicle companies and 126 parts and components enterprises.

Enticed by the huge market, more multinational giants who once lost interest in the Chinese market began to regain the pace of joint ventures. Unlike 20 years or even 10 years ago, these multinational giants will have to face more fierce competition and show that they are likely to gain a firm foothold in China.

The new joint venture revealed that the multinational auto giants are in a hurry. This year, PSA Peugeot Citroën and Changan Automobile Group jointly announced that the application for the establishment of an automobile joint venture in China has been approved by the government. Each party holds a 50% stake, and the joint venture will produce environmentally friendly light commercial vehicles and passenger vehicles. .

It is reported that after Changan Automobile Group took over Hafei Automobile, Changan Automobile Group and the French Peugeot Citroën had positive negotiations and reached an agreement in a short period of six months, which is called lightning speed.

This is by no means a case. More overseas auto companies have accelerated the pace of joint ventures and have chosen the top four automotive groups in China as joint venture partners in order to squeeze on the high-speed trains in the Chinese auto market. The most typical examples are Fiat cars in Italy and Chrysler cars in the United States. They all chose GAC Group as a joint venture target.

The first to start this round of China's joint venture was the Fiat Auto Group. Zeng Qinghong, General Manager of Guangzhou Automobile Group, told the reporter that “The joint venture between GAC Group and Fiat Auto Group (Guangzhou Fiat Fiat) plans to start production in 2011 and form 300,000 units of production in 2014”.

Fiat Auto Global CEO and Chrysler CEO Malchoney also said that in the future China, India and other countries will become its global strategic focus.

The Chinese market has become a life-saving straw With the increasing desire of overseas automakers for the Chinese market, China’s top-ranked auto group has doubled its value, and many overseas auto companies have often wanted to marry a Chinese auto group.

Su Hui, an expert in the automotive industry, said that the probability of a small car company acquiring a joint venture permit in China is minimal, and it is highly probable that China's top four auto companies will be involved in China. There are two reasons why these overseas car companies set off a second wave of joint ventures. First, the Chinese market saved the lives of many multinational giants in 2009; second, China's performance has increased the global sales gap of multinational giants.

Regardless of the financial statements of major companies or interviews with senior executives, these auto giants acknowledged the “golden” role of the Chinese market. General Motors executives who were once bankrupted have more frankly stated that the performance of their Shanghai-based joint ventures, Shanghai GM and SAIC-GM-Wuling, will not only help them out of difficulties, but also help them establish confidence in picking up old rivers and rivers.

"Fiat has a strong partner in China, so I can talk to them about possibilities." Manley said, "If you can produce Jeep locally, you will see our sales increase exponentially."

According to incomplete statistics, in 2009, GM’s joint venture net profit in China exceeded RMB 7 billion, and GM’s net loss for the same period was USD 4.3 billion. Even if calculated by 50%, GM’s business in China has caused General Motors to reduce losses.

At the same time, overseas giants including Toyota Motors have to admit past mistakes. Jia Xinguang pointed out that “under the pressure of pursuing rankings and economies of scale, many overseas automobile companies have confessed their lost opportunities in China 20 years ago. The seemingly small neglect of 20 years ago has caused many global giants to decline in global rankings. ".

Statistics show that in 2010, the sales volume of the Chinese luxury car market reached 676,000, an increase of 69% year-on-year, far higher than the average growth rate of the market. Among them, Mercedes-Benz, BMW and Audi sold 542,256 vehicles, accounting for more than 80% of the total luxury car market.

The analysis of the success of German luxury cars in the Chinese auto market cannot be separated from the steady implementation of localization. At present, the German luxury brands Mercedes, BMW and Audi have imported and domestically produced two legs, while the Japanese brands Lexus, Acura, and Infiniti are completely dependent on imports.

But the market is ruthless. Localization means more models to be introduced, lower taxes, lower prices, and more convenient maintenance. The gap between sales volume caused by this strategic decision and the accumulation of brand history is superimposed. The distance between German and Japanese luxury brands is increasing.

A few years ago, the price of an entry-level model of a Mercedes-Benz or BMW was also more than 400,000 yuan. High tariffs and various policies have restricted the sales of luxury cars in China. Today, the "Germany's top three" have expanded their factories in China, and their spare parts tariffs and vehicle tariffs have also been adjusted to the lowest level. The overall price of luxury cars has been lowered. The entry-level BMW 3 Series, Mercedes-Benz New C and Audi A4L have entered the 200,000 yuan range.

"The imported luxury cars in the future will inevitably depend on localized production and procurement, otherwise there will be no price competitiveness." Jia Xinguang said.

The cost of developing a joint venture to develop a joint venture comes at a price. Experts point out that the result of the joint venture to the Chinese auto industry is that the joint-venture model quickly occupied the market and realized the qualitative transformation of the Chinese auto industry, but the Chinese auto industry did not possess core technology.

Since 2001, the development of the Chinese auto industry has begun a real "blowout." On the one hand, the explosive growth of market demand, on the one hand, is the influx of capital. Whether it is the private capital of the manufacturing industry or the investment of the dealers, they have no hesitation in investing in the automotive industry. In 2002 it was called China's "car first year." That year, Beijing's privately-purchased cars broke through 200,000 vehicles, and the private car market is in a sharp upward trend.

At that time, domestic auto companies began to realize the importance of autonomy. However, due to the strategy of domesticizing imported products, domestic auto companies abandoned the production of autonomous models. There is no basis for domestic auto companies to develop their autonomy at this time.

There is no other way, the domestic car companies had to divert their own development. Taking Beiqi as an example, in order to develop its own autonomy, in 2009, BAIC acquired some Saab assets under General Motors for US$197 million. However, Beiqi acquired only the Saab old model platform and does not include Saab's new platform technology.

SAIC Motor has also developed its autonomy through the acquisition of Rover and the integration of Nanjing Automobile Group. The launch of Roewe and MG dual-brand autonomy strategy is one of the core competitiveness of SAIC Motor, but it has also undergone many hardships.

In this regard, Jia Xinguang believes that although the old platform through the acquisition of foreign car companies can speed up the research and development speed of independent brands, but also depends on how SAIC, Beiqi to play its wisdom on limited overseas resources. "The acquisition of autonomy through development is also a frustrating move for domestic auto makers. Since all the previous efforts have been made on joint-venture vehicle companies, the development of domestic self-owned brands has fallen far behind," said Jia Xinguang.

However, the government seems to be aware of the negative significance of excessive foreign car companies entering into domestic joint ventures and is also minimizing the number of joint ventures.

Previously, it was reported that the current Chinese government has apparently had concerns about the overcapacity of the auto industry, and gradually tended to prevent overseas automakers from expanding their production capacity into China. The joint venture between Jaguar Land Rover and Chery is likely to be met with cold shoulders at the Development and Reform Commission, and it will follow Subaru's fate.

In contrast, PSA paid for the provision of part of the technology and passed the approval of the National Development and Reform Commission, established the Changan PSA joint venture, and seized the best opportunity to enter China.

Su Hui proposed that domestic car makers should note that multinational companies are absolutely reluctant to see China becoming a powerful automobile country and instinctively hope that China will always be their assembly plant. The Chinese market will always consume their brand cars, and will always be their “brand”. colony".

"After becoming the world's largest auto-producing and selling country for two consecutive years, the people of the country have placed great hopes on the car industry, but today, some car companies are still obsessed with the use of neo-confucianism and agility. "Following foreign 'leftover women'" has exposed the unwillingness of car companies themselves." Jia Xinguang believes that some domestic self-owned brands prefer to invest in real estate and coal mines, and they are reluctant to invest funds in high-risk, high-input car R&D. This is contrary to the laws of automobile development. In the long run, domestic independent brands will face more severe challenges.