This time, the passenger car stock ratio of the joint venture car company is really going to be released. On 27 December, the National Development and Reform Commission and the Ministry of Commerce issued the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition). From January 1, 2022, the restriction on foreign ownership in passenger car manufacturing and the restriction that the same foreign company can establish two or less joint ventures in China to produce similar vehicle products, and the liberalization of the passenger car stock ratio has finally become a real hammer.
This means that the policy of restricting the joint venture share ratio that has been implemented in China for more than 20 years is about to withdraw from the historical stage. With the full liberalization of the joint venture passenger car stock ratio, there is general concern about whether it will have an impact on the development of independent brands. So, is the stock ratio let go really that scary? Will China's auto industry change drastically in the new round of competition? Today, Brother Rudder will have a good chat with you.
01
The stock ratio is released, and BMW, Daimler and other car companies are eager to try
When it comes to the liberalization of the passenger car stock ratio, it is impossible to avoid the restriction of the stock ratio. Back in 1994, in order to protect the local automobile industry, the state deliberately set a limit of "the foreign shareholding of the joint venture automobile company cannot exceed 50%", which has continued to this day. However, the National Development and Reform Commission has already announced that the time node for the opening of the joint venture equity ratio will be opened during the transition period. According to the plan, the foreign equity restrictions on special vehicles, new energy vehicles, commercial vehicles and passenger cars will be abolished in three phases: 2018, 2020 and 2022.
It is understood that during the transition period of the opening of the stock ratio, the market side has already reacted. Last week, Daimler and BYD signed an equity transfer agreement on restructuring the joint venture Denza Automobile. After the completion of the transfer, BYD's shareholding in Denza will increase from 50% to 90%, Daimler's shareholding will be reduced from 50% to 10%, and the equity transfer is expected to be completed in the first half of 2022. After the completion of the holding of Denza, BYD's voice in the joint venture has further increased, which will help smoother resource introduction and decision-making efficiency.
It is worth mentioning that the change in dentist auto's stock ratio is not an isolated case. Not long ago, Dongfeng Group, which holds 25% of the equity, announced its formal withdrawal from Dongfeng Yueda Kia, which means that Dongfeng Yueda Kia will change from the original tripartite joint venture to yueda and kia holding shares. It is reported that after the withdrawal of Dongfeng Group, Kia's future share ratio is still in consultation with Yueda, and the final result is expected to be announced in April 2022.
In fact, bmw cars are the first to eat crabs in terms of stock ratio changes. As early as 2018, Brilliance Auto has issued an announcement that it will sell 25% of BMW Brilliance to BMW Brilliance for 29 billion yuan, and BMW's shareholding in BMW Brilliance has reached 75%. At present, BMW and Brilliance have signed relevant agreements, but the formal delivery will be completed in 2022. BMW Brilliance has become the first foreign-funded car company to increase its shares after the liberalization of the clear timetable for the foreign equity ratio in China's automotive industry.
02
Behind most foreign brands
In fact, the news of the liberalization of the foreign ownership ratio of passenger cars was released at the official level five years ago, when many people were worried that the foreign investors in the joint venture car companies would imitate the behavior of BMW And expand their shares to win more chips for themselves. However, from the current disclosure, most of the joint ventures are still in a wait-and-see state, especially those joint venture car companies that get along well and have achieved good sales, and the interest of foreign parties in increasing the proportion of equity is not very large.
This is not difficult to understand, all the Sino-foreign joint ventures, both have experienced a lot of communication and run-in, spent a lot of time to establish the team, the two sides are currently cooperating smoothly, the operation is in good condition, and now they are in the harvest period. Nowadays, if you want to break the balance of the stock ratio, whether it is the impact on the performance of the joint venture company or the test of funds, it is necessary to "think twice".
What's more, most foreign car companies rely heavily on the Chinese market, and any turmoil may lead to large fluctuations in the company's stock price. According to 2020 data, German car companies account for more than 30% of their total sales in China; Japanese Honda and Nissan are both more than 36% dependent on the Chinese market; and American General Motors is 42.5% dependent on the Chinese market. Such a situation makes the foreign party of a well-run joint venture dare not act rashly.
However, for some joint venture car companies that are not operating well, the possibility of adjusting the joint venture share ratio will be relatively large. It is worth mentioning that many foreign car companies that have performed unsatisfactorily in the domestic market have chosen to directly withdraw from the Chinese market, such as Renault, Suzuki, Nazhijie and other car companies. Therefore, in addition to poor management and car companies that have already determined to adjust their equity, other foreign car companies will not easily adjust the proportion of equity in the joint venture in a short period of time.
03
The "new four modernizations" help independent brands to overtake in curves
Some people regard the liberalization of the stock ratio as a flood beast, after all, the joint venture brand still occupies a dominant position in the domestic market, and the independent brand will face greater challenges after losing policy support. In fact, the joint venture share ratio restriction has won sufficient growth space for the development of China's automobile industry, and has also trained a large number of outstanding engineers and technicians, as well as management talents of various departments, independent brands have made great progress in design and technology, and the overall strength has long been different.
As we all know, SAIC, GAC, Changan and other "national teams" have been working on their own brands and have achieved certain results; private car companies that do not rely on joint venture brands such as Geely, Great Wall, BYD, etc. have also achieved good performance, and the impact of changes in the joint venture share ratio on them is very limited.
More critically, with the continuous development and maturity of China's automobile industry, in the context of the automobile transformation led by the trend of "new four modernizations", independent brands have their own advantages in the "new four modernizations" track, and are not as dependent on the technology of foreign car companies in the past. According to the data of the Association, in November 2021, the penetration rate of independent brands in the new energy vehicle market was 37.4%, compared with only 3.6% of mainstream joint venture brands. From the data point of view, the performance of independent brand new energy vehicles is strong, and they have more market competitive advantages than foreign brands in the transformation to electrification, and will use new energy to overtake in the future.
There is no doubt that the contribution of the joint venture brand to China's automotive industry is very large, but we cannot blindly regard the joint venture car companies as "profit cows", and such "take-ism" is doomed to be unable to support China's auto industry. In any case, the opening of the joint venture passenger car stock ratio has become a foregone conclusion, if it is not willing to be eliminated by the ruthless market, every car company needs to actively respond to challenges and improve the ability of enterprises to resist risks. Finally, I would like to say that the liberalization of the joint venture share ratio is not a bad thing, and the increasingly fierce competition is conducive to the survival of the fittest in the automobile industry, and it is ultimately a favorable measure for the automotive industry and the development of the country.