Written by / Long Shihui
Edited / Kilig
Design / Zoi.
2022 is coming as scheduled, and those who are worried about the total annihilation of independent car companies in the opening of the joint venture share ratio have not become the mainstream.
Time back to mid-2018, the National Development and Reform Commission, the Ministry of Commerce officially announced that in 2018, the restrictions on foreign ownership of special vehicles and new energy vehicles will be abolished, the restrictions on foreign ownership of commercial vehicles will be abolished in 2020, and the restrictions on foreign ownership of passenger cars will be abolished in 2022, while the restrictions on joint ventures will not exceed two.
In October 2018, BMW Brilliance became the "first case" of the joint venture share ratio, planning to increase the proportion of BMW Brilliance's shareholding in bmw brilliance joint venture from 50% to 75% by 2022, while Brilliance Automotive fell to 25%, and BMW Group became the largest shareholder of the joint venture company. Undoubtedly, through more than three years of joint ventures, BMW Group's penetration and profit margin in the Chinese market have gone up to a higher level, according to statistics, in the first three quarters of 2021, BMW has delivered 669,600 new cars to China, and has long fulfilled its commitment to increase production capacity after increasing its shares.
And that side of the box, the loss of 25% of the equity of Brilliance development stagnated, long-term joint venture cooperation let Brilliance enjoy its success, lost the driving force of its own brand, its two sub-brands of Zhonghua and Jinbei are difficult to rise, it is difficult to have a place in the market. The sensitive market always likes to take Brilliance as an example, analogous to other independent car companies, can they get enough tickets for transformation on the eve of the joint venture stock ratio is completely open? Especially in the car company group with a high proportion of joint venture contribution and independent brands that have not yet been supported, if the "stock ratio umbrella" is lost in 2022, the product and image can only hover at the low end, and even the whole army is destroyed.
It is true that Che Lizi believes that such worries underestimate the pressure resistance of independent brands, and China has stepped into the era of intelligent cars, and independent brands are less and less afraid of opening up the stock ratio. According to data from the China Automobile Association, in the first 11 months of 2021, a total of 8.406 million self-brand passenger cars were sold, an increase of 25.1% year-on-year, accounting for 44.1% of the total sales of passenger cars, an increase of 6.4% year-on-year, and the market share maintained growth for 8 consecutive months year-on-year. Moreover, the improvement of this round of independent share is also accompanied by a very important feature: the advantages of products in electrification and intelligence are in front of joint venture brands and luxury brands, feeding back the weak reliability and brand power of autonomy, so that independent impact joint ventures have more advantages.
Moreover, China's car market has been changing, changes in travel demand, changes in fuel/new energy structure, have prompted us to dynamically look at the problem, rather than too entangled in autonomy after the "wolf really came" can not be desperate, it is better to focus on the impact of the completely open stock ratio on the entire automobile competition pattern.
Autonomously not afraid of joint venture open share ratio?
Che Lizi sorted out the changes in the share ratio of joint venture car companies in 2021 (incomplete statistics), both independent brands transferred their shares to foreign parties (Yueda Kia), foreign parties transferred equity to their own (Southeast, Denza), and also independently transferred to another independent brand (the merger of the two Malaysias), in which independent brands are no longer the role of "talking about stock color change".
When Dongfeng transferred 25% of the shares of Dongfeng Yueda Kia, a market source close to Dongfeng pointed out: "Dongfeng is actively withdrawing this time, originally less equity can not talk about intervention in product planning, production management, and in recent years, Dongfeng Yueda Kia sales have continued to decline, and it is better to resist losses than to sell the equity before the opening of the stock ratio." It is understood that in the first 10 months of 2021, the net loss of Dongfeng Yueda Kia reached 2.612 billion yuan, rather than being dragged down, it is better to shrink the front line and comprehensively develop Dongfeng's own brand."
The hustle and bustle of the world is all profit, and the world is all profitable. In the final analysis, at this time, the ups and downs of the equity ratio of joint venture car companies are more considerations of the two sides standing on the commercial reciprocal relationship, especially after the Chinese auto market enters the stock competition, the joint venture brand is also facing a reshuffle period, and the higher the market share of the north and south Volkswagen and the two fields and four enterprises, it is a challenge to other foreign brands.
At the end of 2021, the transfer of Denza's share ratio is another way of going forward and backward, BYD will accept the 40% equity of Denza held by Daimler China, and the shareholding ratio of both parties will be adjusted to 90% and 10%, on the surface, BYD completely takes over the denza that has been losing money for many years, which is a compromise. However, the cooperation between the two sides since 2010 has not lost, Daimler has learned from BYD's experience in new energy car manufacturing, saving costs and taking fewer detours, while BYD has been precipitated by Daimler's design, chassis tuning, and quality management for a century of automotive industry precipitation, and some analysts expect that BYD's capital increase at this time is to pave the way for future high-end brands.
Of course, from the absolute value of sales, the vast majority of joint venture brands are still the "profit cows" of independent car companies, the market's previous statistics, the six state-owned automobile groups' own brand sales accounted for the total, more than 50% of the only SAIC and Changan, although there is a difference in time nodes, but enough to explain the state-owned car companies' own brand climate.
In particular, the ultra-low proportion of BAIC Group's independent brand sector accounting for only 5%, has been criticized, in the first half of 2021, BAIC shares of 90.375 billion yuan of revenue, Beijing Benz accounted for 97.4%, but there are views described as after the opening of the Beijing Benz stock ratio, BAIC is the "next Brilliance", but there are reservations about this car. Although it is true that BAIC's autonomous sector is weak, BAIC and Daimler can find a "cross-shareholding" balance, proving that BAIC has found another form to hedge the profit risk that Daimler may increase its holdings in Beijing Benz in the future, and this form is mutually recognized. In December 2021, BAIC Group announced that it had become the largest shareholder in 2019 by holding 9.98% of Daimler's shares through continued investment. From a practical point of view, BAIC and Daimler take what they need, each family has its own way of life, whether the family is living well or not, what right do outsiders have to say?
In 2021, the share of independent brands in the market reached a new high, which is the result of 2-3 rounds of good product hard work in 4 years, giving the independent sufficient market, money and technical confidence. Whether it is admitted or not, this is the truth, on the issue of the liberalization of the stock ratio, the rising Chinese car companies have naturally increased their bargaining chips. However, it does not mean that you can sit back and relax on your own.
The rise in the joint venture share ratio of foreign parties means that the profits contributed by the joint venture brand to the Chinese car companies are reduced, which forces the latter to become bigger and stronger in the autonomous sector, get rid of the previous dependence on foreign technology, brand dependence, management dependence, and identify their core competitiveness. Moreover, after the opening of the stock ratio, the more fierce the competition between independent brands, like Brilliance, there is no achievement in the joint venture brand, only rely on the independent brands of foreign parties, follow the law of the market to eliminate the weak and leave the strong, it is not a pity to eliminate, but enhance the overall competitiveness of mainstream independent brands.
The key to success here is whether the autonomous sector can find the core market positioning in the future. In 2021, FAW Hongqi increased by more than 50% year-on-year, SAIC Passenger Vehicle Matrix clearly distinguished new energy business in the front, GAC Trumpchi can introduce Toyota's most proud hybrid THS technology, which is enough to prove that the independent discourse power is increasing, and the independent brands like BAIC and Dongfeng are not big or strong, and the market competitive advantage is not established, which is worrying. At the moment when fuel vehicles are still the main body of sales, independent profits are not strong enough to be the most deadly, and it is more important to find the future positioning than anything else.
The new era of joint ventures
From the announcement of the policy in 2018 to the full liberalization of the joint venture share ratio in 2022, the four years of which give each joint venture car company time for internal research and consideration and stalemate game, which I think is enough. Previously, in addition to BMW Brilliance tearing from the weak side, other joint venture car companies that have adjusted their share ratios are more active adjustments made by brand positioning and product competitiveness in the market.
More noteworthy is that from the 4 years of independent brand rush, the advantages in the new energy track are more and more obvious, in contrast, in recent years, the localization of joint ventures and cost reduction measures are not thorough enough, in the face of independent brands of the attack and luxury car pressure, the overall appeal of the joint venture brand, certainly not as popular as before, in the first 11 months of 2021, the German and Japanese market share fell to about 20% hovering. At this time, the foreign party wants to increase the proportion of joint venture shares, the capital chain, localization and other difficulties are many, rather than seeking fish, it is better to find a delicate balance point in the long joint venture period, to maximize their own interests, is the core issue.
In Che Lizi's view, one of the balance points is to accelerate the localization of luxury brands, and the other is to pull up the rapid layout of independent brands that have advantages in the new energy track. It should be noted that it is precisely the overtaking of new energy in the curve of autonomy, which plays a vital catalytic role.
Audi FAW BJEV is a clear example, this January 2021 joint venture project, of which Audi and Volkswagen accounted for 60% of the equity, from the official external positioning can be seen that the enthusiasm of the Volkswagen Group in this project is very high, the first phase of the introduction of Audi and Porsche large-scale electric vehicle development platform PPE, including Audi Q6L e-tron (eQ5), Q6L e-tron Sportback (eQ6) and other electric vehicle models There is no doubt that Audi FAW's main task is to produce electric vehicles, paving the way and accelerating Audi's electrification strategy in China.
China's luxury car market share has gradually increased, luxury brands are inherently more profitable, and it is generally believed that China's right to speak is not high, and the attraction of foreign parties to enhance equity is naturally greater. However, Audi and Volkswagen have never increased their share ratio of FAW-Volkswagen Audi, but have sought to gain a greater voice in a new electric joint venture project, and the intention of betting on the domestic high-end new energy market is very clear. After the BMW Group increased its share ratio to 75%, BMW's development of the Chinese market focused on electrification, including the export of the domestic BMW iX3, the rapid launch of the pure electric matrix, and the priority domestic production of the pure electric 3 series... Obviously, the balance of the stock ratio is only a means, how to get an extra share of the world's largest new energy vehicle market is what foreign car companies are most concerned about.
It is foreseeable that Lexus, which has been rumored to be domestically produced many times, may usher in a turnaround in the new energy track. Since earlier Toyota Akio announced that Lexus will become a pure electric brand in 2030, then China is naturally one of the main battlefields of Lexus transformation, as a second-tier brand, Lexus advantage is not bad money, but the lack of pure electricity accumulation, the current Lexus pure electric model is only 1, the proportion of oil-electric hybrid sales is also below 40%; in the case of backward electrification layout, joint venture domestic production is almost a must option, there is no Chinese partner, and it is a problem to be dissatisfied with the water and soil in China. And a good Chinese partner can help Lexus accelerate electrification with its own rich new energy experience. Earlier market news also pointed out that the Volkswagen Group will not change its stake in the North and South Volkswagen in the future, but will slowly seek the balance of the final profit by making jianghuai volkswagen bigger. It can be seen that Lexus is domestically produced and who to choose to jointly invest in, and Toyota considers the contributions and capabilities of both Chinese and foreign parties in the joint venture company, and a piece of soil suitable for its new energy strategic development is particularly important.
"Market for technology", this is the original intention of the establishment of domestic automobile joint venture brands, but today, after 39 years of development, "joint venture automobile brands" should also have a new definition. In the era of fuel vehicles, the heroes of the joint venture brand to make money are on the outside, and the foreign party is naturally strong, but the autonomy may not be able to be reversed in the era of intelligence, and Cui Dongshu, secretary general of the Association of Automobile Associations, also said after the opening of the stock ratio: "The release of the stock ratio has little impact on the market pattern in the short term, and in the long run, the independent brand will gain a more advantageous market position with the help of the strong growth of new energy." ”
Today, there are many examples of foreign parties actively moving closer, and most of them are in the field of new energy, such as the pure electric project cooperated by Toyota and BYD, the first model to be launched at the end of 2022, the design, research and development, and technology of the vehicle are BYD's, Toyota only accepts and hangs on the "bull head label", and independent car companies have begun to become the dominant position in technology output, subverting the inherent image of the previous joint venture car. In the beam car cooperated by BMW and the Great Wall, and the smart motor cooperated by Geely and Daimler, autonomy also plays a pivotal role. Volvo and Geely joint venture Lynk & Co also reflects the characteristics of the "new joint venture", the biggest breakthrough is to change the previous one-way output mode of the foreign joint venture, the two sides are based on the basis of equal and mutual cooperation such as joint research and development in technology, resource sharing and so on.
Write at the end
At the Tokyo Motor Show in October 2003, Carlos Ghosn, then president of Nissan Motor, complained that "the contribution of the Chinese partners of the joint venture to actual operation and management is almost zero." At that time, he should not have imagined that it took only 19 years for the Chinese side to change from only a promise to a headwind reversal.
If the joint venture share ratio is regarded as a marriage certificate that binds the marriage between Chinese and foreign parties, the relaxation of the 2022 can make the parties see the advantages and disadvantages of this marriage more clearly, it is true that the protagonist of a marriage is not the marriage book, but the daily money, oil and salt, the game or compromise between the two sides; before in order to "exchange the market for technology", it had to "pull lang match", truthfully unsuitable, break up and then find an opponent, or even live alone, and now the Chinese side and the foreign party, both sides are in an equal position.
Among them, we should see that the combination of vertical and horizontal, mutual checks and balances, which are tactical issues within the two sides of the joint venture, does not affect the overall situation of the vigorous development of China's auto market.
-END-