Just celebrating the first anniversary of its completion, stellantis Group once again released a satellite, unilaterally announcing that it "plans to increase the share ratio of FCA to 75%" in GAC FCA. GAC Group then responded with a "punch in the face".
On January 27, Stellantis Group announced on its official website that it "plans to increase its stake in the joint venture GAC FCA from the current 50% to 75%" and that "GAC Group and Stellantis have agreed to the formalities related to the transaction, but still need to be approved by regulatory authorities" More details of the cooperation are expected to be announced in the global strategic plan on March 1. In the context of the liberalization of the joint venture red line of foreign ownership ratio of no more than 50%, the news of Stellantis Group has undoubtedly aroused widespread concern.
Intriguingly, the other party seems to be in the dark, and GAC Group stated that "at present, the two parties have not signed a formal agreement on the equity adjustment of GAC FCA." Regarding foreign joint venture cooperation, the company will strictly abide by the national policies and regulations to perform the corresponding procedures, adhering to the principle of mutual trust and win-win. ”
As a result, GAC Group is also "planned by Stellantis Group to increase its shareholding in the joint venture GAC FCA from the current 50% to 75%." The news was caught off guard, the Stellantis Group will not be unaware of the inside story nor ignorant of the information disclosure regulations, unilateral behavior is nothing more than want to cut first and then play, make raw rice into a mature meal.
The Stellantis Group wants to create "established facts", and the GAC Group does not want to be led by the nose. At the same time, GAC Group did not avoid the current predicament of GAC FCA, acknowledging that there have been major difficulties in the operation of GAC FCA in recent years, and the shareholders of the two sides of the joint venture have conducted in-depth communication and consultation on their joint venture and cooperation and the revitalization plan of GAC FCA.
Since its establishment in March 2010, GAC FCA has a 12-year growth process, and currently has two vehicle plants in Changsha and Guangzhou, as well as an engine plant, with a total production capacity of 328,000 units. With the landing of localization projects, the three SUV models of Guide, Free Light and Free Hero have been domestically produced, and sales have begun to increase explosively.
According to the data, in 2016, GAC FCA achieved sales of 179,900 vehicles, and by 2017, GAC FCA's cumulative sales exceeded 220,000 vehicles, reaching a record high. After entering 2018, some historical backlog problems have appeared, and sales have plummeted by 38.99% year-on-year to 125,100 units. In 2021, GAC FCA's annual sales of only 20,000 vehicles remained, only a fraction of its peak sales.
GAC FCA has gradually become a "burden" for GAC Group. As a flash in the pan, GAC FCA is difficult to heal in ten years, resulting in a decline in sales, idle production capacity caused dissatisfaction among production workers, and can only rely on shareholders to "transfuse" to survive. According to public information, in 2020 alone, the capital increase and loan of both shareholders will exceed 4 billion yuan, and gac FCA will support GAC FCA to tide over the difficulties with practical actions.
However, although GAC FCA needs financial support, what it needs more is product upgrading to boost market morale. However, at this time, the Stellantis Group has just completed the merger, and the internal combing and adjustment cannot be taken into account at this time, and the support for GAC FCA just does not want to give up China, the largest automobile market.
As we all know, there are many rumors about the "withdrawal" of GAC Group. As early as last September, it was reported that GAC Group had negotiated with Stellantis Group to transfer 20% of its shares in GAC FCA and was in the process of approval. However, both sides denied the news.
Stellantis Group's response at this time is that it will integrate Jeep's import business and local joint venture business, and GAC FCA will focus on the production of Changsha plant to improve the capacity utilization rate of the plant, further reduce the operation and maintenance costs of enterprises, improve the management efficiency of joint ventures, and effectively enhance the comprehensive competitiveness and profitability of enterprises.
Judging from the above-mentioned stellantis group statement, the integration of GAC FCA's Changsha and Guangzhou plants is an established fact, but the acquisition of 20% of the equity of GAC Group is not involved. At the same time, it can also be found that for GAC FCA, GAC Group is reluctant to state too much, and Stellantis Group is more interested.
After Mu Anze was appointed president of GAC FCA, a revival plan for the GAC FCA Jeep brand was proposed. Three steps will be taken. The first is to adjust the target, from talking about sales figures to talking about profit growth; the second is to implement the One Jeep plan to integrate the two concepts of Jeep imported cars and domestic cars; the third is to accelerate the pace of product renewal and better match the needs of Chinese consumers.
However, judging from the sales performance in 2021, the revival plan has not been effective. Another joint venture brand of Stellantis Group, DPCA, sold more than 100,000 units in 2021, an increase of 100.07% year-on-year, and GAC Group's 2020 financial report showed that in 2020, GAC FCA lost as much as 1.333 billion yuan, and the market situation was much worse than before. At the same time, Dongfeng Group once again reduced its stake in Stellantis Group, and after the successful completion of the transaction, Dongfeng Group only held 3.2% of the equity of Stella Group.
At present, the news that "it plans to increase its shareholding in the joint venture GAC FCA from the current 50% to 75% on the Stallantis Group website can no longer be found on the website of the Stellantis Group, but the Stellantis Group has caught the GAC Group off guard. At the same time, it also indicates that the two sides have either not reached an agreement or have not completed the approval process.
It is obvious that Stellantis Group's desire for GAC FCA, after being reduced by Dongfeng Group, will increase the right to speak in the share ratio of GAC FCA, which will become an important part of Stellantis Group's new strategy on March 1. However, the rush to achieve results is counterproductive and loses the initiative in negotiations.