The two sides have their own opinions Gaga Fick compete for shares than "oolong"?

The different opinions of Stellantis Group and GAC Group have cast a fog over how and whether GAC FCA's share ratio will be adjusted. On January 27, Stellantis Group announced that it plans to increase its stake in its joint venture, GAC FCA, to 75%. But then GAC Group, another shareholder of the joint venture, issued an announcement saying: "We have not approved it." This means that the shareholders have not reached a consensus on this matter.

Behind this "oolong", it is at a time when GAC FCA is in a dilemma in the development of China. Because the brand power lags behind the mainstream joint venture brand, and at the same time is blocked by its own brand, the sales volume of GAC FCA, which is in the crack, has been hit hard. In order to seek a turnaround, the shareholders of GAC FCA have been actively adjusting and "transfusing", but in the fierce competition in the Chinese auto market, GAC FCA's life is still difficult. Industry insiders believe that although there is no specific statement on the adjustment of the stock ratio, with the liberalization of the stock ratio policy this year, the adjustment of the stock ratio may help GAC FCA find a better way out.

Adjustments are proposed again

With the "disappearance" of the red line of the joint venture with the foreign equity ratio not exceeding 50%, the "game" of the adjustment of the equity ratio of the joint venture company has begun.

On January 27, Stellantis Group announced on its official website that it plans to increase its shareholding in GAC FCA, a joint venture with GAC Group, from 50% to 75%, and that GAC Group and Stellantis have agreed to the relevant procedures for the transaction, but still need to be approved by regulatory authorities.

Interestingly, the plot flipped that night. On the evening of January 27, GAC Group issued an announcement that GAC Group learned from the official website of Stellantis about its release on the equity adjustment of GAC FCA, and the shareholders of the two sides of the joint venture had in-depth communication and consultation on their joint venture and cooperation and the revitalization plan of GAC FCA, and the two sides have not yet signed a formal agreement on the equity adjustment of GAC FCA.

Subsequently, on January 28, the official website of GAC Group once again issued a statement saying, "GAC Group learned from the official website of Stellantis about its release on the equity adjustment of GAC FCA." This announcement is not approved by us, and GAC Group deeply regrets it. Regarding foreign joint venture cooperation, GAC Group will promote in strict accordance with national laws, regulations and policies, adhering to the principle of mutual trust and win-win results."

In fact, this is not the first time that GAC FCA has reported a stock ratio adjustment. In September last year, it was reported that GAC Group had negotiated with Stellantis Group to transfer 20% of its shares in GAC FCA and was going through the process. As part of the plan, GAC FCA's Guangzhou plant will soon stop production, and in the future, ALL GAC FCA models will be produced at the Changsha plant. The Guangzhou plant will complete the transfer of major production line equipment to the Changsha plant in 2021 and the classification and disposal of other assets, and complete the cancellation of "GAC FCA Guangzhou Branch" by March 2022. At that time, both shareholders said: "I have not learned of this news. ”

According to the data, GAC FCA was established on March 9, 2010, by gac group, Stellantis group with a 50:50 share ratio joint investment and establishment, a total investment of about 17 billion yuan, the company is headquartered in Hunan Changsha national economic and technological development zone, with Changsha plant and Guangzhou plant two vehicle plants, the overall design capacity of 328,000 vehicles. If the share ratio adjustment is landed, it means that the shareholding ratio of both shareholders of GAC FCA will become 25:75, and Stellantis Group will become the controlling party of the GAC FCA joint venture.

Find a way out

Behind the rumors of the adjustment of the stock ratio many times, it is not unrelated to the dilemma faced by GAC FCA in China.

In 2015, the main brand of GAC FCA, Jeep, officially realized localization, and the first model went offline 9 months later and went on the market that year. Subsequently, GAC FCA launched the Liberty Hero, Guide, Big Commander and other models, completed the product camp covering small, compact and medium-sized SUVs, and also ushered in the highlight moment of the Jeep brand in China.

In 2016, GAC FCA sold 179,900 units, of which the first domestic model, the Free Light, contributed 55%. In 2017, GAC FCA achieved sales of 222,300 units. However, the good times did not last long, and gac FCA sales fell to 125,200 units in 2018; in 2019, sales were only 73,900 units; and sales in 2020 further fell to 40,500 units. Last year, GAC FCA sold 20,100 vehicles, down 50.33% year-on-year, with an average monthly sales of less than 2,000 vehicles.

At the same time as poor sales, GAC FCA also suffered serious losses. According to the financial report, in 2017, the net assets of GAC FCA were 4.422 billion yuan, and in 2020, its net assets fell to -331 million yuan, and in three years, GAC FCA accumulated a loss of 4.753 billion yuan, making it the brand with the largest loss under GAC Group.

However, the "loss" of sales did not make both shareholders give up on GAC FCA. In August 2020 and July last year, GAC FCA received capital injections from both shareholders, accumulating 4 billion yuan. At the same time, in July last year, Mu Anze was appointed as the president of GAC FCA, with overall responsibility for the operation and management of the Jeep brand in China.

According to the data, Mu Anze has rich experience in enterprise operation and management. He has worked in GM, OHorizonsGlobal, Tyco Electronics and other companies, has experience in different countries, different industries, and has served as the head of sales and marketing. Mu Anze said that the cost structure of the entire enterprise must be optimized, and certain adjustments will be made to the production capacity of the Guangzhou factory. In addition to optimizing factory and physical assets, work processes, working methods, internal organizational structures, functions, etc. are also optimized. Mu Anze, who was in danger, said bluntly: "We will always be here, but the focus of the future is not on sales figures, but more on the improvement of profitability." ”

In order to improve the current operating conditions of GAC FCA, Mu Anze implemented the "OneJeep" plan, which will face consumers with a unified image of Jeep imported cars and domestic cars. At the same time, the product will also be renewed, and in the future, GAC FCA will renew at a faster pace, and at the same time more in line with the rhythm of market changes, and the needs of consumers in the Chinese market will be more in line with each other. This means that Mu Anze's plan is to reduce the cost and then open source. The relevant person in charge of stellantis group told the Beijing Business Daily reporter that the details of China's strategy will be announced in the global strategic plan on March 1 this year.

Yan Jinghui, a member of the expert committee of the China Circulation Association, said: "Although the adjustment of the share ratio has not yet been finalized, if the foreign party obtains a controlling stake in the joint venture company, it will be more conducive to the integration of the globalization strategy and the introduction of models." At the same time, GAC Group can also reduce some of the pressure and better focus on the development of its own brands, but no matter how it is adjusted, the Chinese market has little time left for GAC FCA. ”

Beijing Business Daily reporter Liu Xiaomeng