Chery and the "fruit chain brother" (Apple industry chain) Luxshare precision plot has just ended, the new drama code is coming again. This time, the protagonists are Chery Commercial Vehicle and Southeast Automobile.
A few days ago, a PPT about chery commercial vehicles and Southeast Automobile's cooperation plan circulated wildly on the Internet, which surprised many people. Two brands that once could not be beaten by eight rods suddenly came together, which made people doubt and question. However, the details of the content have to make people believe in its authenticity.
Online PPT screenshot | Image source: Fuzhou city construction fans
According to the plan, the cooperation between the two sides will be based on Southeast Automobile and operated by the Southeast Jietu Automobile brand. After selling no less than 75,000 vehicles in 2023, the 80% stake in Southeast Automobile will be transferred to Chery free of charge in the first quarter of 2024.
In this regard, Cheshi Monogatari called Chery Commercial Vehicle and Southeast Automobile respectively. Chery Commercial Vehicle Jietu insiders said: "This is a matter of the entire group's strategy, and there is no specific news at present." Southeast Auto responded: "No comment."
An insider close to Southeast Automobile also revealed: "The cooperation between the two sides is still in the high-level docking stage, and the specific situation has not yet been finalized." "But in any case, since the two sides can sit face to face at the negotiating table, it already shows that each other has something they need."
So can Southeast Automobile and Chery Commercial Vehicle meet each other's demands? What are the prospects for their cooperation?
#01
Southeast: Survive first
Backed by the technical support of the veteran Japanese company Mitsubishi, the first half of Southeast Automobile's life can be regarded as smooth. But since Mitsubishi joined hands with GAC, Southeast Auto has begun to suffer from "snubbing". Basically since 2015, Mitsubishi has no longer provided any technical research and development assistance to Southeast. In 2017, with the discontinuation of wing god, there were no more Mitsubishi models under the southeastern banner.
Fortunately, Southeast Auto later caught up with a wave of SUV dividends. With the positive development of DX3, DX5 and other models, in 2017 and 2018, it has achieved monthly sales of more than 10,000. However, the good times were not long, and with the cold market environment, the lack of competitiveness of Southeast Automobile still failed to escape the fate of declining.
Based on Mitsubishi LANCER, The Southeast Ling Shuai
In 2021, Mitsubishi Motors completely withdrew from Southeast Motors, and its 25% stake was replaced by the new shareholder, Fuzhou Transportation Construction Investment Group Co., Ltd. At that time, the southeast car had reached a difficult point. Annual sales in 2021 are only 7265 vehicles, which is less than the sales of the new forces in a month. Many dealers have also withdrawn from the network and turned to other brands such as GAC Mitsubishi.
But the stubborn Southeast car still wants to make a last attempt. At the end of 2021, Southeast Automobile held a brand renewal conference, and released a new brand logo, and the new product DX9 also ushered in its debut. Unfortunately, the Southeast Automobile, which broke away from Mitsubishi, did not make much noise and is slowly fading out of people's vision.
Southeast Motor's parent company, Fujian Automobile Group, has been unable to transfuse blood for it. Fuqi's Jinlong Automobile's 2021 annual forecast attributable net profit to the mother is -590 million yuan, a year-on-year change from profit to loss; although Yundu has obtained production qualifications, it has actually been on the verge of being eliminated.
"The goal of Southeast Automobile is very clear, that is, to survive and preserve production qualifications." For the government, it can ensure the employment of local workers and revitalize the relevant automobile industry chain. Auto analyst Liu Ming (pseudonym) said to the car market Monogatari.
Notice of Exit Mechanism for the Automotive Industry issued in 2012
As early as 2012, the Ministry of Industry and Information Technology issued a notice on the establishment of an exit mechanism for the automotive industry, implementing a two-year special publicity management for automobile and motorcycle production enterprises that cannot maintain normal production and operation, and after the expiration of the special publicity period, if the enterprises that do not meet the qualification requirements will be delisted.
These include enterprises that have stopped production, semi-suspended production, lost money for many years, are insolvent, and mainly rely on central government subsidies and bank loan renewals to maintain their operations. Southeast Auto is currently facing such a situation, so it urgently needs a strategic investor who has the ability to take Southeast Auto out of the mud.
"Throughout the development history of Southeast Automobile, in fact, there has been a lack of accumulation of core technologies, resulting in insufficient competitiveness. After Mitsubishi's exit, it needed a new strategic investor to replace Mitsubishi's position and thus gain technical support. Liu Ming said, "For Southeast Automobile, a simple capital entry cannot solve the problem of survival, in addition to saving life, we must also consider the problem of hematopoiesis."
#02
From sub-sequences to independent brands, Gittarius embarks on the road to expansion
Compared with the nearly 30 years of bumpy experience of Southeast Automobile, Chery Commercial Vehicle's shortcut can be described as a spring breeze, and it is still very young and full of momentum. Founded in 2018, Jietu initially belonged to a product sub-series of Chery Commercial Vehicles, and was not promoted to an independent brand until July last year.
However, despite his youth, Jietu's resume can be said to be full of highlights. Backed by Chery Group's strong R&D strength, although Jietu has only been established for 4 years, its cumulative sales have approached 500,000 vehicles. Such a brutal growth rate once made people in the industry call "dark horses".
But Jietu's eyes are much more than that. At last year's brand night when the Jietu sequence evolved to the Jietu brand, the Jietu auto people shouted a slogan that made people feel both excited and a little surprised: in 5 years, by 2026, Jietu Auto hopes to achieve the annual sales target of 1 million vehicles (700,000 domestic + 300,000 overseas).
Jietu was upgraded from serial to independent brand
Li Xueyong, deputy general manager of Jietu Automobile and general manager of the marketing center, said bluntly, "The goal of 2024 is to ensure more than 500,000 vehicles." "You know, Jietu's sales in 2021 will just exceed 150,000 vehicles. To achieve this ambitious goal, Jietu needs to be fully prepared from all aspects such as products, production capacity, and channels.
Of course, the need for capacity for such a massive expansion is obvious. At present, the main production base of Jietu is located in Chery Kaifeng Factory. The plant has a production capacity of 300,000, of which Jietu products account for 200,000 planned production capacity (now expected to reach about 150,000), and the remaining 100,000 are reserved for commercial vehicle models such as Karry New Energy. From this point of view, Jietu is still a bit tight in terms of production capacity, even if it is backed by The Great Chery, it is difficult to carry the scale of 1 million vehicles in 2026.
"The development of Jietu in recent years is indeed very fast, but the investment in completing 500,000, 1 million and completing 100,000 vehicles is not at all on the order of magnitude. The challenges it faces are growing exponentially. Capacity is a big problem. Liu Ming said, "In view of Chery's own development in recent years, the production capacity reserved for Jietu should not be too much." ”
Chery's development momentum in the past two years is indeed sufficient. According to the annual sales data released by Chery Holding Group at the beginning of the year, Chery Group's cumulative sales of cars in 2021 reached a historic 961,926 vehicles, and it is about to move towards the million mark. In 2022, Chery Group has put forward the goal of ensuring annual sales of 1.5 million vehicles, striving for 2 million vehicles, and annual operating income of 200 billion yuan.
"Moreover, Chery does not have a base in the Southern Market at present, which may be an opportunity for them to expand to the Southern Market." Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said to the car market Monogatari. In his view, companies with basic logic or strength hope to continue to expand, and they also feel that they can expand.
#03
Blindly "annexing" or taking what is needed?
At the beginning of this year, China's first Travel + Conference and Jietu Automobile Brand Night event was held in Fuzhou, which is a coincidence or a meaning, which is very intriguing in retrospect. At that time, people may not have imagined that the story between Chery Jietu and Fuzhou had just begun. But for each other, will the story come to a good ending?
According to the plan, Chery Commercial Vehicle is mainly invested in technology, and the first stage activates the normal operation of Southeast Automobile in the form of a rebranding, and then restores its "hematopoietic" capability. Final completion of the equity transfer.
"For Southeast Automobile, it obviously has no hope of surviving on its own, the era of barely surviving by eating Mitsubishi old ben has passed, it needs to introduce new products and technologies, and Chery, known as the 'Polytechnic Man', can provide a strong blessing to Southeast in technology, which is beyond doubt." Liu Ming said.
However, for Chery Commercial Vehicles, Southeast Automobile is not a good target, and some people in the industry have questioned this. In their view, Chery Commercial Vehicle's acquisition of Southeast Automobile can only see the acquisition of production capacity at a low price or the use of technology and products in exchange for production capacity.
Looking at the history of relevant cooperation between domestic car companies, there are many similar cooperations, but most of them end in failure. For example, the former Shangnan integration (SAIC and NANC), Tianyi reorganization (Tianqi and FAW), GAC Gio, etc., have not been spared.
"If the acquisition itself has no business complementarity and actual benefits, and is simply a scale expansion, it is actually easy to have this kind of problem." An industry insider said, "Just simply eating each other, but it is easy to appear the phenomenon of tail failure, resulting in its own products, technology, research and development, management, etc. are too scattered, increasing operating costs." ”
In 2013, the Fujian Provincial Government signed a strategic cooperation agreement with Dongfeng Motor Company in Fuzhou
For example, Fuqi Group, the parent company of Southeast Automobile, has also circulated rumors of restructuring many times. It has been in contact with large domestic automobile groups including Dongfeng, BAIC, and GAC, especially the negotiations with Dongfeng, which are basically at the stage of imminent nailing, but in the end, there is no follow-up.
"The two sides of the cooperation are actually a matter of contention for the right to speak," Liu Ming said, "moreover, for car companies with a state-owned background, restructuring, mergers, acquisitions and other behaviors are much more complicated than private car companies, which will involve many relevant interest groups, and the dominance may not be in the hands of car companies at all." ”
However, in Xu Haidong's view, the cooperation between Chery Commercial Vehicle and Southeast Automobile is a good resource integration. China's automobile industry has developed for so many years, and some problems in the industry have been clearly seen and recognized. This is actually different from the cases of that year.
Chery Commercial Vehicle is a blessing in disguise for Southeast Automobile, will Southeast Automobile be the icing on the cake for Chery Commercial Vehicle?