In the 1990s, the mainland embarked on the road of joint venture cooperation and development of automobile enterprises, through the introduction of overseas automobile brands, learning advanced technology and manufacturing experience, rapidly promoting the development of the mainland automobile industry, and thus deriving a number of joint venture car companies, Southeast Automobile, which was born in Fujian, is one of them.
With its joint venture with Mitsubishi Motors, Southeast Motor was once in the ascendancy, but with Mitsubishi switching to GAC, Southeast Motors also began to sunset, and the brand competitiveness declined sharply. In 2021, the complete withdrawal of Mitsubishi Motors has caused Southeast Automobile to lose its last support and hover on the verge of suspension of production and withdrawal of the network. Therefore, it must quickly embrace the new "big tree" to maintain the survival and development of the enterprise, and Chery has become the best choice.
Recently, a "Chery in exchange for technology in exchange for 80% of the equity of Southeast Automobile" news circulated on the Internet, although the news has not yet been determined by both sides, but from the perspective of their respective operating conditions, the authenticity of this single cooperation is quite high. However, even if Southeast Auto wants to "save itself", why choose Chery? How will Chery's cooperation with Southeast Automobile proceed? There are many doubts in the outside world about this, and we may as well solve them one by one.
Without the accumulation of core technologies, Southeast Auto travels to the brink of delisting
At the beginning, it was mentioned that Southeast Automobile was once very popular with Mitsubishi Motors, and then lost its competitiveness due to Mitsubishi's withdrawal of shares. So, what is the current situation of Southeast Auto? In 2021, Mitsubishi Motors officially sold its 25% stake to Fuzhou Trading Group. The departure of Mitsubishi has made the development of Southeast Automobile, which is overly dependent on Mitsubishi, even more difficult. In the same year, the annual sales of Southeast Automobile was only 7265 vehicles, and the annual sales of the entire brand were even inferior to the single-month results of one model, which showed its low market position.
Southeast Automobile also resisted, released the brand renewal plan and a new brand LOGO, as well as launched a new model DX9, but in the end it failed to attract the attention of the market, and the new car is still in the concept car stage, and it has not landed for a long time. The decline of Southeast Automobile has also led to successive losses for its parent company, Fujian Automobile Group, and it is unable to "transfuse blood" for it. If Southeast Automobile cannot come up with a complete solution, it will face the dilemma of enterprise retirement and production qualifications being cancelled, and Southeast Automobile's "self-help" is imminent.
For many endangered and delisted car companies, the most "valuable" is the automobile production qualification, Lifan, Huanghai, FAW Huali, Fudi have sold production qualifications to the new car-making forces to pay off debts, but for Southeast Automobile, even if there is a large amount of capital investment, it is still a move to "cure the symptoms but not the root cause".
The "crux" of Southeast Automobile is that there is no accumulation of core technology, and looking at Southeast Automobile's products, the power system basically comes from Mitsubishi Motors. After Mitsubishi withdrew, Southeast also lost its technical support. Therefore, if you want to "rescue" Southeast Auto, you must do it by strategic investors with core technologies.
Unlike the 1990s, Southeast Automobile can no longer introduce overseas brands to maintain its operations. Moreover, with the opening of the joint venture share ratio, overseas brands have gradually become dominant in the joint venture, such as Audi FAW, BMW Brilliance, etc., which is not what Southeast Automobile wants. Therefore, Southeast Automobile has thrown the "olive branch" of cooperation to its own brand, and Chery is regarded as the best choice.
Five years later, with one million units, Jetway urgently needs to expand its production capacity
Chery has always had the title of "Polytechnic Man", with a solid research and development foundation and rich technical precipitation, which is what Southeast Automobile values. Judging from the relevant cooperation information, the cooperation is led by Chery Commercial Vehicles, and the Jietu brand will be responsible for docking in the future.
Jietu is a product sub-sequence launched by Chery Holdings in 2018 and officially became an independent brand in July 2021. Although it has not been established for a long time, the market performance of Jietu is very eye-catching, and it has sold nearly 500,000 new cars in four years, properly becoming the "dark horse" of the industry.
Backed by Chery, Jietu not only has a strong technical background, but also has excellent sales performance, which is enough to promote the Jietu brand to a higher level. At the 2021 Jietu brand night, Jietu Automobile said that it will achieve an annual sales target of 1 million vehicles in 2026.
Chery Group's sales at home and abroad in 2021 totaled about 960,000 vehicles, and the sales volume of the Jietu brand in 2021 was just over 150,000 vehicles, which means that Jietu will surpass the current sales level of Chery Group in five years, and its ambitions are very large.
In order to achieve this goal, Jietu must be laid out in advance to find a breakthrough in upward development, and increasing production capacity is regarded as a key step. Jietu's current plant in Kaifeng has an annual production capacity of 300,000 units, of which commercial vehicles such as Karry New Energy Vehicles account for 100,000 units, while the production capacity attributable to Jietu is only 200,000 units.
It should be known that the investment in completing the production capacity of 500,000 vehicles, 1 million vehicles and 100,000 vehicles is not at all on an order of magnitude, the former challenge is to increase exponentially, and the surge in production capacity demand is not supported by Chery, and Jietu must open up new production channels on its own.
Based on this premise, Jietu looks at Southeast Automobile, which has redundant production capacity, and Southeast Automobile in turn matches Chery's research and development strength behind Jietu, and the two can be described as complementary advantages. In addition, Chery does not have a production base in the south, which will also become a good opportunity for Chery to expand to the south.
Chery "saves" Southeast and will receive 80% of the equity
Chery's cooperation with Southeast Automobile is not sudden, and the precursors of the "linkage" of the two can be seen in some previous activities. Jietu's brand night was held in Fuzhou, and the brand's first hardcore off-road vehicle T-X was released at the same venue, and the T-X model happened to be in the "cooperation plan" circulating between the two. Rather than seeing it as a coincidence, it is more of a sign.
Judging from the "cooperation plan" circulating, the cooperation outline of the two is or will continue to use the main body of Southeast Automobile, jointly operate the Southeast Jietu brand, and strive to achieve the goal of annual sales of 400,000 vehicles within 5 years.
Rumors show that the cooperation between the two will be carried out in three steps. First, in the form of "OEM cars", it will help Southeast get back on track and preserve production qualifications, and then gradually launch new models and expand production capacity, and finally Chery will be responsible for "steering" Southeast Automobile.
In terms of model layout, although the "planning" does not explicitly mention specific models, it is not difficult to distinguish the models from the relevant schematic diagrams. First of all, the "Southeast OEM car based on Chery New Energy Models" mentioned in the first stage should be the "X-3" Tiggo 3xe, which is a "walking volume" electric car positioned for entry. The "southeast model with improved performance" may be the DX7 and DX9.
This is followed by the "modified model", referring to the "X-1" and "X-2", the two models in the picture are jietu dasheng and jietu T-X. It should be noted that Jietu Dasheng will be listed this year, and Jietu T-X will be launched in 2023. This means that Jietu may place part of the production capacity of Dasheng and the full capacity of the T-X model on Southeast Automobile, thereby freeing up the capacity of the Jietu plant to create a new MPV model.
From more than 7,000 vehicles sold annually to 480,000 vehicles, it takes only ten years
Seeing this, there may be friends who will wonder, Chery can have such a good help southeast car "turn over"? Can the power of only two companies start a market size of hundreds of thousands? Of course not.
Chery's cooperation with Southeast Automobile is a bet. According to the plan, after Chery helps Southeast Automobile achieve annual sales of no less than 75,000 vehicles in 2023, Southeast Automobile will transfer 80% of the company's equity to Chery in the first quarter of 2024 without compensation.
The use of the Jietu sales network mentioned in the previous "planning" to sell southeast "OEM cars" requires a corresponding price. For example, Chery charges an adaptive development/export certification fee of 300 million yuan, a logistics subsidy of 0.5 million yuan per vehicle, a sales fee of 10,000 yuan per vehicle, and a cost of 1 billion yuan for the modification of 3 models. In the future cooperation, Chery also needs to charge a certain management fee to Southeast Automobile until Chery "takes the helm" of Southeast Automobile.
In addition to the two enterprises, Fuzhou City will also give certain support, such as bearing the cost of production line transformation, providing corresponding sales and operation support policies for Fuzhou and surrounding cities, undertaking new factory investment, giving corresponding enterprise tax exemptions, etc., to help Southeast Automobile recover.
According to the plan, Chery and Southeast Automobile will achieve annual sales of 430,000 vehicles and cumulative sales of 3.06 million vehicles by 2031. The plan to sell 480,000 vehicles a year in ten years is not outrageous. Of course, the cumulative sales volume of 3.06 million units may seem a bit intimidating, but this is a decade of cumulative sales, and according to Jietu's existing product planning and constantly updated product sequences, this goal is still possible.
Jietu Automobile is the main sales support in Chery Holdings, and in the face of the ever-increasing market competition, Jietu does need to participate in some cooperation to further enhance the scale of production and sales. For Southeast Automobile, embracing Chery, which has core technology, core products, stable sales and good reputation, is the best choice, because these are the most lacking in Southeast Automobile, which can achieve the strengths of people to make up for their shortcomings on Chery.
However, rather than saying that the two are cooperative relations, it is better to see Chery "swallowing" Southeast Automobile, if Chery can "save" Southeast, then Southeast will no longer have the right to dominate in the future. Compared with the direct acquisition of Cheetah and Lifan and the loss of operating rights, Southeast Automobile at least has the possibility of "turning over". In fact, chery's cooperation with Southeast Automobile is not uncommon in the international automotive market, such as Toyota and Subaru, Renault-Nissan-Mitsubishi Alliance, etc. In the context of the domestic auto market, I believe that such "cooperation" will be more and more.