Per reporter: Huang Xinxu Per reporter Per editor: Sun Lei
Following the investment of 10 billion yuan in Lixun Precision, Chery has been moving continuously recently.
Recently, a document about Chery's cooperation plan with Southeast Automobile was circulated on the Internet. In the agreement, Southeast Automobile and Chery will form a VAM agreement, the former will exchange 80% of the equity for the latter's "technical support", the two sides will jointly develop, expand the scale of production and sales. In the cooperation, Chery and Southeast Automobile will continue to use the main body of Southeast Automobile, and Chery's Jietu Automobile will play an important role in the cooperation between the two parties, and some of its models will be labeled as southeast automobile's logo ("OEM car") for sale.
In this regard, the Daily Economic News reporter asked Chery and Jietu Automobile insiders for verification, and they all got an "unwitting" reply. "We really don't understand the situation, and the acquisition of Southeast Motors is known only to the core management. But Jietu does have a big sales target next, and there will be a lot of action. A Chery insider, speaking on condition of anonymity, told reporters.
"In recent years, acquisitions between independent brands are not unusual, such as Geely's previous acquisition of Lifan. If the cooperation between Chery and Southeast Automobile is true, it is a thing that is beneficial to the development of both sides. This can help Southeast Automobile revitalize enterprises, and can also provide Chery with automobile production capacity. An automotive engineer familiar with Chery analyzed to reporters.
Is the collaboration real or fake?
According to the cooperation planning data, Chery's acquisition of Southeast Automobile will be divided into three steps: first, Chery will achieve a sales target of 24,000 units in 2022 in the form of "OEM cars", helping Southeast Automobile get back on track and preserve production qualifications; then gradually launch new models and expand production capacity to achieve 75,000 vehicles in 2023; finally Chery will be responsible for "taking the helm" of Southeast Automobile, striving to achieve the goal of 400,000 units per year within 5 years, and completing the construction of a new factory with an annual production capacity of 250,000 vehicles.
A report on the network about Chery's cooperation plan with Southeast Automobile
At present, Chery has not recognized this cooperation, but judging from the recent trends of the two sides, the cooperation has already been hinted at.
On January 10, 2022, the Jietu Brand Night Conference was temporarily adjusted from Chengdu to Fuzhou. Fuzhou is the birthplace of Southeast Automobile. At that time, people close to Jietu once revealed to reporters: "Jietu's 'brand night' is very important, related to the future brand development and planning, there may be key content revealed." However, "Brand Night" temporarily cancelled some of the process due to time issues, and did not publish much important information.
At the "Brand Night", Jetway released the brand's first hardcore off-road vehicle, the T-X. The T-X model is also a planned model that appears in the PPT of Chery and Southeast Automobile's "cooperative planning". In addition, according to the content and pictures of the cooperation plan, the vehicle mentioned in the first phase of the cooperation between the two parties is "X-3" and "Southeast OEM car based on Chery New Energy Model" is Tiggo 3xe. Secondly, the "modified model" of the second phase of the cooperation between the two sides may refer to the "X-1" and "X-2" of Jietu Automobile, the two models in the picture are the Jietu Dasheng, which is scheduled to be launched this year, and the Jietu T-X, which is planned to be launched in 2023.
In addition, some clues to the cooperation between Southeast Automobile and Chery can also be found on the official website of the Fuzhou Municipal People's Government. On October 20, 2021, a site meeting entitled "Accelerating the Standardization of Industrial (Industrial) Parks and Promoting the High-quality Development of manufacturing Industry" was held in Binhai New Town, Fuzhou. At the meeting, the representative of Minhou Qingkou Automobile Industrial Park specifically mentioned: "Close contact with Chery and SAIC, take the initiative to dock with new car-making forces such as Qianye and Niuren, and strive to attract a vehicle project to land." Promote the 'chain length' working mechanism, focus on the three industrial chains such as automobiles, new materials, and electronic information, focus on the 'high-end, key, and scarce' links to accurately attract investment, and promote the high-quality development of the industry. ”
The reporter learned that Fujian Minhou Qingkou Automobile Industrial Park is an automobile production base focused on fujian province and Fuzhou city. This year, the park planned 3,300 acres of land as the land for the new automaker project, and launched a plan called "Spring Thunder Action" to create a 100 billion modern automobile characteristic town.
Southeast Auto needs to be revitalized
According to the content of the cooperation plan, the first phase of chery's cooperation with Southeast Automobile is 2022, chery's new energy models and Jietu Automobile's models labeled with Southeast Automobile logos, with a sales target of 24,000 vehicles, the purpose of which is to preserve the production qualification of Southeast Automobile and activate the enterprise.
"According to the provisions of the state, if the annual output of the enterprise does not meet the standard, it will be suspended or cancelled the production qualification." Otherwise, because of the poor efficiency of these enterprises, they will slowly become 'zombie' enterprises. The automotive engineer said.
Image source: Daily Economic News Infographic
The reporter learned that according to the "Measures for the Administration of Access to Road Motor Vehicle Manufacturers and Products" (Decree No. 50 of the Ministry of Industry and Information Technology) previously issued by the Ministry of Industry and Information Technology, if normal production and operation cannot be maintained, special publicity (suspension/cancellation of qualifications) will be made. If it is necessary to remove the special publicity, it needs to be re-examined in accordance with the access management measures. According to the standard, for a passenger car enterprise like Southeast Automobile, the inability to maintain normal production and operation means that the average annual passenger car production for two consecutive years is less than 2,000 units. Judging from the sales volume of Southeast Automobile, its market performance has not been good in recent years, and the annual sales volume has declined significantly. In 2021, Southeast Automobile sold about 7265 vehicles, down 51.85% year-on-year.
But Southeast Auto, which is in trouble, has been saving itself. In 2021, Southeast Motor carried out the shareholding structure reform led by the Fuzhou Municipal Government and Fuqi Group. Through the reform, the main shareholders of Southeast Automobile were changed to Fujian Automobile Industry Group Co., Ltd., Fuzhou Zuohai Holding Group Co., Ltd., Minhou County Construction Investment Group Co., Ltd., and Warwick Co., Ltd. (British Virgin Islands), with shareholding ratios of 47.3297%, 26.0651%, 21.0806% and 5.5246% respectively. Among them, Fujian Automobile Industry Group Co., Ltd., the major shareholder of Southeast Automobile, is 100% controlled by the State-owned Assets Supervision Commission of the Fujian Provincial People's Government.
"At present, the cooperation between Southeast Automobile and strategic investors is promoted through the Fujian government level. In the first quarter of this year, Southeast Automobile said that it was considering the introduction of strategic investors, and had already docked with domestic car companies and planned to cooperate at the new energy level. At present, this company may be Chery. A person close to Southeast Auto told reporters.
Jetway expansion requires capacity
If the ownership of Southeast Automobile is true, it will be part of Chery's strategic expansion. Chery has set a sales target of "ensuring annual sales of 1.5 million vehicles and striving for 2 million units" in 2022. Among them, Jietu Automobile has proposed an annual sales target of 200,000 vehicles in 2022, 400,000 vehicles in 2023, and 1 million vehicles in 2026, of which the Chinese market sales target is 700,000 vehicles and the export sales target is 300,000 vehicles.
However, at present, the main production base of Jietu Automobile is Chery Kaifeng Plant, which has an annual production capacity of 300,000 vehicles. With the increase in the sales target of Jietu Automobile, the production capacity of Jietu Automobile needs to be expanded urgently. Therefore, chery's cooperation with Southeast Automobile has also been interpreted by the outside world as Chery looking for new production capacity for Jietu Automobile to achieve sales targets. In fact, in the cooperation planning, it is also mentioned that the second stage of cooperation between the two sides will be southeast automobile to OEM for Chery.
Image source: Per reporter Huang Xinxu photographed (data map)
In addition, during chery's cooperation with Southeast Automobile, Chery can also obtain related fees. It is reported that Chery will import Chery new energy and Jietu models into Southeast Automobile to become "OEM vehicles", and Southeast Automobile needs to pay a certain fee to Chery when it uses the Jietu Automobile sales network to sell Southeast's "OEM vehicles". Specifically, Chery charges 300 million yuan in adaptive development/export certification fees, 0.5 million yuan in logistics subsidies per vehicle, 10,000 yuan in sales costs per vehicle, and 1 billion yuan in 3 model modification costs. After the cooperation, Chery also needs to charge a certain management fee to Southeast Automobile until it enters the third stage of Chery "helming" Southeast Automobile. However, for the above news, Chery and Southeast Automobile have not confirmed.
In fact, for Southeast Auto, which has underperformed financially, it is not easy to solve the problem of funds. According to some of the financial information of Southeast Motor previously disclosed by Zhonghua Automobile, from 2010 to 2020, southeast Automobile's total loss was about 1.134 billion yuan. However, just after the above-mentioned equity reform of Southeast Automobile, the provincial, municipal and county governments where Southeast Automobile is located injected 2 billion yuan into Southeast Automobile through related companies to initially solve its financial problems.
At present, chery's cooperation with Southeast Automobile has not been officially announced, and how to complete the sales of 400,000 vehicles after the real landing, and how to complete the sales target of 3.06 million vehicles in the next 10 years, these tasks are extremely challenging.
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