Recently, GAC Group announced the March production and sales express.
According to the data, in March 2022, GAC Group produced 227,600 vehicles, an increase of 24.4% year-on-year; sold 227,500 vehicles, an increase of 30.7% year-on-year, and the growth rate of production and sales exceeded 40% month-on-month. From January to March, the company produced 598,100 vehicles, an increase of 25.0% year-on-year, and sold 608,200 vehicles, an increase of 22.5% year-on-year.
In this regard, Huaxi Securities pointed out that the overall performance of GAC Group continued to rise in the monthly sales center, and the joint venture continued to increase the strength of its own products, and gave GAC Group a buy rating.
Poor sales
However, GAC FCA's market performance in March was the complete opposite of GAC Group's.
GAC FCA Jeep sold only 1 vehicle in the month, a sharp drop of 99.96% compared with 2523 units in the same period last year. Previously, GAC FCA's production and sales in February 2022 fell by more than 90% year-on-year, with sales of only 134 vehicles, while production was only 35. From January to March this year, the cumulative sales volume was 1860 vehicles, down 75.29% year-on-year.
In response to the reasons for the sharp decline in GAC FCA's sales, the official response said: GAC FCA Changsha plant production line transformation work is still in progress due to the impact of the epidemic, at the same time, due to the shortage of chips, import shipping cycle length and other factors, in order to ensure vehicle quality and normal delivery, the factory production plan had to make corresponding adjustments. At present, the company's operating conditions are normal, the transformation of the production line is in a steady and orderly manner, based on the advance judgment of the situation, the sales of retail products are not affected.
According to official information, GAC Fiat Chrysler Automobile Co., Ltd. (hereinafter referred to as GAC FCA) was established on March 9, 2010, jointly invested and constructed by GAC Group and Stellantis Group in a 50:50 share ratio, with a total investment of about 17 billion yuan, and its main business covers the research and development, manufacturing, sales and after-sales service of passenger cars, engines and parts. Headquartered in Changsha National Economic and Technological Development Zone, Hunan Province, the company has a vehicle production capacity of 164,000 units, an engine production capacity of 488,000 units, and nearly 2,000 employees.
According to public information, GAC Fiq, formerly known as GAC Fiat Automobile Co., Ltd., had a net asset of 506 million yuan at the end of 2014. In 2015, GAC Group increased its capital by 1.2 billion yuan to GAC FCA by share ratio, in 2016 GAC Group increased its capital by 600 million yuan by share ratio, and in 2017, GAC FCA's net assets peaked at 4.422 billion yuan.
In 2017, before the stellantis merger, PSA and FICO Group had three joint ventures in China, namely DPCA, GAC FCA and Changan Peugeot Citroën, with a total production capacity of about 1.5 million units.
In 2017, GAC FCA's sales peaked at 205,000 units, and since then it has shown a cliff-like decline. In 2020, GAC FCA sold only 40,000 cars and was insolvent, with net assets falling from 1.336 billion yuan at the beginning of the year to -331 million yuan. In 2021, GAC FCA sales fell further to 20123 units.
The share ratio is undecided
GAC FCA also reported a stock ratio adjustment.
According to the first financial report, GAC Group insiders said that in the first quarter of 2021, Stellantis and GAC Group launched negotiations on the adjustment of the stock ratio, and there were preliminary results in the third quarter of last year. During the negotiation process, GAC FCA began to dispose of its assets and reduce corporate debts, including transferring the special production equipment of GAC FCA's Guangzhou plant to the Changsha plant, and selling welding equipment, robots and other general equipment and venues to other joint ventures of GAC Group.
On September 8, 2021, Stellantis Group issued a statement saying that GAC FCA's plant in Guangzhou, Guangdong Province, was closed only to its plant in Changsha, and the reason for the plant's closure was that the capacity utilization rate was too low and the factory production line was aging.
GAC Group released information that GAC FCA Guangzhou plant will complete the transfer of major production line equipment to changsha plant in 2021, and other assets will be disposed of by classification; by March 2022, it will complete the cancellation of "GAC Fiat Chrysler Automobile Co., Ltd. Guangzhou Branch". Prior to this, GAC FCA had two vehicle plants with an annual production capacity of 164,000 units at its Changsha plant and Guangzhou plant, as well as an engine plant with a total production capacity of 328,000 units, with a capacity utilization rate of only 6% in 2021.
In late January, the Stellantis Group's official website announced: "It plans to increase its stake in the joint venture GAC Fiat Chrysler Automobile Co., Ltd. from the current 50% to 75%. ”
On the evening of January 27, GAC Group issued an announcement that the company paid attention to the official website of Stellantis Group on the same day: "It plans to increase its shareholding in the joint venture GAC Fiat Chrysler Automobile Co., Ltd. from the current 50% to 75%. "This is hereby explained.
GAC Group pointed out in the relevant explanation that in recent years, due to the great difficulties in the operation of GAC FCA, 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, and at present, the two sides have not signed a formal agreement on the adjustment of gac FCA's equity.
However, in the eyes of industry insiders, according to the current development trend, the stock ratio adjustment of GAC FCA may have become a fixed number, but it is only a matter of time sooner or later.