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Selling real estate and equity, and actively contracting are not the best solution for marginal car companies to turn around.
Written by | Tabornet one light-year
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Soon after the beginning of 2022, car companies were caught off guard.
The shortage of chips and the rise in raw material prices are not only difficult to alleviate, but also have a tendency to become more and more intense. Most car companies have declined in sales and have to raise prices. Under the impact of the new round of the new crown epidemic, many supply chain companies have also suffered a decline in output, and Shanghai factories such as Weilai and SAIC Volkswagen have been shut down for a time, and the nerves of the industry are tense.
In April, many car companies such as Yundu Automobile, Hanteng Automobile, and Borgward Automobile were exposed to stop production or were exposed to bankruptcy and reorganization, facing the moment of survival. The living environment of car companies has been squeezed more and more narrowly, and the strong still grit their teeth and insist in this round of knockouts, and the weak who have been marginalized will inevitably be eliminated.
Natural selection allows the fittest to survive.
Car companies have stopped production and gone bankrupt
"The people sent by JuneYao have taken office, taken over Yundu Automobile in its entirety, and also dug up a technical team from a leading car company."
On April 27, CBN news, a person close to Yundu Automobile revealed that JuneYao Group will acquire more than half of the shares of Yundu Automobile, become the actual controlling shareholder, and make corresponding industrial and commercial changes when the epidemic slows down.
Although this news has not been confirmed, the shareholders of Yundu Automobile have already issued an announcement to break up their relationship with it. On April 12, Haiyuan Composites issued an announcement that the company would transfer 11% of the shares held by Yundu Automobile to Zhuhai Investment for a transfer price of 22 million yuan. After the completion of the transaction, the company no longer holds the equity of Yundu Company.
Yundu Automobile, which confidently shouted that "it will be among the top three domestic pure tram brands in 2025", is now uncertain.
In the first half of 2022, China's auto market has entered a downward trend, whether it is a new car-making force or a traditional car company, it has changed the past "a hundred flowers blooming" situation. In this context, research and development, products, etc. lack core competitiveness, and car companies that are regarded as weak are gradually marginalized. In April, it was exposed that the unsustainable car companies were far more than Yundu Automobile.
On April 19, a person close to Hanteng Automobile broke the news: "Hanteng Automobile has notified internally that the company will complete bankruptcy and restructuring before the 25th of this month. The first phase of Hanteng Automobile's factory will also be sold to Great Wall Motors at a low price. "
The authenticity of this news, the relevant competent departments of Shangrao City did not give a reply. The relevant staff of Great Wall Motors said, "At present, we have not received relevant news, and we will implement it as soon as possible." "
The public is not surprised by this unanswered news, and for two years, Hanteng Automobile has been constantly exposed to the news that it is struggling to survive.
In August 2020, Hanteng Automobile employees exposed that the company was in arrears of wages, and later reported negative news such as unpaid suspension of work, factory suspension, and mortgage of production equipment. Later, there was also news of the reorganization of Hanteng and Aichi, but there has been no latest progress.
In June 2021, Great Wall announced that Great Wall Motor's vehicle and parts production base project was officially settled in Jiangxi Shangrao Economic and Technological Development Zone. At this point, Great Wall Motors completed the takeover of the second phase of Hanteng Automobile's factory. However, at that time, Hanteng executives had said that Great Wall Motors only funded the purchase of the second phase of Hanteng Automobile's factory and equipment in the factory, and did not participate in the restructuring of Hanteng Automobile.
The news about the above two car companies has not been officially confirmed, and there is still a first-line return to life. But the bankruptcy and restructuring of Borgward Automobile is already a foregone conclusion.
In early April, Beiqi Foton announced that it had submitted an application for bankruptcy liquidation to the Beijing No. 1 Intermediate People's Court on April 8. On April 22, Beiqi Foton issued another announcement saying that the Beijing No. 1 Intermediate People's Court had ruled to accept Beijing Borgward's bankruptcy liquidation application.
At the same time, the Beijing No. 1 Intermediate People's Court also announced the reasons for accepting the above application, Beijing Borgward cannot pay off its debts as they fall due, and the audit report shows that its assets are insufficient to pay all its liabilities, and Beijing Borgward is a bankrupt eligible entity and has already had bankruptcy reasons, so this court should accept Beijing Borgward's bankruptcy liquidation application.
The car brand, which calls itself the "Ashkenazi Top Four BBAS," is about to face a delisting process.
The plight of marginal car companies: far more than a decline in sales
"With the acceleration of new energy vehicles, the competition in China's fuel vehicle market will become more intense, and there are 85 brands in the traditional fuel vehicle market in 2021, of which 34 brands have monthly sales of less than 1,000 units, and 9 brands have died."
At an automotive industry forum at the end of March, Zhu Huarong, secretary of the party committee and chairman of Changan Automobile, predicted that 80% of China's fuel vehicle brands will be "shut down and turned" (that is, closed, stopped, merged and transformed) in the next 3-5 years.
In 2021, many car companies have left the market with regret. Brilliance Auto, Zotye Automobile, Sailin Automobile, Byton Automobile, Bojun Automobile and other car companies have bid farewell to the market stage in this year.
Marginalized car companies are facing the same dilemma. At the same time as sales decline, capital shortages, product shortages, slow development of new energy, and loss of core competitiveness have become common problems for many third-tier car companies.
A number of new energy vehicle companies such as BYD, Weilai, Xiaopeng, Ideal, and Nezha Automobile have achieved a substantial year-on-year increase in sales of 3 digits in 2021, with outstanding performance.
However, according to the data of the Association, in 2019 and 2020, Qoros sold 22,200 and 12,100 vehicles respectively (some data showed that it was 13,600 units). By 2021, Qoros sales were once again slashed, with only about 5,200 vehicles, and by December, Qoros' sales were only 66.
Kaiyi Automobile sold 33,300 units in 2020, and by the first half of 2021, it will begin to suffer a miserable decline, with a total sales volume of 8851 units and a capacity utilization rate of only 11.8%.
In 2019 and 2020, Southeast Automobile's annual sales were 30,000 and 15,000 units, respectively, and in 2021, Southeast Automobile's annual sales were only 7,265 units, a year-on-year plunge of 51.85%.
In 2021, Mitsubishi Motors fully withdrew from Southeast Motors, and without the technical endorsement of Mitsubishi Motors, Southeast Motors was difficult to move. Since its establishment, Southeast Automobile has been using Mitsubishi engines, relying too much on external technology without its own core technology, and seriously lacking technical reserves and independent research and development capabilities.
It is good to be cool with your back to the big tree, but one day the tree falls, and the monkeys can only scatter.
How should marginalized car companies save themselves
The first task of third-tier car companies is to achieve self-help and survive in the hot market environment.
Rather than disappearing into the torrent of the times, most of the third-tier car companies that are actively self-help have chosen to give up their souls and oem jobs for technology giants.
In the past two years, the domestic second-tier car company Jianghuai Automobile has gradually declined, and has been technically thrown away by car companies such as the Great Wall and BYD, and the pricing and configuration of its newly released models are not competitive. Unexpectedly, the OEM Weilai Automobile has become the highlight of the car company's recent years.
In April 2016, NIO and JAC Automobile signed the "Manufacturing Cooperation Framework Agreement", and JAC Automobile built a separate factory for NIO and established an all-aluminum body production line.
Relevant statistics show that in the past three years, Jianghuai Automobile has successively received "compensation" from Weilai for 126 million yuan, 207 million yuan and 0.65 billion yuan respectively, with a total of 398 million yuan in three years. Combined with the number of vehicles produced by Weilai OEM during the period, the average each vehicle jianghuai automobile can get more than 10,000 yuan in foundry fees and about 6,000 yuan in loss compensation.
Some institutions predict that with the continuous growth of WEI's annual sales, Jianghuai Automobile's "OEM" income alone is expected to reach more than one billion yuan a year.
In addition, Haima Automobile has also worked for Xiaopeng; Changjiang Automobile has established the Yangtze River Passenger Vehicle Company through a joint venture to produce new energy vehicles for the new energy vehicle company Zero Run Automobile; Cheetah Automobile Changsha Factory is geely OEM and managed by Geely Automobile.
Entrusting one's own survival to others can hardly ensure that there will be no phenomenon of one prosperity and one loss.
In January this year, Weilai's monthly sales unexpectedly fell below 10,000 vehicles, an increase of only 34% year-on-year, not only by BYD, GAC, Xiaopeng and Ideal, but also by second- and third-tier brands such as Nezha and Zero Run.
In addition, compared with fuel vehicles, new energy vehicles are more vulnerable to the impact of the supply chain epidemic. Due to the concentration of suppliers in the places where the epidemic was frequent in this round, NIO was shut down in April.
On April 15, Anhui Jianghuai Automobile released the first quarter of this year's public announcement, with a loss of 307 million yuan, which is the first time that Jianghuai Automobile OEM Weilai has lost money in three years.
In the end, Changjiang Automobile was declared bankrupt and liquidated by the Yuhang District People's Court of Hangzhou City due to poor business operation; Xiaopeng Automobile built its own factory, and Haima had to find another way out.
In addition to OEM for others, selling equity and real estate is also a helpless move for marginal car companies.
In early February 2021, Haima Automobile announced that its holding subsidiary, Haima Finance, intends to sell its 7% stake in Hainan Bank to China Railway Investment for 329.7 million yuan.
In fact, since April 2019, Haima Automobile has successively sold more than 300 properties of the company in Hainan, Shanghai Pudong and other places, and then sold 30% of the equity of Haima Property, and sold Haima R&D as a whole.
According to statistics, Haima sold houses and stocks, with a total of about 1.63 billion yuan in exchange. With the remittance of this part of the funds, Haima was able to revoke the delisting risk warning, and the abbreviation of securities was changed from "*ST Haima" to "ST Haima".
In December 2019, some media learned of Cheetah Motors' emails to subsidiaries and suppliers, which showed that Cheetah Motors had fully announced its self-help plan. In the face of severe survival challenges, Cheetah Auto's self-rescue activities involve fundraising, debt-to-equity swaps, and changes in land resources.
In terms of fund raising, the SASAC, Changsha City and Yongzhou City jointly raised 1 billion yuan of funds in the early stage (SASAC 600 million, Changsha 300 million, Yongzhou City 100 million), and the follow-up can be expanded to 5 billion if the development needs. At the same time, the implementation of debt-to-equity swaps, increase Changfeng's net assets, improve financing capabilities, and reduce financial costs.
For marginalized car companies, selling assets may be able to exchange for emergency funds and solve the urgent need for capital breakage, but it is by no means a long-term solution.
Survival of the fittest is the law of survival. In the context of the staged depression of the automobile market, there is not much time left for weak car companies to reverse the predicament. After a round of washing in the market, those who can stay in the arena will be strong, and the future of the car market will be better than the past.
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