Recently, GAC Group released production and sales data for March this year, which showed that GAC Group achieved production of 227,600 units, an increase of 24.4% year-on-year, while automobile sales were 227,500 units, an increase of 30.7% year-on-year. However, at a time when the group was soaring, GAC FCA, which once wanted to dominate the mainland SUV market, sold only 1 vehicle in a single month in March, and it has been completely marginalized. How can Fiat Chrysler, which dominates the world with SUVs, be in a slump today?
First look at the product lineup, GAC FCA's main products include GAC FCA JEEP Commander · PHEV, Guide and Free Light, but with the product lineup release unfavorable, GAC FCA sales this year compared to 2021 plummeted. At the end of January, Fiat Chrysler's parent company, Stellantis Group, announced plans to increase its stake in GAC FCA to 75%, but GAC later denied it.
GAC said that due to the large differences between the shareholders of the two sides on the business path, the two sides still have not reached an agreement on the development of the future joint venture car company, which has also indirectly led to the suspension of GAC FCA. On the other hand, GAC Group is also investing more resources in its autonomous sectors, including GAC Trumpchi and GAC Aean.
In 2021, GAC Aean achieved explosive growth. Production reached 121,400 units, up 102.51% year-on-year, and sales totaled 120,200 units, up 101.8% y/y. GAC Aeon's sales accounted for 84% of the Group's new energy vehicles. At present, major car companies regard new energy vehicles as a major development plan for the future, and such a high proportion of sales will further promote GAC to tilt resources to EIAN.
In addition, for the group, the soaring production and sales of its new energy vehicle business can also contribute to the valuation of the subsidiary. Take Avita, a subsidiary of Changan Automobile, for example, the latest valuation of Avita has reached 6.26 billion yuan, which also allowed Changan to achieve an investment income of 2.13 billion yuan in the first quarter. GAC Aeon is also currently in the mixed reform stage, if Aeon's production and sales can continue to grow, then gac Aeon's valuation will also rise.
On March 17, GAC Group announced that it had completed a financing of 2.566 billion yuan. After the completion of this financing, GAC will choose the opportunity to let Aeon conduct an IPO. At present, after the completion of this round of financing, the valuation of GAC Aeon has reached 39.2 billion yuan, and the current market value of GAC Group is still hovering at the mark of 100 billion yuan, which means that the valuation of the EON family has almost supported nearly 40% of GAC's market value.
From the perspective of capital operation, investing resources to support joint venture car companies has become an uneconomical choice, especially for already marginalized brands. Changan Group wisely exited Changan Suzuki and integrated Mazda's business with FAW Mazda. Dongfeng Motor Group ceded control of the joint venture company Dongfeng Yueda Kia to the joint venture car companies, and weak joint venture brands such as GAC E-An and GAC Mitsubishi may also end up in the future.
Judging from the current trend, the former joint venture brand is gradually being snubbed by a new generation of consumers, and the independent sector is accelerating its rise. If overseas car companies do not carry out drastic reforms to their business in China and do not introduce more sincere models, it will only be a matter of time before they are eliminated by the market. Ford is a clear proof, after the loss of business in China in 2018, Ford accelerated the integration and launch of electric Mustang, Ford Lingrui and other new models, in one fell swoop to achieve the rise of business in China, but Mitsubishi, Mazda and other car companies performed dismal. All in all, independent car companies have ushered in a new era, and independent car companies need to take advantage of the east wind of new energy vehicles to accelerate the promotion of new products to attract consumers, which is the way to win.