(Image source: Photo.com)
On April 30, LeEco's founder Jia Yueting responded in a video to rumors about its repayment of $10 billion in debt. Jia Yueting made it clear that the claim that he and the company repaid their debts through the FF (Faraday Future) Stock Debt Trust was false and rumored. He stressed that the repayment of more than $10 billion in debt was almost entirely made in cash, and that in the process of repayment, in order to raise funds quickly, a large number of assets had to be sold and auctioned, which were auctioned for much less than their actual value.
Jia Yueting also said: "Not only did not set up the 500 million family trust for the children, but there were no other family trusts. He didn't even give his family any financial assistance other than his salary. He said he may be one of the most rumored Chinese entrepreneurs, but he firmly believes that now is the time to stand up and clarify the facts and defend his rights and interests with legal weapons.
On April 25, Jia Yueting sent a video to respond to everyone's concern about when to return to China and the debt problem, he said that when to return to China is his biggest knot, and the day he succeeds in building a car and repays his debts is when he returns to China. He revealed that he has personally guaranteed about $12 billion in debt for the LeTV system, which is the world's largest personal guarantee case. He said that he had repaid more than $10 billion in total, and that he no longer had any debts under the U.S. legal system.
Jia Yueting said that it is still his darkest moment, and his return to China may be far away. Jia Yueting's road to building a car is not smooth. Faraday Future, the electric car maker on which he had high hopes, recently received a notice from the Nasdaq exchange that it would be at risk of delisting because it did not comply with the listing rules. At present, Faraday Future's stock price is below $0.1, and the total market capitalization is only $1.7837 million. Ten years after building a car, more than 20 billion yuan was burned, but only 11 cars have been delivered so far.
In addition, Faraday Future faced a shortage of funds. In February, the company announced that it needed additional funding to sustain operations. Due to financial constraints, Faraday Future even sold its headquarters building in Los Angeles at a low price. Although the building was subsequently leased back by Jia Yueting, there are still rumors that it is in arrears.
Building a car requires a huge amount of money, and Xiaomi makes a car, with cash reserves of up to 136.3 billion yuan. As we all know, automobile manufacturing is a technology-intensive industry that involves many complex manufacturing and R&D processes. R&D investments often require large amounts of capital and have a long payback period. Automotive manufacturing involves a huge production scale and a complex supply chain. Automobile manufacturers need to build large-scale factories, purchase various raw materials and components, and employ a large number of workers and managers, all of which require huge capital investment. And automotive manufacturing is a high-risk industry. It is necessary to face a variety of risks such as the uncertainty of market demand, the rapid pace of technological change, and the fierce competitive pressure.
Looking back at the automobile manufacturing industry in China:
China has become the largest country in automobile manufacturing
In terms of the proportion of China's automobile production in global automobile production, China continues to occupy the leading position, and its share of production has steadily increased from less than 25% in 2012 to more than 30% in 2021. This significant growth trend may indicate that China is still the world's largest automobile manufacturing country, and the global automobile manufacturing industry is gradually shifting to China. While China's automotive industry continues to expand in scale, it also continues to enhance its global competitiveness and influence.
Automotive electronics account for the proportion of vehicle manufacturing costs
In recent years, with the continuous development of the trend of automotive intelligence and electrification, automotive electronics have been widely used in various automotive fields. Driven by the four major trends of the Internet, entertainment, energy saving, and safety, the level of automotive electronics has been significantly improved, and its proportion in the vehicle manufacturing cost is also increasing. According to forecasts, by 2030, automotive electronics will account for nearly 50% of the total vehicle manufacturing cost.
SAIC VS FAW Group: Automotive business layout history
FAW and SAIC have played an important role in the development of China's automotive manufacturing industry. The FAW Group was founded in 1953, while SAIC Motor followed suit and was established in 1984. SAIC went public in 1996, followed by two subsidiaries of FAW Group, FAW Fuwei and FAW Jiefang, through IPOs in 1997.
Since 2000, both automotive groups have been actively expanding into different areas of the upstream, midstream and downstream of the automotive manufacturing industry through investment. The investment strategies of SAIC and FAW have shown that they attach importance to the comprehensive layout of the automotive industry chain. However, it is worth noting that FAW Group has put more attention into automotive lightweight technology. Between 2010 and 2012, the FAW Group invested in companies focusing on body lightweight technology through equity financing.
Automobiles
fabricateIndustry development trends
From the perspective of the field of new energy vehicles, with the continuous progress of technology and the gradual acceptance of the market, new energy vehicles are expected to gradually replace traditional fuel vehicles in the future and become the leading force in the automobile manufacturing industry. However, in the case of smart cars, despite their promising prospects, they are currently limited by the level of technology. However, with the continuous investment in technology research and development by the mainland, once the technical difficulties are overcome, smart cars are expected to gradually enter the growth period. However, this process is expected to be a relatively long and ongoing effort.
From the perspective of automobile manufacturing enterprises, automobile manufacturing enterprises may choose to go overseas and make up for their own shortcomings in the industrial chain to form a solid industrial position. To sum up, the prospect believes that with the development of new energy and intelligent vehicles, as well as the localization of vehicles and parts, the original automobile pattern will usher in great changes and reshape the existing pattern.
Zeng Qinghong, Secretary of the Party Committee and Chairman of GAC Group, believes that in order to achieve sustainable development of the automobile industry, it is necessary to overcome key technical problems through close cooperation between industry, academia and research. He made it clear that "involution is not a long-term solution, and the automotive industry should reduce internal competition and strengthen collaboration." Zeng Qinghong further pointed out that while pursuing a common goal, the automotive industry should respect and retain its own characteristics, and achieve great coordination, great synergy and great collaboration, in this way, the automotive industry will be able to better play its advantages in the world's leading industrial chain system in terms of standardization and supply chain support.
Wu Songquan, senior chief expert of China Automotive Center and chief engineer of China Automotive Strategy and Policy Research Center, pointed out that new energy vehicles are not only the main direction of the transformation and upgrading of the global automotive industry and green development, but also the key strategic choice for the high-quality development of the mainland automotive industry. In the development process of new energy vehicles, scientific and technological innovation has played a vital supporting and leading role. After years of technical research, Continental has successfully mastered the core and key technologies such as new energy vehicle manufacturing, power batteries, and drive motors, and has opened up the key links of the entire industrial chain from basic materials, parts, manufacturing equipment, infrastructure and services, and built a world-leading industrial chain and supply chain system.
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