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On May 31, Shanghai Automotive Group Co., Ltd. (hereinafter referred to as SAIC) and Iveco reorganized Chongqing Hongyan Automobile Co., Ltd. (hereinafter referred to as Hongyan, Chongqing) and settled.
According to the latest news on June 1, Shanghai Automotive Co., Ltd. (hereinafter referred to as “Shanghai Autoâ€) plans to invest 210 million yuan in the next five years to establish a commercial vehicle technology center. The news said that as the first commercial vehicle research and development institution of SAIC, the technology center will be responsible for the development of the vehicle.
These two things indicate that SAIC Motor, which has been the leader of China's automobile industry, has acquired Ssangyong in the field of passenger cars and launched Roewe, and has since expanded its short-term project, commercial vehicles.
SAIC insiders told Caijing Shibao that commercial vehicles are one of the highlights of the “Eleventh Five-Year Plan†of SAIC Motor. In order to speed up the construction of a new system for commercial vehicles, SAIC Motor Co., Ltd. has clearly defined the strategic layout of “one big and one smallâ€: “a small one†refers to the continued development of mini vehicles: “big one†refers to the active development of heavy vehicles.
Heavy truck temptation
In the Northern New Area of ​​Chongqing, the construction of the heavy truck production base of SAIC Iveco Hongyan Automobile Co., Ltd. is being carried out in full swing here. This vehicle project was approved by the National Development and Reform Commission in mid-April.
According to a plan previously announced by SAIC, the base will be officially put into production in 2008, and the annual production capacity of the entire vehicle will reach 40,000. According to relevant responsible persons, the project will not only meet domestic demand but also gradually expand its share of the international market.
SAIC's plans in the commercial vehicle sector show its current confidence in China's commercial vehicle market. In the face of the temptation of China's heavy-duty truck market, SAIC seems to have no choice.
According to data from the China Association of Automobile Manufacturers, China’s commercial vehicle sales exceeded the 2 million mark for the first time in 2006, climbing to 2.04 million, an increase of 14.23% year-on-year. Among them, the annual increase in sales of heavy trucks was the highest, with cumulative sales of all types of heavy trucks reaching 307,296 units, an increase of 31% year-on-year.
In China's current heavy-duty truck market, Dongfeng has Tianlong heavy trucks and FAW has liberation heavy trucks. Apart from Dongfeng and FAW, there are companies such as China National Heavy Duty Truck and Foton Motor. These companies have almost carved out All profits from China's high-growth heavy truck market. In the heavy truck market, both Sinotruk and Foton Motor increased by more than 30% in 2006.
This makes SAIC feel scared. As the second largest automobile company in the country, although SAIC also has heavy-duty trucks, its performance is far from SAIC's identity.
The products of SAIC Heavy Truck mainly come from Shanghai Huizhong Automobile Manufacturing Co., Ltd. (hereinafter referred to as "Shanghai Huizhong")'s "land fleet" series of brands. Shanghai Huizhong was established on January 11, 1992. It is a subsidiary of SAIC Motor. It purchased South Korea's SsangYong heavy-duty truck production line in 2001 and positioned the heavy-duty truck model at more than 15 tons. It is SAIC's heavy-duty vehicle market. The main enterprise.
However, since the company's annual production capacity of heavy vehicles is only 6,000, even if the production capacity is completely absorbed by the market, the annual sales of SAIC heavy trucks is only one-tenth of the figure for China National Heavy Duty Truck. As a result, SAIC Motor’s desire to find a “new love†for heavy trucks is particularly urgent for the commercial vehicle market.
SAIC's chess game
After several unsuccessful contacts with Isuzu, the high-level government officials and senior executives took advantage of the fact that SAIC Motors finally teamed up with Iveco to finalize the reorganization of Hongyan Motors. SAIC Motor hopes that Hongyan will be able to expand its commercial vehicle sector and comprehensively upgrade SAIC's overall strength.
As the "new member" of SAIC's heavy truck business, the background of Hongyan Automobile is not simple.
Chongqing Hongyan Automobile was established in January 2003. It was initially invested by CNHTC, Delong International Strategic Investment Co., Ltd. (hereinafter referred to as “Delongâ€) and Hunan Torch Investment Co., Ltd. (hereinafter referred to as “Hunan Torchâ€). Formation. After that, Heavy Trucks gradually recovered the company's equity from Delong and Hunan torchbearers and became the controlling shareholder of Hongyan Auto.
At present, Hongyan Automobile owns two brands, Red Rock and Steyr. Its heavy trucks have a load capacity of 5-60 tons. Through the cooperation with the Hunan Torch and Delong and the development in recent years, Hongyan Automobile has formed a good industrial foundation and a relatively stable market position in the heavy truck industry. In addition, the development strategy of the country’s “Developing the West†and the resulting policy preferences have also increased its bargaining power with SAIC and Iveco.
However, in addition, SAIC shares clearly have a deeper level of consideration.
From a geographical point of view, Shanghai Huizhong is located in the middle and lower reaches of the Yangtze River in East China, while Hongyan Automobile is located in the western city of Chongqing. Based on these two heavy truck production bases, SAIC Heavy Trucks can simultaneously cut heavy trucks into the Western Development and Eastern Containerization. In the market, the scale of production and sales of heavy trucks will be quickly expanded.
At the same time, SAIC Motor, one of the “regular forces†in the Chinese automobile market, has also achieved the unification of its own brand and overseas exports in the layout of its commercial vehicle business.
There have been SAIC high-level sources that even if the future of SAIC shares acquired other heavy truck companies, will not give up building Shanghai Huizhong commercial vehicle brand efforts. It seems that SAIC Motor does not plan to integrate Huizhong and Hongyan for the time being. According to the plan of Chen Hong, president of SAIC, Shanghai Huizhong and Hongyan are both responsible for the independent brands of SAIC's commercial vehicles. However, Huizhong is more focused on the expansion of the domestic market. Hongyan focuses on the expansion of SAIC's commercial vehicle overseas market.
Li Chunbo, an automotive analyst at CITIC Securities, believes that there are at least two options for SAIC to develop heavy trucks. One is to build a new company and the second is to use existing companies to restructure assets. "Comparing the two, it is obviously more convenient to reorganize them," said Li Chunbo.
So far, through the implementation of a series of events including the transfer of Shanghai GM and Shanghai Volkswagen joint ventures, the establishment of SAIC Motors, SAIC Motor’s joint efforts with Iveco to reorganize Hongyan Auto, SAIC Motor’s development strategy has gradually become clear: it has received Shanghai. Following Shanghai Volkswagen, Shanghai GM and some of its core parts and components companies, SAIC Motor will lead the joint venture of passenger vehicles. As the “backing†before the two, SAIC Motor’s main focus will be on SAIC Motor’s commercial vehicle business.
There are doubts
It seems that everything is ready, but there are still many uncertainties in the things actually placed in front of SAIC, and its R&D capital of RMB 210 million invested in the commercial vehicle field has also been questioned by the industry. "Shangqi has invested too little in technology research and development, and this money has to be invested separately for 5 years. It can't do anything." An industry analyst said bluntly.
Li Chunbo believes that the reason why SAIC invested very little in heavy trucks is because SAIC's industrial base in this area is relatively weak. "Shangqi does not have a strong foundation in commercial vehicles. It is not normal for it to invest too much," said Li.
Auto analyst Zhong Shi believes that the heavy-duty truck market is affected by the country's policies. The country usually has more restrictions in terms of emissions, and various regulations and policies have also been introduced. Although the current situation of the heavy truck market is good, once the national macro-control policies change, the heavy truck market will be directly affected. From this perspective, it is worrying that SAIC's investment plan will bring about great results after five years.
In addition to the issue of R&D capital, another challenge that SAIC faces in the commercial vehicle sector is its capacity issue. In the face of such competitors as FAW, Dongfeng, CNHTC and Futian, the problem of low capacity planning for SAIC's commercial vehicles is also prominent. “The annual production capacity of the Hongyan heavy truck production base under construction is only 40,000 vehicles. Last year, the annual sales volume of China National Heavy Duty Truck reached 60,000 units. In the long run, this gap in production capacity will inevitably compete with SAIC Motor’s market. Forces form constraints." Li Chunbo said.
In addition, SAIC also had to face the problem of homogenous product competition. After this restructuring project begins operation, many of Hongyan’s heavy truck brands will co-exist at the same time. In the annual production of 40,000 vehicles at the production base, the original Iveco vehicles are 4,000, and the mixed vehicles are Iveco and Hongyan. 26,000 vehicles and 10,000 Hongyan vehicles. According to this product layout, the products of Iveco, Huizhong, and Hongyan will overlap, and SAIC still needs to refine its product classification.
Zhong Shi believes that under the influence of various uncertainties, it is still too early to comment on the impact of SAIC on the heavy truck market and the prediction of competition between SAIC and heavy trucks such as FAW and Dongfeng. "This is just a start. It needs further development." Zhong Shi said.
View related topics: SAIC commercial vehicle expansion