Is it difficult for the autonomous “enterprise” to transform?


Unlike Chery, Geely and other independent brands directly entering the field of cars, commercial vehicle companies such as JAC and Great Wall have chosen different development paths, first developing blank industries such as SUVs and MPVs, and then cutting into the car market. There are many similar companies, Futian, Liuzhou, Shuanghuan, Changfeng, Zhongtai and a group of car manufacturers with more than 10 years of experience in making cars, have entered the car market as a strategic transformation of the company's goals.

The transition of commercial vehicle companies to the passenger vehicle market is also regarded as a major feature of the Chinese automobile industry. Dongfeng and FAW Group have also developed from commercial vehicles. The difference is that they rely on mature brands and best-selling models of joint ventures. The policy was also relatively loose at that time. Now, under the background of fierce market competition and structural overcapacity, The situation facing commercial vehicle companies entering the car market is much more severe than that of FAW and Dongfeng. Regardless of the products they launched, there was only one problem first placed before them. They got the NDRC's car production catalog and obtained the car production qualification.

"Establishment permits"

When JAC had not received the Production and Reform Commission’s sedan production license, the industry had already circulated several versions of how JAC responded to the “difficulty” of cars, or made shells or made shares with Chery, or produced mid-size cars. In the high-end market, Jianghuai Automobile won't get a “certificate of approval” for the car one day. The suspicion of the JAC sedan project will not stop.

Although these statements eventually came to an end after the JAC sedan project was approved by the National Development and Reform Commission in January this year, the issues exposed were worth our deep thinking. Because this is the last two years, after Lifan Motors has obtained the “life permit”, the National Development and Reform Commission issued the only license for the production of cars for companies entering the car industry.

After Jianghuai Automobile, which other company is likely to obtain car production qualification? Many in the industry have speculated that it is Great Wall Motors. However, when Great Wall Motors gets permission from the National Development and Reform Commission, even Great Wall Motors will not be able to tell itself. “We have no problem qualifying for a car production” and “Great Wall Motor fully meets the policy requirements of the national car”.

“Under the backdrop of overcapacity and structural overcapacity, talking about access to car production qualifications is indeed a very sensitive issue.” Hezeguo, deputy director of Shuanghuan Automobile, was reluctant to talk too much about double rings when interviewed by the China Economic Times. "Little aristocrats" applied for access to car production.

This was already expected by the reporter. When Lifan and Jianghuai did not receive approval from the National Development and Reform Commission, the China Economic Times reporter also interviewed the two companies. From the very beginning, "We passed the qualification certification of the National Development and Reform Commission." The three-in-one, "I do not want to talk about access to cars."

Autonomous car enterprises "deformed forced palace"

“Great Wall Motors has been targeting the car market since 2004 and has invested RMB 2.8 billion for this purpose. It has invested more than RMB 600 million in research and development, and has invested more than RMB 2 billion in other preparations including production facilities and parts and accessories. In the interview with this reporter, Great Wall Motors’s Minister of Commerce Shang Yugui said: “Great Wall Motors' investment has met the requirements of the National Development and Reform Commission, and profits have also increased year after year. It is certain that we can get the Development and Reform Commission’s car production catalog.”

But even so, still let the industry doubt the Great Wall Motor. The approval of the Lifan and JAC sedan projects did not go smoothly. Although they eventually got the NDRC's car production qualifications, Lifan was a few months later than he had expected. Jianghuai was late for almost a year and had to be scheduled. The model was postponed for sale.

Lifan is a newly-entered automobile company. According to the threshold set by the National Automobile Industry Policy, the total investment of new projects is not less than 2 billion yuan, of which the company’s own funds are not less than 800 million yuan, and product research and development should be established at the same time. Institutions, and the investment must not be less than 500 million yuan.

JAC is a strategic transition enterprise. According to Article 47 of the "Automotive Industry Policy," it is an investment project for the production of other auto vehicle products across product categories. The total amount of the project includes the use of existing fixed assets and intangible assets, etc., which shall not be less than RMB 1.5 billion. .

In other words, if a company tries to enter the car market, it must first invest large sums of money without any profit. Lifan has already invested more than 900 million yuan when it failed to get a car production permit. The first phase of the 300-acre project has been completed. The four major production lines for stamping, welding, painting and assembly have been installed and commissioned. Hundreds of sets of molds have already been installed. In place; as early as 2004, Jianghuai Group held a construction ceremony for the car base. By the time it got the “Establishment Permit”, the fund invested has reached 1.8 billion.

Lifan boss Yin Mingshan once compared this kind of situation to a crazy gambler behavior. Due to delays in approval, companies have to watch hundreds of millions of assets idle every day, investing more than 300,000 yuan per month to maintain basic operations. For some self-owned enterprises, billions of dollars of funds are all of them. At the very beginning, they pushed themselves to the edge of the precipice, and obtaining a “skilled card” means living. There is no other way out.

Even some related people pointedly analyzed that the sedan project of enterprises is basically a method of “forcing a palace” in disguised form. By applying for a production license, it is necessary to invest heavily in the production line, causing a fait accompli and forcing the relevant national administrative departments to Due to social considerations, they have to be approved. Few companies will consider the issue of rationality of capital investment. They only have one idea and spare no effort to get the NDRC's car production qualification.

Who has stopped the threshold?

A few years after China's accession to the WTO, the rapid development of China's auto industry, and the rapid increase in the growth rate of millions of cars, is driven by high profits. Domestic and foreign capitals have entered the auto industry, and investment has obviously shown signs of overheating. Therefore, the relevant state departments hope that Foreign investment is prudent, and a new "Automobile Industry Policy" has been issued for this purpose.

“Industry policies have significantly increased the access threshold for automobiles, especially for cars.” Regarding the requirements for making cars in the automobile industry policy, Great Wall Motors Yu Gui spoke with the reporter about some opinions. “The car approval process clearly puts forward the autonomy of enterprises. Development policies place R&D at an important position. In addition, capital investment and profit requirements have also increased. This is the basic requirement for independent companies to enter the field of cars."

According to report, enterprises like the Great Wall and Jianghuai should turn to other markets. In addition to funding requirements, the company’s asset-liability ratio must be within 50%, and the bank’s credit rating must also be 3A, if they produce passenger cars and other passenger vehicles. The category of products should also have the performance of mass production of automotive products. The accumulated profit after tax for the last three years must be more than RMB 1 billion.

JAC is a major commercial vehicle manufacturer in China. Its main products include passenger car chassis, light trucks, heavy trucks, and MPV series. Among them, the sales of "Ruifeng", which was introduced to the market in 2003, grew even more year after year, and quickly jumped to the top of domestic MPV sales. Good performance has increased the confidence of Jianghuai to enter the upper and lower cars, and has also aroused the attention of the National Development and Reform Commission. During the application of the car catalog by Jianghuai, the National Development and Reform Commission successively made several trips to Jianghuai Research, but quickly lost it. One very important reason is profit. Did not meet the relevant requirements.

In 2003, the after-tax profit of Jianghuai and Huaihe was 210 million yuan, and it was 320 million yuan in 2004. Until April 2006, the annual report published by JAC showed that its 2005 net profit reached 497 million yuan, and it only met three years. The profit after taxation exceeds 1 billion yuan. Strictly speaking, even for automobile companies with more growth potential such as the JAC, the profit requirements for access to the Development and Reform Commission’s cars are also reluctant. What's more, in the fiercely competitive market, the scale and profits are far below the JAC level. What about the brand?

Driving cars hard to autonomy

In recent years, the commercial vehicle market has become saturated, and more and more companies have begun to move into the passenger car market and enter the car industry. Such enterprises can be divided into two categories. One class has a firm position in the market, such as JAC. The light trucks, Great Wall pickups, and Foton's heavy trucks; and the other type was shortly after entering the auto market, due to rising oil prices and rising costs resulting in lower profits, forced to turn to other market auto companies.

Insiders believe that companies with experience in building cars and companies without experience in building cars should treat them differently, and mature brands should pay attention to them. From the current point of view, the self-owned brands have a higher technological content in the field of commercial vehicles, and some companies already have the strength to build cars. However, the current threshold is too high, and it is difficult for a large number of commercial vehicle companies that want to transform themselves into cars. Under the backdrop of fierce market competition and overcapacity and structural overcapacity, the situation facing commercial vehicle companies entering the car market is much more severe.

The relevant state departments also noted this point. At the end of last year, the Development and Reform Commission’s “Circular on the Opinions on Structural Adjustment of the Automobile Industry” stated that the principle of structural adjustment was “differential treatment and implementation of classified guidance”. The auto industry structural adjustment needs to maintain pressure, and it will continue to support enterprises with high capacity utilization rate and in short supply of products, and strictly control new production capacity for enterprises with insufficient capacity utilization and oversupply of products.

"If there is a problem of investment overheating, raising the threshold for industrial policy is tantamount to throwing children out together with dirty water." Minister of Industry and Economic Research of the State Council Development Research Center Feng Fei believes that the control of automobile capital should be served and groomed. Mainly. He pointed out that the restricted should not be only domestic-funded enterprises, which is very unfavorable to the development of the national industry and also has a fundamental conflict with the objectives of industrial policy.

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