A long road ahead for the reorganization of Chinese car companies


On March 28th, Tianjin FAW Xiali Automobile Co., Ltd. issued an announcement showing that the Sixth Meeting of the Fourth Session of the Board of Directors reviewed and approved the “China FAW Group Company and Tianjin FAW Xiali Automobile Co., Ltd. on FAW Huali (Tianjin) Automobile Co., Ltd. Agreement for the Transfer of Equities of the Company. Just 10 days before the publication of the announcement, on March 18, the website of the Tianjin Property Rights Center hung out the transfer information. FAW Huali (Tianjin) Automobile Co., Ltd. planned to transfer 100% of the equity and the listing price was 300,000 yuan.

On April 1, Shenzhen Stock Exchange trading stock FAW Xiali (code 000927) opened at 7.9 yuan. The highest price had reached 8.04 yuan and closed at 7.11 yuan.

On March 28th, Tianjin FAW Xiali Automobile Co., Ltd. issued an announcement showing that the Sixth Meeting of the Fourth Session of the Board of Directors reviewed and approved the “China FAW Group Company and Tianjin FAW Xiali Automobile Co., Ltd. on FAW Huali (Tianjin) Automobile Co., Ltd. Agreement for the Transfer of Equities of the Company. The first extraordinary general meeting of the company in 2008 will be held on April 14, 2008 to consider this proposal.

Just 10 days before the publication of the announcement, on March 18, the website of the Tianjin Property Rights Center hung out the transfer information. FAW Huali (Tianjin) Automobile Co., Ltd. planned to transfer 100% of the equity and the listing price was 300,000 yuan.

“Tianjin FAW Xiali has announced it.” Shen Xuewen, an analyst at Shenyin Wanguo Securities Research Institute, told reporters that there is no possibility that Other companies will participate in mergers and acquisitions.

Tianjin FAW stakeholders are also cautious about this. Zhang, the manager in charge of the promotion, told reporters: “At the moment, there is only an intention to transfer the agreement. The final result will come out on April 15. There are still a lot of variables before this, and the possibility of other acquisitions will not be ruled out.”

Regarding the statement that "FAW-Hua Li was given priority to sell to Tianjin FAW Xiali", relevant persons from Tianjin FAW and FAW Group said "unreasonable and unscientific."

The company does not have "vitality"

According to an announcement from the Tianjin FAW Xiali Board of Directors, FAW Huali's Nanchang District is located in Yangliuqing, Xiqing District, Tianjin, and covers an area of ​​160,200 square meters, next door to FAW Xiali Automobile Plant.

The announcement of Tianjin FAW Xiali's board of directors also revealed that FAW Huali is now a wholly-owned subsidiary of FAW Group, formerly known as the Tianjin Automobile Manufacturing Plant wholly owned by Tianqi Group. In 1995, Tianqi Group and Malaysia's Golden Lion Benben Industry Co., Ltd. jointly formed Tianjin Huali Automobile Co., Ltd. with a shareholding ratio of 75% to 25% respectively. In June 2002, Tianqi Automobile Group transferred its 75% shareholding price of FAW Huali to the FAW Group. In October 2006, Malaysia's Lions Leap Company transferred its 25% shareholding to FAW Group, changing the nature of the enterprise from a foreign-invested enterprise to a domestic-funded enterprise.

"FAW-Huali previously produced a Daihatsu van (using Daihatsu Technologies, Japan) as a minicar; later it produced Tetra (a small-sized SUV produced by Daihatsu Corp.) It has not been produced for a long time." Secretary of the China Association of Automobile Industry Market Trade Committee Zhang Boshun told reporters on April 1.

As of December 31, 2007, the total assets of FAW Huali were 65,303,200 yuan, and the net assets were negative 13,675,955,000. The main business income was 71,637,600 yuan and the net profit was negative 13,155.34 million yuan.

Zhang Boshun told reporters that FAW-Huali's products do not sell well, and the market demand is not correct, and the company "has no vitality."

300,000 yuan is worth

Although assessed by Zhonghe Asset Evaluation Co., Ltd., the net asset value of FAW Huali was RMB 242,500. However, there are still people in the industry who believe that the "shell resources" and production capacity of FAW-Huali are attractive to companies that urgently need car "skills for survival" and companies that urgently need to expand their production capacity.

The announcement shows that FAW-Huali has a relatively complete vehicle production line and was once a well-known domestic vehicle manufacturer.

However, the transfer price of 300,000 yuan is worth the price?

"Even if the bid is a one-off transfer, it is possible because there are many prerequisites." Plateau News Center Director of FAW Group told reporters on April 1st that there are many prerequisites for the transfer of FAW-Huali. These preconditions determine the high level of acceptance of enterprises. Standards, the number of companies that can meet the conditions are few.

According to the information of Tianjin Property Rights Exchange website, FAW Huali’s equity transferee requires the production of domestic vehicles for vehicles with a registered capital of not less than RMB 1.5 billion. It has strong capabilities and conditions for car R&D and management. The successful practice of domestic auto industry. The recipients must maintain the continuous operation of FAW-Huali, ensure the stability of the workforce, have a clear and operational product development plan, and build a 150,000-seat sedan production base within 2 years.

“The value is not enough to consider tangible assets and intangible assets.” An expert from Fudan University’s School of Management told reporters, “Generally, such low-cost transfer companies are insolvent, need to be acquired, injected funds, and It buys and revives."

"This time, FAW sells Huali to a better company, because this business itself is rather poor and it is not profitable. It is a market approach," said the expert.

Acceleration of mergers and reorganizations

In the automotive industry, buying a car factory with 300,000 yuan may not be news. According to reports, 1997 Guangzhou Automobile Group 1 yuan acquisition of the French Peugeot Corporation's stake in Guangzhou Peugeot, and Honda Motor Co., Ltd. to establish Guangzhou Honda. At the beginning of March this year, "Shenyang Shenfei Hino Automobile Manufacturing Co., Ltd. (referred to as Shen Fei Hino) sold 46% of the equity "listed project release. According to the announcement, the current total asset appraisal value of Shenfei Hino is as high as 458.6 million yuan, but the listing price for 46% of the equity is 1 yuan.

Information on Tianjin Property Rights Exchange also showed that on March 21, Tianjin Automobile Industry Materials Co., Ltd. transferred RMB 5,200,000 to 55% equity of Guangxi Tianjin Automobile Industry Sales Co., Ltd.

"Actually, this series of mergers and acquisitions shows that the pace of mergers and acquisitions in China's auto industry is accelerating. With the high degree of openness of the Chinese auto industry, the competition will intensify, and corporate mergers and acquisitions will increase." Experts from Fudan University School of Management told reporters.

The Chinese auto industry has faced difficulties in mergers and reorganizations. According to statistics, there are currently more than 130 automakers in China, and the sales of the top ten auto companies in 2007 accounted for 83% of the total. The vast majority of auto vehicle companies have sales of less than 10,000 vehicles a year, with at least only a few dozen vehicles.

The automotive industry is the industry that places the greatest emphasis on scale and openness. According to the research report released jointly by the Ministry of Commerce Industry Damage Investigation Bureau and the China Automotive Technology and Research Center of the Ministry of Commerce, from the perspective of the status quo of the international auto industry, auto companies with an annual output of less than 1 million cars can no longer exist alone, and 2 million vehicles are also facing Restructure the situation.

In fact, large-scale mergers and reorganizations have already begun. In July 2004, Brilliance Jinbei and Chery Automobile jointly invested 10 million yuan to establish Shanghai Kewei Auto Parts Company in Shanghai; in December 2004, Changan Automobile Group and Jiangling Motors respectively invested 500 million yuan to form Jiangling Holdings Company. In March 2005, Dongfeng Group acquired Zhengzhou Nissan; in December 2007, SAIC Nanjing signed a comprehensive cooperation agreement.

However, there are also industry experts pointed out that China's auto industry mergers and restructuring is still difficult. Among the top ten auto companies in China, except that Geely Automobile is a private enterprise, the rest are state-owned enterprises. The auto industry is a high-investment, high-profit tax industry, closely linked to local GDP and taxation. Only by breaking the traditional concept of "local protection" and carrying out asset mergers and reorganizations can we open up a new chapter in China's auto industry.

Oil Cooler For Construction Machinery

Water Cooled Air Cooler,Marine Water Cooler,Excavator Heat Exchanger

Yushun Heat Exchanger Co., Ltd , http://www.wxheatexchanger.com