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Following the acquisition of Nanjing Auto by SAIC Group at the end of 2007, another major merger and restructuring case in the auto industry will be officially signed next week.
The reporter learned yesterday that after more than a year of negotiations, Changan Automobile, a subsidiary of the Armed Forces Group, will formally acquire the assets of the AVIC Group including Changhe and Hafei. Changan Automobile and the relevant person in charge of AVIC Motor did not deny the above news during an interview yesterday.
Chang'an Auto's acquisition of Hafei and Changhe, once successful, will have a profound impact on domestic cars. In China, a micro-vehicle giant with annual production and sales of 1 million vehicles will be born, surpassing the current leader of the mini-vehicle market, SAIC-GM-Wuling. In the future, the micro-car market will form a new situation of confrontation between the "double oligopoly". The domestic auto industry competition will also change due to this restructuring.
Signing of the Great Hall of the People on Tuesday
Yesterday, Changan Automobile released news to the public and will hold a press conference at the Great Hall of the People on November 10th. At that time, national leaders, leaders of relevant ministries and commissions of central state organs, leaders of local governments, leaders of major auto companies in China, and senior partners of domestic and foreign partners will gather in Beijing to witness the development of China's auto industry and look forward to future development plans and prospects. However, the content of the conference, Changan car from top to bottom ashamed.
The reporter then learned from relevant sources that this announcement will be an important signing and the widely-acquired Changan acquisition of Changhe and Hafei will be finalized. In an interview with reporters yesterday, Changan Automobile related persons said that due to company regulations, it is inconvenient to publish exact information, but did not deny the above news. In the interview conducted by senior CAAC executives, they did not deny it. In addition, Changhe Automobile, which has been decisively refraining from mergers and acquisitions, is not as tough as it used to be. It only stated that high-level leaders have their own plans and they are unaware of the situation.
It is understood that this merger or acquisition will be completed in the form of free allocation. Since the establishment of the new CNAC, the SASAC has been hoping that it will focus on the main business of large aircrafts. Since last year, the Ministry of Industry and Information Technology has been promoting the integration of AVIC's automotive business into the CNMC. According to sources, as the China National Aviation Corporation and the China Military Equipment Group are large state-owned enterprises under the jurisdiction of the SASAC, this merger is in essence the allocation of state-owned assets, which is equivalent to left-handedness and right-handedness. Therefore, a "gratuitous allocation" has been adopted. However, this statement has not yet been finalized.
Micro-car market "double oligopoly" confronts new situation
Chang'an Automobile's acquisition of Hafei and Changhe, once successful, will become the first case of the central automobile industry in China in recent years to cross regional and cross-system restructuring, which will have a profound impact on domestic autos.
At present, Changhe and Hafei sell about 400,000 vehicles a year, and Changan Micro-vehicle sales target is 600,000 this year. This means that once the reorganization is successful, a micro-vehicle giant with an annual output of 1 million vehicles will be born in the country. The current leader in the car market is SAIC-GM-Wuling. In the future, the micro-car market will form a new situation of confrontation between the "double oligopoly".
The domestic auto industry competition landscape will also change due to this reorganization. In the first 10 months of this year, the production and sales volume of Changan Automobile has surpassed 1.1 million, and this year is expected to exceed 1.3 million vehicles. Together with sales of 400,000 vehicles from Hafei and Changhe, Chang'an Auto will easily exceed 1.7 million vehicles. This means that Changan Automobile, which is currently the fourth-biggest vehicle maker, will only have a strong impact on Dongfeng Group and FAW Group ranked second and third only by sales volume, and the domestic industry competition structure will be restructured accordingly.
However, some analysts pointed out that despite the scale of Changan after the merger, the difficulties are still relatively high. Wang Liusheng, an analyst at China Merchants Securities, believes that the Changan mini vehicle base after the acquisition will be spread all over the country. Considering that prior to the integration of Changhe and Hafei, the AviChina technician has not been successful, so the management will be relatively difficult in the future. On the other hand, despite the excellent situation in the auto industry this year, Changhe and Hafei are still in losses. Chang'an mergers and acquisitions cannot quickly change their fundamentals. There are still many unknown factors for the success of the reorganization in the future.
View related topics: Military Equipment Group and AVIC Restructuring - Changan M&A Changhe Hafei
Changan acquires Hafei Changhe and signing the Great Hall of the People on November 10