SAIC Overseas Acquisition Expansion


SAIC does not seem to greedily expand the scope of its influence. Whether it is the self-owned brand Roewe, or the joint venture brand Shanghai Volkswagen, and Shanghai GM are all located in Shanghai, its own-brand Nanjing factory and Yizheng factory are all within a radius of 300 kilometers. The upcoming acquisition of the British LDV It will also move to Wuxi, and only SAIC-GM-Wuling is located in the southwest of China. In this way, the parts supply chain system around Shanghai will continue to form an industrial cluster. SAIC Group is located in the center, and the resources within the axis circle have achieved the most effective sharing.

Chen Hong, president of SAIC Motor Corporation (Shanghai Automotive Group Co., Ltd.), recently appeared in the United Kingdom and was originally a company branch. His presence was not surprising. However, there are "informers" revealed that he actually had another purpose in his trip.

A reporter from the China Business News learned that a negotiating group organized by SAIC had gone to the UK as early as July and August 2009. The task of this group was named "Investigation of Acquisition Projects."

"Now, a group of technical staff also went to the UK. If there is no surprise, the acquisition can be completed within the year." The informed source told reporters that this closely-contacted British company called LDV, the acquisition price of about 200 million yuan The renminbi, SAIC has taken a look at its powertrain technology, and the equipment can be moved to China.

It seems that the new SAIC layout needs to be re-imagined.

Go abroad again

Who is the next target to expand commercial vehicle territory?

Since the beginning of 2008, several troubled car companies around the world have all had “relationships” with SAIC—hammer, saab, volvo, opel, and even General Motors. All have been rumored to be acquired by SAIC. In this regard, SAIC has been taking a evasive attitude.

However, this British commercial vehicle company is actually listed in the SAIC acquisition list. According to the British "Daily Mail", the company is called LDV Group, a light commercial vehicle manufacturer based in Birmingham, England, with an annual production capacity of 13,000, and the main products are the Maxus series of vans and minibuses. Due to losses in recent years, it was once acquired by a Russian car company. In the context of the financial crisis, the Russian car company did not let it back to life. Now he hopes to transfer the equity in the hands.

In fact, SAIC Motor Corporation's commercial vehicles have always been a weakness. Apart from Huihui Automobile, it also has a Chongqing Red Rock heavy truck project reorganized with Fiat. Compared with FAW Group and Dongfeng Group, sales of SAIC's commercial vehicles are very different. From a commercial point of view, SAIC has not even been able to squeeze into the mainstream of the commercial vehicle sector. For this reason, a strong "breakout" is also planned.

On September 15, 2008, SAIC and Iveco of Italy signed a framework agreement on the consensus and basic principles for further cooperation between the two parties. According to the agreement, both parties intend to establish a new commercial vehicle company on the existing platform of SAIC Iveco Commercial Vehicle Investment Co., Ltd. Products include light buses, heavy trucks, large and medium-sized passenger cars, special vehicles and core components. In addition, both parties promised to establish a technology center together.

“The technical center is a must for SAIC to build, thanks to the experience of the Shanghai General Motors Pan Asia Technical Center.” According to informed sources, the acquisition of a UK factory is also a fancy for its technology in the commercial vehicle sector.

According to its disclosure, SAIC had already communicated with Fiat prior to its acquisition in the United Kingdom in order to avoid conflict with its joint venture project. The negotiating acquisition company will produce a commercial vehicle that is smaller than the current Iveco model on the Chinese market, and the equipment will be moved to Wuxi, which will be combined with the original Xinyatu (formerly Nanjing Automobile's light commercial vehicle brand). Today, the overseas acquisition of the commercial vehicle segment also replicates its successful acquisition experience in the passenger vehicle segment.

Voluntary volume

Roewe shuns the lion to make persistent efforts

"Unconsciously, there are more and more Rongwei on the road." A well-known Shanghai media person lamented the reporter.

Data show that from January to August 2009, SAIC's Roewe brand and MG brand sales were accumulatively increased by 244.54% and 86.55%, respectively. Among them, the Roewe 550 has performed outstandingly: it is currently close to 7,000 vehicles per month, and it has become one of the models with the highest sales growth in 2009.

At the beginning of the year, Chen Hong proposed the reservation targets of the self-owned brands Roewe and MG for sales of more than 50,000 vehicles. Now, in the face of sales growth, he said that it is possible to increase the target to 60,000 vehicles (450,000 Roewe and 15,000 MG).

However, even so, some people still think that SAIC's own brand has been slow to develop. In fact, the self-owned brand was in a loss before 2008. According to calculations, the company is in breakeven when Roewe and MG's annual sales reach 38,000 vehicles and 40,000 vehicles respectively. According to the current sales volume of 6,000 units of Roewe Month and more than 1,000 MGs, Roewe will be able to make profits at the end of the year, and the MG will have a long way to go.

Analyst Yang Sheng of Shanghai Securities analysts, Roewe 550 sales of its own brand continued heavy volume, the current monthly sales have reached 6,000, the company's integration of Nanchang MG brand, although not yet effective, but we long-term optimistic about its integrated development and manufacturing of dual-brand Operational strategy.

Build a layout

Disadvantages are favorable to passive

Among the top ten global auto sales companies in the first half of the year, SAIC ranked the ninth, and he became the only company with a year-on-year growth in sales. Such achievements have already caught the attention of the world.

However, this is obviously not SAIC's ultimate goal. “Shangqi is not willing to publicize the news of the acquisition because the proportion of self-owned brands in the entire group is not high at present. According to relevant sources, SAIC Motor must continue its efforts whether it is passenger cars or commercial vehicles.

At the beginning of this century, SAIC Motor's strategy of developing its own brand was once code-named "Yangtze River Strategy." The so-called “Yangtze River” strategy is to integrate the automobile industry under the leadership of the SASAC and use Chongqing, Wuhan, Nanjing, and Shanghai as strategic bases to fully integrate the large and medium-sized state-owned auto companies in the Yangtze River Valley with Chang'an, SAIC, and Dongfeng as the core. During this period, SAIC Motor’s strategy was implemented quickly and effectively, namely, deploying its own forces in Yizheng and Nanjing. The most famous one was to reorganize Nanjing Automobile, because there was a lack of light commercial vehicle platforms for SAIC.

While implementing the "Yangtze River Strategy" in China, SAIC also started its overseas acquisition. In 2004, SAIC acquired South Korea's Ssangyong Motor; in 2005, SAIC acquired Rover UK to lay the foundation for its own brand expansion.

Although, in the Ssangyong project, SAIC suffered a quagmire. However, this did not slow down its expansion. There are SAIC insiders told reporters that SAIC learned the bad experience in the acquisition of Ssangyong, will help the next acquisition. "If SAIC wants to develop its own autonomy, it is crucial to absorb technology. Acquisition is an effective method. With accumulated experience and lessons learned, further acquisitions will be more effective," said a person familiar with the appeal.

Chen Hong has set a development focus for this year's SAIC, one of which is the level of independent innovation.

“In January, SAIC invested RMB 2 billion to establish a special powertrain company, and will continue to invest RMB 2 billion in hybrid vehicles and key components, striving to launch SAMSIC's own-brand hybrid vehicles in the market within three years. To seize the high ground of the automotive industry and technology." Chen Hong firmly stated.

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