In mid-December of last year, the strategic department of FAW Group quietly came to Mount Emei to conduct profound thinking and research on the strategic plan of the Group for the next five years. Their plan is: In 2008, FAW Group's sales target will be 1.8 million units, 2 million units in 2010, and 3 million units by 2012. Throughout 2008, there will be 14 projects obtained from the National Development and Reform Commission, including cars, commercial vehicles, vehicles, and parts. At the same time, FAW's key project, the Light Vehicle Company, was established in Qingdao on December 20 last year. The intention of FAW Group's rapid expansion is self-evident.
On December 11, last year, Dongfeng’s acquisition of Hafei Automobile was revealed in advance. Whether it is a single holding of Hafei, or a comprehensive holding of all automotive business including engine, after Dongfeng’s acquisition of Hafei, it is theoretically possible to achieve qualitative change not only in the group rankings, but also in the nation’s industrial layout, and it is possible to achieve its own brand and mini vehicle. In terms of strategic ideals, the scale will catch up with FAW overnight.
It seems that the performance of FAW in 2007 has been very eye-catching: By November 2007, China’s First Automobile Group had completed sales of 1.4 million vehicles and completed sales of 1.43 million vehicles throughout the year. However, the longevity was not long. This figure was overtaken by the “Great Shangqi†formed after the cooperation in the South. After full cooperation with NAC, SAIC will be able to achieve the goal of producing 2 million domestic automobile "super carrier" annually in a short period of time, surpassing FAW and Dongfeng.
Perhaps it is the realization of the threat and challenge of the “Great Shangqi†that the pace of expansion of FAW and Dongfeng is quietly accelerating.
Shangnan acquisition is the first domino of the "government hand" to restructure the auto industry. The “Eleventh Five-Year Development Plan for the Automotive Industry†determined that the goal of the automobile industry organization structure is to form “1-2 large-scale automobile production enterprises (groups) with an annual output of more than 2 million vehicles and export volume of more than 10%. In the long term, it will become the key word for the Chinese auto industry.
The use of capital leverage is the biggest opportunity for the Chinese auto industry. Through the intervention of the capital platform, not only can greatly improve the management of auto companies, optimize the organizational structure of the auto industry, improve the living environment of auto companies, especially private enterprises, and facilitate the upgrading of many small and medium-sized component enterprises. What is more important is to use capital as a platform to rationally allocate and optimize resources and realize industrial integration. In this way, companies can better reduce transaction costs, extend the industrial chain and create demand, and achieve further goals of becoming bigger and stronger.
People from the National Development and Reform Commission told the media that the United States currently has only a few big auto companies, and Japan and South Korea are also a few people. There are many auto companies that produce more than 10,000 vehicles a year in China. The number of vehicle manufacturers exceeds 100, according to the company. There are about 80 group statistics, and the adjustment of market power is very limited. It may also be counterproductive, causing huge waste of resources. Therefore, it is unavoidable to increase the control of the policy.
At present, China is being transformed from a multinational company's processing and assembly base to a manufacturing base. Many observers in the international community believe that China will become the 21st century world automobile manufacturing center. Such economic status will inevitably be reflected in the capital market.
Maybe, “finding a fulcrum can shake up the entire planet†is biased, but leveraging the leverage of capital and evading its risk is an urgent opportunity for the Chinese auto giants. It is a mission.
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