Chinese car "Lianheng" counterbalances the multinational giants "join vertical"

On February 25, Dongan Power, a subsidiary of China Aviation Industry Corporation, announced that AviChina plans to establish a joint venture with Dongfeng Motor. Just after SAIC successfully merged with Nanjing Automobile and got on the right track, before the opening of the two conferences in 2008, the plan of Hafei Automobile's subsidiary, Hafei Auto, to relocate its auto business to Dongfeng was undoubtedly another major success for the domestic automobile industry.

The Cold Thoughts behind "The Heat of Production and Marketing"

At the beginning of 2008, when people in the industry all cheered for the “China's auto production and sales will exceed 10 million vehicles and surpassed the United States to become the world’s largest auto market in a certain year”, some people poured cold water: the entire Chinese automobile industry. One year's production and sales are still less than some of the international auto giants. For example: General Motors and Toyota, the production and sales in 2007 were more than 9 million vehicles, while the entire Chinese auto market production and sales from 9 million units even worse.

If we plan to produce and sell joint-venture brand cars, the production and sales volume of our own brands will definitely not be the second-tier company of an international auto group. Even the acquisition of South Korea's Ssangyong Motors and the reorganization of Nanjing Auto, currently ranked No. 1 in the SAIC Group, will not inevitably be merged and reorganized in the international automobile market with its 2 million-unit sales target in 2008.

Longitudinal Houndstooth Intertwining of Automobile Giants

Looking at the automobile structure of the world today, we have shifted from the relatively stable “6+3” to the “4+X” of “you have me and I have you” to form the three major plates of Europe, the United States, and Asia. As the new force of the Asian plate and the fast-growing Chinese auto market, it still maintains a “3+X” pattern.

At present, all multinational auto giants have entered China in full, intending to seize the upcoming "world's largest auto market" and form a "longitudinal" relationship with Chinese domestic auto companies. In addition, multinational corporations also implement the "China+1" strategy, which is to find new investment locations in China's neighboring countries while operating Chinese companies. Such as Toyota in Russia, Honda in Vietnam, India, Nissan in India, Mazda in Thailand, Suzuki in India, GM in Russia, India, Volkswagen in Russia, Daimler-Chrysler in India, BMW in India, Renault in India New or additional investment projects. The Longitudinal Network has been shown to be intertwined.

At the same time, the international auto giant’s Qing Qing’s team has never interrupted. For example, GM, Ford and Renault-Nissan’s love triangle; for example, GM sells shares of Fiat, Suzuki and financial company GMAC; Ford sells its Aston-Martin car; Jaguar and Land Rover buy it for Tata, India. Dee; Daimler-Benz throws Mitsubishi Motors’ stock and merges with Chrysler and sells it.

Self-redemption of Chinese cars

Currently, the top three state-owned large-scale automobile companies in China's auto market: SAIC, FAW and Dongfeng have a number of joint venture brands and their own brands. China's newly revised automobile industry policy stated last year that it is necessary to form three to four key automobile companies with annual output exceeding 2 million vehicles by 2010. After SAIC Motor reorganized Nanjing Auto and completed the comprehensive integration of the Rover brand, it raised the goal of producing and selling 2 million vehicles. It intends to hit the line ahead of schedule; FAW proposed the overall listing target after the collection of Tianqi, intending to concentrate funds and advantageous resources to continue to grow. The target of 1.7 million vehicles was proposed; Dongfeng’s production and sales target for this year is 1.35 million, which will continue to stabilize the industry’s top three position.

If Dongfeng can grab the 10th China Hafei successfully before grabbing the PSA Group, it will have the hope of catching up with FAW and enjoying the best of both worlds. Chang'an, BAIC, GAC, and Chery, which are in the second camp, have set production and sales plans between 900,000 and 1,050,000 this year. In order to compete for the last quota, there will be fierce competition between them.

Although the goals and prospects are quite clear and beautiful, the Chinese auto industry is still on the “dangerous edge”!

In the Spring and Autumn and Warring States Period, in order to fight against the powerful Qin State, Su Qinpei matched the six countries and advocated “Lian Heng”; while Zhang Yi said in Qin Guoyou’s implementation of “Integrated Longitudinal” in order to defeat each of the six countries in “Lian Heng”. It is called "longitudinal".

If you don’t want to be defeated by the multinational car giants, you’ll be struck between China’s auto companies.

Some automotive experts predict that this year, the merger and reorganization of China's auto industry will show a climax. In addition to the reorganization between large, medium, and small state-owned enterprises such as SAIC's NAC and Dongfeng and HAFEI, China's auto industry needs to reorganize large-scale and large-scale enterprises, as well as the integration of state-owned enterprises and private enterprises. In addition to the government, we hope that this source of restructuring will come from brands, markets, and profits.

We can come to several bold Goldbach conjectures: If after the South cooperation, reorganize several private auto companies in Zhejiang, if FAW-Joint Changan and Hebei’s Great Wall, ZTE, Shuanghuan and other SUV manufacturers, if GAC joins BYD If the Jianghuai Automobile Co., Ltd., Chery, Ankai, etc. can be realized, what kind of future will the Chinese auto industry be?

The government should respond to "Lian Heng"

In the tide of restructuring, both state-owned and private enterprises should examine the present, look to the future, and look to the world. In the middle of this, the government should play the role of “business incubator”, that is, in addition to providing preferential support for policies, taxation, etc., the restructured enterprise should also integrate all the advantages of resources to help it form a “technology research and development center” and “ "Party Purchase Center" and "Service Hall" of "Talent Information Center". In the case of rising costs of raw materials and use of petroleum and steel, the intention is to establish a large R&D support system and develop inexpensive, energy-saving, environmentally friendly and safe and beautiful “Phoenix” and “Lianhuang” companies. "Flying pigeon" bicycle-like national cars and world-renowned car brands.

Only in this way can the Chinese auto industry be protected against vertical integration and outflows, so that it can fully participate in the international market competition and be truly worthy of the honour of the upcoming "world's largest auto market".

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