On August 8, Jiangling Motors officially acquired 100% equity of Taiyuan Zhongqi. Changan Chang'an, which originally belonged to the Changan Automobile Group and the Military Equipment Group, became a wholly-owned subsidiary of Jiangling Motors and has an independent legal personality.
Some media claimed that Ford Motor Co., Ltd., the second largest shareholder of Jiangling Motors, was the main promoter and funder of this acquisition. This move made the three parties profitable. Ford hoped to enter the Chinese heavy truck market for more than 20 years; Jiangling expanded the existing business. In the automotive sector, Changan has “shedded†its self-financing heavy-duty truck business.
However, some media do not appreciate this cooperation. Although Ford has a good performance in the passenger vehicle market in China, it is difficult to escape the “acclimatization†threat in the commercial vehicle market, and it is not appropriate to choose to enter the market when the Chinese heavy truck market is in the doldrums. wise.
On August 21, the Auto Business Daily reporter contacted the Ford China Public Relations Department. Ford China stated: “Commercial vehicles are an important part of our business expansion plan, and we support Jiangling’s decision to enter the heavy truck market. This decision is for Ford. It is also of extraordinary significance.†At the same time, before 2015, Ford promised to introduce heavy truck-type seats in the introduction of China’s 15 new products.
Three-party business According to sources, as early as 2011, Changan Automobile Group has reached an agreement with Ford Motor Co., Ltd. to take over Taiyuan Changan Heavy Duty Truck Co., Ltd. “The two sides agreed to take over with a 50:50 joint venture in a traditional joint venture.†May 2011 Li Xiaopeng, executive vice governor of Shanxi Province, led the team to Beijing to meet with Xu Bin, Chairman of the Military Equipment Group Corporation, and exchanged opinions on the future development plan of Taiyuan Chang'an. Prior to this, Xu Bin met with Han Ruiqi, Chairman and Chief Executive Officer of Ford Motor (China) Co., Ltd.
More importantly, Jiangling Motors withdrew its business unit established to cooperate with Ford on heavy trucks when both parties indicated their intention to cooperate. According to sources, Jiang Ling was tough at that time and believed that Ford had violated the original willingness to cooperate. Ford’s plans for the Chinese market were: cooperation with Changan on passenger vehicles and cooperation with Jiangling on commercial vehicles. Jiangling's previously favored Ford SUVs, the Mavericks and Wingbums, have all fallen into the "pockets" of Chang'an and will not be willing to give up the heavy truck business.
It is understood that in 2011, Changan and Ford’s joint venture plans in the heavy truck field were shelved. Industry insiders predict that on the one hand, the funds may not be linked together; on the other hand, pressure from Jiangling side will be imposed.
More than a year later, Changan and Ford decided to launch a heavy truck business through Jiangling Motors, a company controlled by both parties. The controlling shareholders of Jiangling Motors are Jiangling Holdings and Ford Motors (holding 30% of the shares), while Changan Automobile Group indirectly controls Jiangling Holdings 50. % equity. People in the industry believe that Chang'an Group has “successfully†acquired two helpers for the heavy-duty business that has been losing money for two consecutive years – Jiangling’s channel, Ford’s models and technology.
Isuzu’s Ford Motor Company has more than once stressed the ambition of the Chinese market. Its Asia Pacific and Africa Regional President Joe Hinrichs emphasized that “Ford has a radical growth plan in the Chinese market. Ford attaches great importance to the world’s largest in China. The automotive market is advancing our expansion plan.Over the next decade, Asia Pacific sales will account for 70% of Ford's global sales, and its potential comes from the China-India market.Ford has invested more than US$5 billion in China, far more than in the Indian market. Two billion dollars."
According to industry insiders' analysis, First of all, through this transaction, Ford finally “squeaked†to open Isuzu, a strong opponent in the commercial vehicle field. Jiangling Isuzu’s cooperation is due to expire in March next year. At this time, both parties choose to establish a new joint venture company. Recently, Jiangling Group and Japan’s Isuzu Automobile Co., Ltd. signed a signing ceremony for a joint venture contract between the entire vehicle and the engine. The two parties each invested 50% to establish a joint venture company. Jiangling Motors also transferred 75% equity of Jiangling Isuzu to Jiangling Group. Thereafter, cooperation with Isuzu will be conducted by Jiangling Group. Directly mastered, has nothing to do with Jiangling Motors.
In addition, the company's poorly-operated Taiyuan Heavy-Duty Truck Co., Ltd. has suffered continuous losses. According to statistics, in 2011, a total of 3,062 vehicles were sold. In the first half of this year, it sold only 439 vehicles, far from meeting normal operations. As of the end of the first quarter of this year, Taiyuan's total assets were 790 million yuan, while its net assets were only 250 million yuan. In 2011, it had a loss of 140 million yuan, and the final transfer price was 269 million yuan. The continuous loss allowed Ford to take the initiative in negotiating prices with the Changan Group.
However, for Ford who is eager to enter the heavy truck sector, the current status of China's commercial vehicle market may be the biggest problem.
Ford came too late?
According to data from the China Association of Automobile Manufacturers, in the first half of this year, cumulative production and sales volume of heavy goods vehicles (including non-integrated vehicles and semi-trailer tractors) were approximately 344,000 and 372,000, respectively, which was a cumulative decrease of 31.95% and 31.62% respectively year-on-year. The largest market segment.
Recently, the Auto Business Daily survey found that many domestic heavy truck giants, FAW Jiefang, Dongfeng Commercial Vehicles and other factories all began to leave around May, mainly because of overcapacity and cost savings. Selecting this period to enter the heavy truck market in China has great risks.
It has been reported that Ford’s CARGO model was very likely to be planned early on when Ford introduced China’s first heavy truck model. This statement has not been confirmed by Ford China. "Ford has extensive experience in heavy trucks and world-class products and technologies. We will provide Jiangling development heavy trucks with necessary support and assistance in an appropriate manner. At present, we cannot tell Details of future product plans.†Ford’s China Public Relations Department’s staff briefed reporters.
Ford heavy-duty truck products are mainly distributed in the North American market, and are mainly long trucks that are not accepted by Chinese domestic users. A person in charge of the local heavy truck brand marketing department told reporters: "China's heavy truck market is occupied by nearly 90% of local brands. China's users are divided into two extremes. On the one hand, high-end imported trucks, customers are small, but stable, are some large-scale Companies, companies; on the one hand, low-cost, low-tech domestic trucks, users need to use it to make money, of course, the lower the cost, the better.â€
Ford’s technology introduction is mainly for Ford Euro IV and Euro V vehicle technology and key assembly. However, according to the reporter’s understanding, except for North, Shanghai, and Guangzhou, which are at the national IV emission level, many small cities still use the national II emission standard. Heavy Truck.
Some industry players are not optimistic about Ford choosing this time to enter, Mercedes-Benz, Volvo are more famous than the Ford heavy truck company, but in the Chinese market did not occupy the main market. “Huaer Trucks and Shanghai SAIC Iveco Hongyan, both of which were cooperated by North Benz, CNHTC and Volvo, are not among the top companies in the domestic heavy truck industry. Foreign companies do not fully understand the habits and needs of truck users in China. If Ford wants to get a share, Technology alone is not enough."
Ford’s understanding of the continuing downturn in China’s commercial vehicle market is also understood. “Although the current growth of the heavy truck market is slowing down, we are still confident that with long-term infrastructure construction and economic growth, the demand for heavy truck products will increase.†As a major shareholder of Jiangling Motors, Jiangling Motors is pleased to see the rapid development of JMC in the commercial vehicle and other fields and the continuous expansion of its business,†responded Ford China insiders.
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