Image source: Tianyancha
In fact, in recent years, many traditional third-and fourth-tier independent car companies have been acquired by new forces, such as Ideality's acquisition of Lifan, Weimar's acquisition of Huanghai, Baiteng's acquisition of Huali and Bojun's acquisition of Li Xia. Although the acquisition itself and the new car-making forces as acquirers have received high attention, some third-and fourth-tier car companies as acquirers are not well known. So what are the origins of many domestic third-and fourth-tier car companies? What value do they have to the new forces?
At the end of last century and the beginning of this century, the explosion of automobile market demand in China led to the emergence of a series of independent automobile brands. However, not every independent brand can survive in the cruel market economy. Here I will choose two typical cases to talk about.
One kind is a small factory, lacking technology and new car research and development strength, mainly making single products or OEM products:
Foday Explorer 6 (discontinued)
For example, Foday Automobile mentioned at the beginning, founded in 1988, mainly produces low-end pickup trucks and hard-core SUVs within 654.38+10,000 yuan, and provides parts for other domestic independent automobile enterprises. The representative products are the Lion series pickups and Explorer series SUVs based on the pickup chassis, but the sales volume has been tepid, and the sales areas are mainly concentrated in third-and fourth-tier cities and rural areas in South China.
Foday lion F22? Guide price: 7.78-15.10.8 million.
Due to its small size and lack of core technology and new car research and development capabilities, it is impossible to launch products that meet market demand. Therefore, we can only continue to produce old pickup truck chassis products, and it is inevitable that sales will decline, marginalize and be eliminated by the market. Being bought by Tucki is a good ending for Foday, at least there is no bankruptcy liquidation or money left.
The other is a big factory that stands still after earning the first bucket of gold, does not strive for progress, and then loses its sustainable development ability:
For example, FAW Li Xia, founded in 1980s, produced cars by introducing Japanese Daihatsu and Toyota technologies. Once a leader in the field of small cars in China, it was a household name with footprints all over the country. It is also one of the most common models on the roads in China.
Li Xia N5 (discontinued)
However, Li Xia stuck to its laurels and didn't put the money earned from the market into technology research and development to serve the sustainable development of the enterprise in the future. 2 1 century, continue to produce old models or cars eliminated by Toyota. We haven't seen the domestic consumption trend to launch SUV, and there is no car with obvious competitive advantage. Coupled with a single product line, it can only be abandoned by the market. Once an independent tycoon, being acquired is also self-inflicted.
For those third-and fourth-tier independent car companies that have not been acquired or fallen, the situation is not optimistic in the case of increasingly fierce competition in the auto market, increasingly saturated market and slow growth. I also explain here.
One is a car company that relies on the milk of the joint venture company, but its own brand is in a worrying situation:
Jie Jun, China (discontinued)
The typical case is Brilliance Zhonghua Automobile. Around 20/2005-20 10/0, Brilliance Auto was one of the most concerned independent car companies. Relying on Zunchi and Jie Jun, two best-selling cars of the same class, they were once among the first-line independent car companies, and even launched bold and avant-garde products such as coupe and Jie Jun station wagon, and their models were also exported to Europe.
China Kubao (discontinued)
However, perhaps the high profits brought by the joint venture BMW Brilliance are enough to support themselves. After the joint venture with BMW, Brilliance gradually lost the motivation to continue its upward development. There are fewer and fewer new cars to watch. Instead, BMW engines are used as gimmicks, but the actual product strength is not outstanding, and it has gradually been surpassed by post-start companies such as Great Wall and BYD, becoming today's third-line autonomy.
China V7? Guide price: 10.87- 159900.
Nowadays, the national policy has liberalized the share ratio limit of joint venture car companies. With stronger strength and greater contribution, BMW has been able to significantly increase its shareholding in BMW Brilliance, while Brilliance, which has basically made no contribution, will only have a significant decline in its voice and profit share in the joint venture company. When the tide goes out, you will see who is swimming naked. I'm not pessimistic. Brilliant now it is too late to wake up. In such a big environment, there is little chance of turning over.
There is also a car company that can only cut leeks by the cottage bonus:
Zotye SR9 (discontinued)
Typical cases include Zotye, Ma Jun, Sichuan Automobile Mustang and other metaphysical third-and fourth-tier brands.
Is Ma Jun satisfied? 3? Guide price: 7.99- 1 1.89 million.
This kind of car company is very similar to Foday mentioned at the beginning. They are usually limited in size, but smarter than Foday. They can cut a wave of leeks and market dividends through the appearance and interior design of famous cars of foreign brands in the cottage, so their sales and popularity are still much higher than Foday's.
Mustang spica? Guide price: 59,800-75,800.
However, these enterprises made the same mistakes as Li Xia. After earning the first bucket of gold, they paid no attention to the research and development of new products and technologies. If Li Xia produces old cars and doesn't look back, it just goes all the way to the end, and there are few selling points in other aspects, and the quality and reliability are not good. When consumers are tired of fake cars, they will naturally lose their market and sustainable development ability. It's only a matter of time before they quit in some way.
Since these third-and fourth-tier car companies are in such a difficult situation, why are the new forces making cars still willing to make acquisitions?
First of all, compared with the new forces, these third-and fourth-tier car companies were established earlier and on a larger scale. Even if the mix is not good, there are existing factories and supporting production facilities. But most of the new forces are in a state of light assets. Except for a few self-built factories in Tucki, most of them don't have their own factories, so they need to find other traditional automobile companies to do OEM production. Operating costs remain high, and production capacity will be restricted by original equipment manufacturers. After the acquisition of third-and fourth-tier car companies, the cost of production line transformation is much lower than that of new factories, and the production capacity can be freely controlled without relying on others.
Secondly and most importantly, these acquired traditional third-and fourth-tier car companies have the qualification to build cars, but it is very difficult for new forces to obtain the qualification to build cars themselves, and it is the simplest, fastest and cheapest way to acquire a car company with the qualification to build cars. With the "birth certificate", it can be regarded as a complete and real car-making enterprise, and it can also attract more capital flow for the subsequent development of the enterprise.
When it comes to the flow of funds, this has to be said. Most of the new forces are still at a loss. Compared with the annual loss of tens of billions of RMB, this symbolic acquisition of several hundred million RMB or even 1 yuan is simply nine Niu Yi hairs. Moreover, the new forces will release tens of billions of RMB financing plans every year, and there are not a few water fish involved. It is not a problem to obtain acquisition funds at all.
In short, the bankruptcy and acquisition of a group of third-and fourth-tier independent car companies can be attributed to the same reason, that is, they did not pay enough attention to the product strength and technology of real models, or played some imaginary gimmicks, or just wanted to live on their laurels for a lifetime, and then lost the ability of sustainable development, which is also a sentence repeatedly said in Bian Xiao's article.
As for who is the acquirer of the new forces, it is not just to obtain the qualification of building cars and expand production capacity. As mentioned in the article, enterprises with relatively complete structure and large scale are more likely to gain the confidence of investors, attract users' attention and place orders for purchase. Therefore, the purpose of the acquisition of third-and fourth-tier car companies by new forces is to attract financing, enhance visibility, sales volume and profits, so as to turn losses into profits as soon as possible and further expand business.
To put it bluntly, even if you can't turn losses into profits, if one day even the new forces can't survive and need others to buy them, then a more complete enterprise structure can also sell at a good price, and the founders will not lose money or leave residue!
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.