What is the business prospect of Geely's acquisition of Wal-Mart?

20 10 On the afternoon of March 28th, Gothenburg time 14, Zhejiang Geely Holding Group officially signed a contract with Ford Motor Company, and reached an agreement that Geely acquired 0/00% equity of Volvo Car Company/kloc-0 and related assets (including intellectual property rights). The transaction is expected to be completed in the second quarter of this year after obtaining the approval of relevant regulatory authorities. This is the most wonderful acquisition in the history of China automobile industry. Geely Automobile, an automobile company that has only developed in China for more than ten years, acquired Volvo Car Company, a world-renowned high-end automobile brand with a history of more than 80 years. Of course, this is also a high-risk acquisition investment. The future is uncertain, and the industry has been talking and worrying. The quality of history will eventually give the answer. Let's analyze the turmoil in the global automobile industry in the past decade and think about the future prospect of Geely's acquisition of Volvo. Dilemma: At present, the relatively mature automobile brands in mahjong intimate contact are all from relatively strong countries, and each of these brands has a mature corporate culture and management mechanism that adapts to its own country. How to effectively understand and communicate with automobile enterprises after the acquisition is called a difficult point. Acquired enterprises often have problems such as declining brand status and technology failing to keep up with the latest trends, which can be said to be a long history. Without advanced management experience and advanced technical strength, it is difficult for China car companies to break through communication barriers and give technical help, so it is difficult to turn losses. In addition, in the face of the self-protection awareness of foreign car companies, the acquisition of overseas car companies can not achieve the ability to absorb and learn from the R&D capabilities and brand building of overseas car companies. On the contrary, it will increase the management and operation costs of enterprises, which will easily lead to low efficiency of enterprises and drag down the development of parent companies. Dilemma 1: There are few successful mergers and acquisitions by foreign capital and many unsuccessful mergers and acquisitions by automobile enterprises. This is nothing new, but there are few successful cases and many failed cases. Successful cases such as Volkswagen's merger with Audi and Peugeot's merger with Citroen are all domestic acquisitions, while the failure case is BMW's acquisition of Rover. Ford acquired Land Rover, Jaguar, Aston Martin and Volvo; Mercedes-Benz merged with Chrysler; GM's acquisition of Saab is a foreign acquisition. Only Renault-Nissan Alliance, Volkswagen's acquisition of Skoda, SEAT and other foreign countries are considered to be a few successful cases. Geely's acquisition of Volvo is a foreign acquisition, which is doomed to be extremely risky. Dilemma 2: The successful cases of high-end and low-end brand mergers and acquisitions are less detailed, and BMW acquires Rover; Ford acquired Land Rover, Jaguar, Aston Martin and Volvo; Mercedes-Benz merged with Chrysler; GM's acquisition of Saab ended in failure. Peugeot Citroen and Renault Nissan Alliance are two successful cases, which are the combination of civilian brands and civilian brands. Only Volkswagen's acquisition of Audi is the only successful case of low-end acquisition of high-end brands. Of course, BMW's acquisition of Rolls-Royce and Fiat's acquisition of Ferrari are also successful, but because Rolls-Royce and Ferrari belong to ultra-luxury super-running brands, the annual output is less than 1 10,000 vehicles. There is no practical reference value. In fact, from the perspective of global automobile development, almost all successful cases of high-end brands and low-end brands living in harmony are tied up in China, such as Audi and Volkswagen, Lexus and Toyota, Acura and Honda, finidi and Nissan in the UK, and even Ferrari and Fiat. The students of Lamborghini, Bentley and Bugatti owned by Volkswagen are actually closer to the Audi brand and cannot be a successful case of high-end and low-end brand acquisition. Therefore, the prospect of Geely's acquisition of Volvo as a low-end and high-end brand cannot be called clear. Dilemma 3: The failed marriage of SAIC's acquisition of Ssangyong: China's culture and management level are difficult to control. SAIC, an overseas company, once acquired Ssangyong Motor, an ambitious Korean high-end automobile brand, and finally controlled 5 1.3% of the shares. This used to be good news for China automobile enterprises to go out and become bigger and stronger. However, the original intention of SAIC's acquisition was to reach an intention of technical cooperation with Ssangyong, but it was difficult for transnational cultures to be compatible and technical cooperation was finally difficult to achieve. Under the strong cultural differences and the resistance of Korean trade unions, China, as a major shareholder, has never had the right to speak. In the end, Ssangyong's business did not improve. As a result, Ssangyong Motor went bankrupt and SAIC lost more than 4 billion yuan. Geely's acquisition of Volvo is also facing the dilemma of SAIC's acquisition of Ssangyong. First of all, Volvo is a powerful country from Sweden, and both Volvo and Ssangyong have a mature corporate culture and management mechanism that adapts to their own countries. After the merger, how to effectively understand and communicate with Volvo will be a difficult problem for Geely and Volvo. In addition, Volvo's own management and operation direction has been unreasonable in the deep crisis for many years, and China lacks experience in controlling large enterprises, let alone enjoying resources, which will become a big problem. Turn for the better: The reason why no other company in China dares to take over Volvo shows that the acquisition of Volvo is very risky. Although Geely's acquisition of Volvo did face many difficulties to be solved urgently, the global industry experienced a turbulent merger of automobile companies in 12, luxury brands changed from domineering to approachable, and the advantage of China becoming the world's largest automobile market brought vitality to Geely. Change 1: The acquired high-end brands have lost confidence and capital in their new owners. Volvo joined the ranks of losses from 1990, but from 1998, under the pressure of cost, global enterprises began to believe in scale effect, and it became a trend at that time to become a large group with an annual output of 3 million cars after merger. In this mode, high-end brands began to form alliances with civil automobile brands, thus forming a global 6. Ford Group took over the high-end brands of Land Rover and Volvo at this time. It should be said that luxury brands caught up with the good period of global mergers and acquisitions when they encountered crisis in the1980s. At this time, luxury brands also have a strong brand position and strong technical capital. Both the acquirer and the acquirer attribute the loss failure of high-end brands to the problem of short-term funds. However, after nearly 20 years of business experience, it is obvious that the plight and losses of these second-rate luxury brands are not only a problem of lack of funds, but also a problem of their own development strategy and business direction. The famous global 6+3 automobile group collapsed in the following ten years; General Motors went bankrupt and was reborn. Hummer and Saab brands are on the verge of closing their brands. Ford sold four high-end car brands, Land Rover and Jaguar to India's Tata Group, Aston Martin to an unknown company, and Volvo became a hot potato. Daimler-Chrysler officially separated a few years ago, and now Daimler is more interested in closing the Maibakh brand. 1999, Volvo lost money, but it became a hot commodity and sold it to Ford for $6.45 billion. Now, years of operating difficulties have left Volvo in an embarrassing situation where1800 million dollars is not available. Finally, it was bought by Geely Automobile, a young car company in China, at great risk. Saab, a Swedish high-end brand with Volvo, was forced to close its brand because no one took over. It should be said that after entering the 2 1 century, a new round of merger cases of automobile enterprises, luxury brands have become the stage for buyers to pray. Since then, luxury brands have changed from once proud to poor objects of the world. It should be said that these brands (including Volvo brand, of course) are not confident enough to resist the change of new owners. From the case of Geely's acquisition of Volvo, we can see that from the initial strength to the final compromise, Volvo's trade unions can see that the business problems brought about by transnational mergers and acquisitions such as strong trade unions, corporate culture and institutional shortcomings are gradually being alleviated. This has brought vitality for Geely to revive Volvo. Change 2: China has become the largest automobile market in the world, and Volvo will rely on the China market to revive. In 2009, China became the world's largest automobile market with sales exceeding130,000 vehicles, and the China market also became the hope for the revival of global automobile enterprises. The rapid development of Audi brand is inseparable from its good development in China market. Before 1999 Audi A6 was officially made in China, Audi's market image in the global high-end automobile brands was in a relatively weak position of Volvo. It can't compete directly with Mercedes-Benz and BMW. Through its own efforts and the great success of the China market, today, Audi brand has been able to enjoy the same status as German double B Mercedes-Benz and BMW brands. At present, Volvo's brand image in the global high-end automobile market is as weak as that of Audi before 1999. With the success of China, Volvo is likely to copy Audi's successful experience. In particular, the dignified and low-key brand image of Volvo Cars meets the needs of the official business market in China. In addition, Volvo, as a wholly-owned enterprise acquired by China, has a superior political advantage, which is bound to successfully seize the official car market occupied by Audi for a long time, and open up the business and family car markets due to the price advantage of a large number of domestic products and the "official car effect". Volvo may completely sit on the throne of the first luxury car brand in China. Through the sales of nearly 200,000 vehicles in China market, the global cost of Volvo Cars will also be shared, thus solving the problem of cost reduction. Change 3: the new owner becomes an advantage. Although there have been many cases of merger failure between automobile companies in the past two decades, GM and Ford, for example, have low management efficiency and inflexible decision-making due to their mixed brand positioning and huge enterprises. Coupled with the century-old automobile enterprises themselves, such as many retired workers and heavy burdens, they eventually failed in the market competition. Geely's acquisition of Volvo is different. After the acquisition, Geely Group has only two brands, Volvo and Geely, so there is no confusion in brand positioning. The communication and decision-making process between enterprises is relatively simple. In addition, Geely Automobile itself is relatively young and has no burden left over from history, so it is easy to go into battle lightly and make flexible decisions. The ultimate failure of international mergers and acquisitions is often due to the inertia of technological development. The typical failure is that GM and Ford have many technical schools and luxury brands, but in the end, due to poor management, not only the original ordinary brands did not absorb much new technology, but also high-end brands such as SAAB, Jaguar and Aston Martin gradually lost their technological advantages, resulting in a decline in brand reputation. Geely and Volvo can avoid the inertia of technological development, because one of them is strong and the other is weak, and there is no problem of mutual absorption and technological development shirking. This time, Geely not only acquired all the shares of Volvo, but also bought its core technologies, patents and other intellectual property rights and manufacturing facilities, and also obtained Volvo's global distribution channels. According to the agreement, if the transaction is finally completed, Geely will obtain a lot of valuable intellectual property rights from Volvo's own intellectual property rights, such as trademarks, patents, non-patented technologies, registered designs, etc. Thousands of patents and related rights, such as engines, platforms, molds, safety technologies and hybrid technologies, as well as more than 260 websites and 1200 design rights, have been transferred or licensed to Volvo Company by Ford Company for free. As long as Geely relies on Volvo as the leader of technology development, continuously improves the strength of technology research and development, and then realizes the enjoyment of technology, it can form the pulling effect of Audi and Volkswagen. Editor's note: Geely still faces many inherent difficulties in acquiring Volvo in the case of automobile companies' acquisition. However, in the era of global automobile industry agitation, GM, the world's largest automobile company, will go bankrupt but can be reborn. Toyota, which is famous for its quality, will also have product quality problems. Strength may change in an instant. Geely's acquisition of Volvo also has a lot of vitality in the changes of the global automobile industry structure, but the future is still unpredictable, and success or failure may not be important. This spirit of going out boldly deserves praise.