Interpretation of Chery GAC Strategic Alliance

Interpretation of Chery GAC Strategic Alliance In early November 2012, Chery Automobile established a strategic alliance, and its model innovation is thought-provoking. It is understood that from the spread of rumors to formal signings, there are only two weeks. In just 14 days, it was not just the two major automobile companies in China that changed.

Although everyone knew beforehand that this was the scene of Chery’s and GAC’s strategic cooperation press conference, almost all the media were still stunned, and they were looking forward to getting more news through various channels – for 14 days. "Fighting hard" is still nothing, until this time.

Most media think only two issues - why? what happened?

On November 6, 2012, Beijing Diaoyutai State Guesthouse No. 5, GAC Group and Chery Automobile announced cooperation here to establish the first strategic alliance of China's auto industry: in order to implement the national automobile industry policy, the actual actions to further enrich the automobile industry in China Based on the bold exploration and practice of regional cooperation experience, the two parties cooperate in the principle of “sincere, equal, pragmatic, open, and mutual benefit” in vehicle development, powertrain, key components, R&D resources, energy-saving and new energy vehicles, and international Business, manufacturing management and other fields to cooperate.

Why sign?

On October 23, 2012, two weeks ago, Beijing, Benwang issued a Weibo, saying that Chery Automobile will cooperate with GAC Group and their intention of cooperation is strategic.

At the same time as Weibo was launched, the industry exploded, and the important reason for such a large response was that any movement among car companies was under the control of the automotive media and it was brewing for a long time before this Weibo was issued. No one realizes that the two Chinese auto giants Chery and Guangzhou Automobile will have any intentions and actions to cooperate. Even many people do not believe that this unprecedented cooperation model will be realized in the Chinese automotive industry.

Completely unexpected. Guess came soon: One is China's most outstanding privately owned auto company. One is the first company in the Chinese auto industry to introduce multiple joint venture partners at the group level to set up a joint-stock company. What is the intersection between the two parties? Is it the need for independent development, or is it simply a gift for the 18th National Congress, or both?

The invisible hand is the result of the national industrial development. With the development of the automobile industry, the country has become more and more clear about the development of the automobile industry. There are two tendencies: first, new energy vehicles, and first, independent automotive industry. Development, whether it is the approval of new projects or the development direction of the automobile development industry in the future, can only get the support of the state to the maximum extent if these two conditions are met.

This is the need for the development of China's auto industry. When the issue of energy, intellectual property rights, and the status of the largest automobile production and sales country are inconsistent, China must reverse this disadvantage. The convening of the T10 in Changchun is not surprising. According to sources, this internal conference was specifically designed to promote the strong alliance between China Automotive Group.

To a certain extent, Chery and Guangzhou Automobile are one of them.

The need for independent development is the most logical explanation: When the Chinese auto industry develops to a new stage and coincides with the convening of the 18th National Congress, the Chinese auto industry must show people a new face. The development of the Chinese auto industry must not rely solely on knowledgelessness. The foreign brands of property rights to promote, independent brands must be the behavior of market economy, do their best to become the protagonist of this economy.

This is also the root of the country’s vigorous promotion of independent forms of development including joint venture autonomy.

Although GAC Group, this company owns GAC passenger vehicles, GAC Honda, GAC Toyota, GAC Mitsubishi, GAC FIAT, GAC GIO, Honda (China), GAC Hino, GAC Bus, Guangzhou Automobile Parts, GAC Toyota Motor, Shanghai Hino Engine, GAC The comprehensive group of dozens of well-known companies including commerce, Tongfang Global, Zhonglong Investment, Guangqi Huili, Guangai Company, Zhongcheng Insurance, Guangzhou Auto Steam Research Institute, etc. has a high reputation and strength, but in independent research and development, Guangzhou Automobile had to try its best to learn from it. Chery is such a company that can meet the development needs of GAC.

Just three months ago, Yuan Zhongrong, executive director and deputy general manager of GAC, was interviewed by the media. Some people asked whether Guangzhou Automobile Group had any cooperation partner. Yuan Zhongrong replied: “You can do a topic and analyze what the advantages of Guangzhou Automobile are. What is it? You can find out what GAC should look for."

The answer was announced by Chery.

What is more important is the third point. The realization of a cooperative alliance is a win-win situation for both parties.

What are the benefits to both sides?

Although there have been many discussions in the industry about the cooperation between the two parties, Zhu Lilin has said that this is definitely worth celebrating for Guangqi Chairman Zhang Fangyou and Chery Automobile Chairman Yin Tongyue.

According to previous media speculations, Chery will transfer a compact car platform to GAC. Some media even stated that Chery transferred the A-Series platform where Ruiqi G3 and Chery A5 are located to GAC, and Chery obtained other urgently needed resources from GAC.

The facts have not been further confirmed. According to the agreement between the two parties, the cooperation between the two parties lies in the fields of vehicle development, powertrain, key components, R&D resources, energy-saving and new energy vehicles, international operations, and manufacturing management. The more detailed news is that while signing the cooperation agreement, leaders of both parties responsible for technology, such as Chen Anning and Huang Xiangdong, signed the cooperation agreement for technology research and development and supporting facilities.

This does not mean more.

In fact, the scope has been expanded. The exact cooperation of the seven major businesses has made the previous interpretation much thinner. According to Liu Tie-nan, deputy director of the National Development and Reform Commission, as long as both parties continue in accordance with the agreed treaty, it will show important demonstration significance for the development of independent brands in China.

Apart from other factors, what can GAC get from cooperation? One is the improvement of independent research and development capabilities, and the other is the use of export experience - Chery Automobile is a self-owned brand benchmarking company with independent R&D capabilities, independent intellectual property rights and core technologies for complete vehicles, engines and some key components. China's largest independent brand passenger vehicle R&D, production, sales and export companies.

According to this year's statistics, since its own brand is still not a major source of profit, the Group’s overall profit has dropped significantly. Therefore, GAC announced plans to issue RMB 2 billion A-share convertible bonds and another issue of domestic corporate bonds of no more than RMB 4 billion. For the group's production increase, research and development, liquidity supplement and financial structure adjustment.

In other words, in essence, GAC has no shortage of capital, and what is missing is the ability to independently research and develop.

What can Chery get from GAC? Management experience, capital operation, manufacturing, lean management, and even funds are all helpful to Chery. Yin Tongyue, Chairman of Chery Automobile, even told the honored guests at the press conference today (6th) that the two companies would work together to achieve common goals and Chery Automobile would be very humble. The management experience of GAC to GAC will never be ignored.

This is also the need for Chery’s strategic change: Since two years ago, Chery has initiated a strategic transformation and has made drastic reforms in R&D projects, finance, sales, and high-level sectors. Chery’s goal is no longer the scale and speed. Is the quality of survival.

Complementary advantages, hit it off.

What does it mean?

Let's take a look at several official statements at the conference site.

Liu Tienan, deputy director of the National Development and Reform Commission: The strong cooperation between car companies is an international business cooperation practice. It is a trend of the country to adjust the development structure of the automobile industry and an inevitable choice for the development of China's automobile industry. It is a realistic demonstration of the development of independent brands in China. significance.

Zhang Xiaoyu, Vice President of China Federation of Machinery Industry: This kind of cooperation is the trend of the times. In the future, it may continue to develop into a level of capital cooperation.

Zhang Fangyou, chairman of Guangzhou Automobile Group, said: This is a requirement that adapts to changes in Chinese auto companies and eases pressure. It is an inevitable requirement for the long-term sustainable development of GAC and Chery and is an innovative cooperation model.

Yin Tongyue, Chairman of Chery Automobile: Both parties share a common purpose and all of them are committed to doing something. Chery can guarantee that learning GAC's experience, conscientiously fulfilling the content of cooperation, and comprehensively promoting the upgrading of the automotive industry platform.

Compared with the above-mentioned several official voices, the voice of the house is very complicated. However, the cooperation between the two parties can be objectively interpreted in this way.

Auto-cooperation model innovation. As told by Zhang Fangyou, chairman of GAC Group, and related responsible persons, although this is not uncommon for the global auto industry, for the Chinese auto industry, this is an innovative cooperation, which also determines that both parties Cooperation will be filled with all kinds of unprecedented challenges.

More importantly, although the cooperation between the two sides is the first grouping cooperation in the Chinese auto industry, it will not be the last one in terms of the recent Chinese auto industry.

Exploration on Development Model of Chinese National Automobile Industry . No matter how many kinds of questioning voices the outside world has, the objective results it brings will have epoch-making significance.

Another positive signal is that the cooperation between the two parties indicates that the development of independent brands will become the backbone of the development of China's auto industry in the future or in the mid-to-long term.

The curtain has just been opened and the mystery has not yet receded. In the future, it is still worth looking forward to.

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