Who is hindering the reorganization and merger of the automotive industry?

It seems that we have never paid so much attention to the reorganization of the auto industry as we do today. However, the reorganization of Hafei by Dongfeng still gave the industry a clear signal that the external competitive pressure is increasing and internal Driven by the desire to become bigger and stronger, the joint restructuring of the automotive industry has become a general trend.

In the words of Zhang Xiaoyu, vice chairman of the China Federation of Machinery Industry, “Chinese auto companies are currently under more pressure to operate and everyone is paralyzed.”

To this end, China's government departments have always hoped to lead a new round of integration, and mergers and acquisitions between enterprises have also been supported by policies.

As early as the end of 2006, the National Development and Reform Commission issued the "Circular on Structural Adjustment of the Automobile Industry", which requires government departments at all levels to vigorously promote cross-regional and inter-departmental restructuring of auto manufacturers and cultivate large-scale enterprises with international competitiveness. group.

Bigger and stronger

The actual results also proved that at the end of last year, after SAIC reorganized Nanjing Auto and completed the full integration of the Rover brand, this year it put forward the goal of producing and selling 2 million vehicles, and FAW also put forward an overall listing and annual production and sales after the collection of Tianqi. The goal of 10,000 cars.

It should be said that they have been the biggest beneficiaries of the joint reorganization.

In the world, since the automotive industry was founded more than 100 years ago, restructuring and mergers and acquisitions have been an eternal topic in the market. From the early days of the free competition of thousands of companies globally, only a few “6+3” remained today. The oligopolistic competition of enterprises is precisely due to the merger and reorganization, which has promoted the rapid development of the world's auto industry.

In this regard, there are industry insiders who have laid out a grand blueprint for the future of China's auto industry: FAW integrates North, SAIC integrates East China, Dongfeng dominates South China, and GAC dominates South China.

If you say that, at the end of last year, the reorganization of SAIC and NAC was the first to create a cross-regional comprehensive reorganization between large-scale automobile groups in recent years, and the integration of Dongfeng and Hafei will be the continuation of this grand blueprint.

So, who will be the next round of restructuring with each other?

Simple addition and subtraction

In fact, in the case of corporate reorganization, the problems encountered by the reorganization parties are far beyond people’s expectations and the obstacles are not small.

“Some companies restructured only by doing simple addition and subtraction. The two parties have united, and it seems that the total output in the name of a single group has been improved. It can even squeeze several positions on the rankings. But how much of this is Followed the market trading rules."

On March 2, the newly elected 11th National People's Congress representative, Great Wall Motor President Wang Fengying, told reporters in an interview that the merger and reorganization of the two sides must have a strong complementarity in the market strategy, and only in this way can we truly achieve Win-win, not a simple addition and subtraction.

Xu Changming, director of the Resource Department of the National Information Center, also believes that although large-scale production through mergers and acquisitions is a general trend, the time is not yet for large-scale mergers and acquisitions.

Local pressure

"More importantly, the current reorganization of the auto industry still faces enormous resistance from local governments. Local governments all use the autos as a pillar industry. Unless they have suffered serious losses like Nanjing Auto, they will not let go," said Xu Changming.

In fact, as auto companies have economic pull, they are the local output value and large profits and taxes, and the current corporate income tax is subdivided according to affiliation and is collected according to the registered places of enterprises. If there are cross-regional and cross-differentiated corporate mergers and acquisitions Reorganization will inevitably lead to changes in government revenues and taxes.

“For example, if a central SOE buys a local company, the local-to-central share ratio of the value-added tax remains the same, but the local government’s fiscal revenue is reduced by the merger of the acquiring company into the SOE. If a local company is acquired by a foreign company, Since the merger was changed to the place of registration of the merged company, the local government’s fiscal revenue was not due to the fact that the merged company was not included in the scope of local collection.” An industry source gave an example to reporters.

For these reasons, local governments do not want local auto companies to be acquired by foreign companies. Instead, it hopes that by encouraging the development of the local auto industry, it will drive production value, taxation, and employment growth. This has led some local governments to set obstacles to cross-regional restructuring of the auto industry through various means.