[2015 Reorganization Year] Big Reorganization Turnaround

Reorganization is happening year after year. This year is particularly large, especially many. (Important things say three times)

This can be said to describe the auto parts industry in 2015. Regardless of whether it is an international company, a domestic company, or a domestic or foreign company, mergers and reorganization cases have emerged one after another. We have roughly calculated that there are about 50 cases, and many happened between the industry giants. This has never happened in the past. For example, Johnson Controls spins off its auto business, ZF merges Tianhe, China Chemical buys Pirelli and so on.

Why did 2015 become the year of reorganization of the auto parts industry? The author believes that there are three major turning points should be the main reason leading to the outbreak of reorganization cases. A movie called "Great Turning" describes the era of the war of liberation. A thousand miles advance into the Dabie Mountains has brought about a major turn of the Communist Party from strategic defense to strategic offense. Today, we also want to use a “big turning point” to provide a footnote to the big reorganization of the current auto parts industry.

The first is that the world economy is going through a period of transition.

In the past two years, the economy of the BRICS countries represented by China has stepped on the brakes, and the world’s economic engines are no longer so impetuous; the debt crisis in Europe has been overcast and the economy has entered a recession; the US economy has shown signs of recovery, but its recovery momentum is lower than expected. . The world economy has increasingly become a community of destiny. The Federal Reserve announced that "increasing interest rates" affects the nerves of the world and the "double down" of the People's Bank of China also affects the stock markets of various countries. In this context, the Chinese economy has entered the “new normal” and has a negative impact on China and the global automotive industry. The auto parts industry naturally includes them. The economic downturn, the poor are thinking, mergers and acquisitions are right now.

This year, nine years after the world's lubricant giant Shell acquired China's unified lubricants, it officially sold 75% of its holdings. American auto parts giant Delphi also sold 50% of its Shanghai joint venture to AVIC. This shows that the pace of expansion of auto parts MNCs in China and around the world will slow down and a turning point has emerged.

Second, the automotive industry is undergoing major adjustments.

The changes in the world auto industry structure can become a milestone in 2015. Looking at the global car market, Volkswagen and other European car companies represent the highest level of traditional automotive technology; Toyota and other Asian car companies have become leaders in new energy automotive technology; and once the "U.S. Big Three" can only rely on Silicon Valley's Internet technology, in the smart The automobile field looks for the feeling of being the boss.

At present, under the general trend of transition from traditional automobiles to new energy vehicles, the advantages of European car companies are not in place. Even if there is no “emission gate” incident, the German public will also step down from the altar. New energy vehicles are the strategic focus of today's auto companies, and parts and components companies in the upstream of the vehicle should preempt the layout. Thus, we see Bosch, the world's largest auto parts company, planning to sell traditional starter and generator divisions, but acquired American battery company SEEO. China’s traditional motor giant, Ocean Electric, has also acquired a Shanghai-based electric drive that focuses on new energy business this year.

Returning to the Chinese auto industry, this year, the development momentum of self-owned brand vehicles has improved and the overall market share has gradually increased. However, the leaders of self-owned brand passenger cars are no longer the forerunners of Chery and Geely, but Chang'an, the Great Wall and other upstarts. The turning point is also evident. Therefore, Chery and Geely spun off their transmission business this year, both with traditional manual transmissions and more automatic transmissions that are urgently needed in the industry. The order holder was Wan Liyang from the field of traditional commercial vehicle transmissions.

The third is that the auto parts industry is undergoing a major transition.

The economic downturn, the downturn in the auto market and the chill experienced by the auto parts industry were the earliest and most profound. According to the “China Automotive News” statistics, in the first half of 2015, the total sales of 94 auto parts listed companies in China was RMB 2011 billion, which was an increase of 4.59% year-on-year; however, the total net profit was RMB 12.962 billion, a year-on-year decline of 42.11%. The profits are almost lumpy and the competition is extremely fierce.

The transformation and adjustment of the automobile industry will inevitably lead to the elimination of a large number of auto parts and components companies, and sales and mergers and acquisitions will become industry hot words. For example, the automotive interior and exterior business with thin profits was the first to suffer. Magna sold the interior business to Antolin. Faurecia sold the exterior business to the company.

At present, many auto parts companies are undergoing major tests of expansion and retreat, advancement and retreat, and even survival and death. Under this situation of great changes and major transitions, the merger and restructuring of the auto parts industry and the reconstruction of the landscape will inevitably be staged frequently.

The author sincerely hopes that China's auto parts companies will make a successful transition in the process of big reorganizations and major transitions. There will be more, and more, companies that will achieve "reverse attack."

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