Shandong wants to build "big car"

The Shandong Provincial Government has brought Shandong Automotive Industry Group, Weichai Holdings and Shandong Construction Machinery Group together for the sole purpose of creating a "big car" in Shandong.

On May 25, Shantui Power Co., Ltd. and Weichai Power also issued an announcement saying: “According to the Minutes of the Governor’s Office Meeting of the People’s Government of Shandong Province on May 7, 2009, we agreed in principle to Weichai Holdings (Weichai Power Parent Company), Shandong Construction Machinery Group Co., Ltd. (the parent company of Shantui) and Shandong Automotive Industry Group Co., Ltd. implemented the reorganization and formed Shandong Heavy Industry Group Co., Ltd.. Thus, in 2009, the reorganization of the automobile industry in Shandong Province opened.

"Why is it 'agreeing in principle'? 'Agreeing in principle' does not mean any change, and we are not clear about it." On May 26, a person from Shantui Securities Securities Department told a reporter from the China Business News: "This We also felt very suddenly after the reorganization model. After we received a meeting of the group, we published an announcement. 'Principle of approval' was based on the content of the meeting. We did not change it."

Weichai and Shantui staged a "real lie" - something that has been denied, but it has finally become a fact.

liar

March 17th, 2009 is a noteworthy day. On the same day, Weichai Power issued a clarification announcement, which reads: “The largest bulldozer manufacturer in the country, Shandong Engineering Machinery Co., Ltd. (hereafter referred to as 'shantui shares') The controlling interest of the company is expected to be transferred to the rumors of Weichai Power Co., Ltd., which is also affiliated with the Shandong Provincial State-owned Assets Supervision and Administration Commission. The company and its controlling shareholder Weichai Holdings did not plan to negotiate the above-mentioned asset restructuring, nor has it signed relevant Intentions, agreements and other documents.” Weichai Power also vowed that “the company and its controlling shareholder Weichai Holdings have promised that the above matters will not be planned in the next three months.”

On the same day, Shantui also issued a clarification announcement. The "China Business" reporter found that the content of the announcement was almost identical to the clarification announcement of Weichai Power, and also promised that "these matters will not be planned in the next three months."

However, it turned out to be a smoke bomb. Only two months after the clarification announcement was announced, Weichai Power and Shantui, Shandong Automobile Industry Group were pushed into the tide of restructuring by the Shandong Provincial Government's meeting on May 7. Regarding whether it violated the commitment of not planning and reorganizing the project for three months, Shantui Power and Weichai Power have no secrets. After several contacts with the "China Business" reporter, the relevant person of Shantui said: "Now three Shandong Heavy Industry Group companies are established, which are very different from the previous Weichai Holdings and Shantui shares."

Since 2009, Weichai Group, which intends to quickly establish dominance in the automotive component industry, has implemented a series of mergers and acquisitions under the leadership of chairman Tan Xuguang. Before Weichai prepared to hold shares in the Shantui shares, it has actually started the bottom sweep of global auto parts resources. On January 23, 2009, Weichai won the auction of MOTEUR SBAUDOUIN Co., Ltd. for EUR 2.99 million and then contacted GM at an auto parts manufacturing plant in Strasbourg, France.

While implementing acquisitions abroad, Weichai’s expansion intentions in the province of Shandong are gradually revealed. A person from the Shandong Automobile Industry Association made a clear statement to the “China Business” reporter in mid-April: “In order to integrate Weichai for industrial integration, it will be written into the Shandong Provincial Automobile Industry Revitalization Plan, which will be discussed later by the Governor’s Office. this matter."

The “Shandong Provincial Automobile Industry Adjustment and Revitalization Plan” (hereinafter referred to as the “Planning”) of the 21st of April furnace clearly states: “The expansion of production scale through mergers and reorganizations will make the development of Weichai Power an important international heavy-duty truck, construction machinery and marine diesel engine. Production base."

In the "planning", there is such a clear support for Weichai, so that the Shandong auto industry people feel surprised. It is with the strong support of the government that Weichai’s ambition is unmistakable. Tan Xuguang said: "The Group's sales revenue in 2008 exceeded 50 billion yuan, a 100-fold increase over 1998, and we will strive to double our sales revenue by 100 billion yuan in 2012 and enter the world's top 500 companies."

Tan Xuguang’s dream of Weichai Empire seems to be reversing. Who will head the Shandong Heavy Industry Group in the future?

Lalang

"This 'principle agreed' may still hide more secrets." A person with an unwillingness to be named with CNHTC in Shandong told the "China Business" reporter: "Indefinitely, integration may not be successful."

China National Heavy Duty Truck and Weichai are a couple. In 2005, the dispute between China National Heavy Duty Truck and Weichai gradually heated up. Finally on March 20, 2006, Shandong State Assets Supervision and Administration Commission issued a document stating: “Transfer 100% of Weichai’s shares held by China National Heavy Duty Truck to Shandong Province. The SASAC held it directly.” Thus, Weichai and China National Heavy Duty Truck officially separated, but the grudges of the two sides did not break.

Just as people from China National Heavy Duty Truck Co., Ltd. also saw the doubts about “agreeing in principle”, the “China Business” reporter contacted the Enterprise Reform Office and Publicity Department of Shandong State-owned Assets Supervision and Administration Commission respectively. However, the Shandong State-owned Assets Supervision and Administration Commission closely guarded the situation. A propaganda office official clearly stated: “These situations should not come to us. You should ask the provincial party committee and the provincial government.”

Before this, why did the Shandong SASAC, which once led the split between Weichai and China National Heavy Duty Trucks, avoid this? "This is a typical Lalang match." Jia Xinguang, a well-known automotive analyst, said: "Now, how does the "Lang-Lang match" work? China's state-owned enterprises will never be automatically tied together. Perhaps it is the influence of Laozi. "I'll never come back."

In fact, according to the "plan", Shandong Province has also noticed the problem of "Lang-Lang". "Planning" emphasizes adherence to market-led, government-driven, actively promote the reorganization of the automobile industry, integrate key resources, increase industrial concentration, optimize the organizational structure and upgrade; lengthen the automotive industry chain, achieve professional, large-scale, cluster development New pattern of industry.

However, the Shandong Province's dominant integration seems to be a bit distant from Weichai's dream. Ai Jian Securities analyst Long Chun analysis. “Winch Group has always emphasized dominance in integration. Shantui shares are a good reorganization target for Weichai Group, but Shandong Automobile Industry Group Co., Ltd., which is not strong enough, is hardly satisfied with Weichai, and it is now established. After a Shandong Heavy Industry Group, the Weichai Group under the Shandong State-owned Assets Supervision and Administration Commission added another mother-in-law.

Shandong Automotive Industry Group Corporation, which is not well-known in the automotive industry, was established in 2003. It has local auto parts companies such as Shandong Automobile Spring Factory, Shandong Mingshui Auto Parts Factory, and Qufu Auto Parts Factory. According to its published data, from the end of 2009 to the end of March, the output value was only 429.29 million yuan. For Weichai Group with an output value of 50 billion yuan, this is only a small company. However, according to the "Lang-Lang" of the Shandong Provincial Government, Weichai Group, Shantui Group, and Shandong Automotive Industry Group are on the same level as the newly established Shandong Heavy Industry Group. A person from China National Heavy Duty Truck Co., Ltd. smiled and told a reporter from the China Business News: “This kind of integration is definitely unwilling to tell you about the impact of Weichai.”

“Tan Xuguang’s dream of Weichai Empire seems to be reversed. In the future, whether the head of Shandong Heavy Industry Group is assigned by the Shandong Provincial Government or the Weichai Group will have a huge impact on the development of Weichai. "Long Chun's analysis was verified in the capital market. After the announcement of Weichai Power, its share price continued to fall for several days.

Under the merger and reorganization of the "Lang-Lang" type, can the Shandong Provincial Government's big car dream be realized quickly?

Obvious worry

The integration promoted by the Shandong provincial government is actually closely related to the "Regulations on the Adjustment and Revitalization of the Automobile Industry" issued by the State Council in March 2009. According to the planning of the State Council, the state made a clear deployment for promoting mergers and reorganizations for the first time and encouraged the “Big Four” automobile groups of FAW, Dongfeng, SAIC, and Chang’an to implement mergers and reorganizations nationwide; and supported the “four smalls” of BAIC, GAC, Chery, and Sinotruk. Automobile Group implements regional mergers and acquisitions.

Sinotruk has also become the only manufacturer of heavy-duty commercial vehicles in the Chinese car industry. However, China National Heavy Duty Truck's merger and reorganization plan seems to be consciously diluted in the "planning" of Shandong Province. Shandong "Planning" mentioned: "Supporting heavy truck companies such as China National Heavy Duty Truck Group, FAW Jiefang Qingdao Automobile Factory, and Beifang Mercedes-Benz Penglai Branch Company, upgrading the technical level of large-tonnage heavy-duty trucks and expanding the scale of production, making it an important research and development company in China. Production bases, increase market share, and expand the scale of vehicle exports.” This contrasts with the separate reference in the “planning” to support the merger and reorganization of Weichai.

The “China Business” reporter learned that in 2008, the sales revenue of automotive products was 230.9 billion yuan, and Shandong Province’s auto export delivery volume reached US$3.4 billion. The intention was to promote the automobile industry through mergers and acquisitions. Shandong Province revealed that by 2011, the annual production capacity of automobile vehicles in the province will reach 1.35 million. 200,000 special vehicles and new energy vehicles account for 5% of new cars; sales revenue for the entire industry is 350 billion yuan, an average annual increase of 15%, and export value of auto and parts exports is 6 billion US dollars. Industrial added value accounts for the entire Provinces above the scale of industrial added value than the gravity of 5%. In addition, 8 to 10 large-scale enterprise groups with relatively strong competitiveness are to be formed, including two with an operating income of more than 100 billion yuan.

As a matter of fact, companies that are expected to achieve ultra-thousands of yuan in a relatively short period of time are the Weichai Group and CNHTC. Now that Weichai Group has been incorporated into Shandong Heavy Industry Group, the dream of Weichai becoming a one-billion company may be realized by Shandong Heavy Industries, which will be formed in the future.

This drop is a bit embarrassing for Sinotruck. An official from China National Heavy Duty Truck stated: “We will never reorganize it for restructuring.” Guo Huanan, China National Heavy Duty Truck Propaganda Department, also disclosed: “China National Heavy Duty Truck is now getting calmer and we only merged two conversion plants last year. Our main energy is to adjust our products according to international and domestic conditions and do our own thing.”

The central government supported China National Heavy Duty Truck, while the local government focused on Weichai Power. However, this “Lang-Lang-style” reorganization seems to be quite risky in Jia Xinguang’s view. “There is a certain risk in the merger and reorganization of the auto industry in the Lalang country. The Ministry of Commerce has just held a meeting and analyzed the car at the meeting. Many merger cases in the industry are unsuccessful.” He said: “It is very difficult to integrate after mergers. There is a trend to establish strategic alliances. For example, everyone can work together to create a platform that can save a lot of money. Hu Maoyuan ( The Chairman of SAIC Motor Co., Ltd. also mentioned such a proposal that he hopes to do something together."

Obviously, the ambitious Weichai Group will also face many problems in the integration process of Shandong Heavy Industries under the “imperial mandate” of “agreeing in principle”. After the family is separated, the Weichai Group, which is going well along the way, will face many challenges. Under the merger and reorganization of the "Lang-Lang" type, can the Shandong Provincial Government's big car dreams be realized quickly?

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