Do you know what the best-selling local car brand is? When we look back at this issue, many people may think of Chery, Geely, or even the once brilliant Xiali. Few people will care about the fact that the best-selling local car brands in China today rely on Wuling, which started from the microcosm.
Relying on the favorable policy of “automobiles going to the countrysideâ€, Wuling Microface sold 520,000 vehicles in one breath in the first half of the year, which is more than the combined sales of the three car companies of Chery, BYD and Geely. The Wuling brand mini-vehicle is a joint venture established by Shanghai Automotive Group Co., Ltd., General Motors China Co., Ltd., and Wuling Group Automobile Co., Ltd.—SAIC GM Wuling.
However, it is understood that as the majority shareholder GM has started the acquisition of stakes in the minority shareholder Wuling Group, the best-selling car brand in China may lose its survival space because of Wuling Group's exit.
Gan Wenwei's unannounced visit to Guangxi
When Gan Wenwei visited Guangxi this time, it would be hurried to come and go. As the president of China, which New GM just appointed, the purpose of Gan Wenwei's trip is to take on an important mission, besides “contaminate†the joint venture partners that have been disturbed due to the bankruptcy of GM’s parent company—trying to solve the Guangxi problem that GM always wanted to solve. That is, to take the 15.9% stake held by the minority shareholder Wuling Group at the cheapest price.
On July 17th, Gan Wenwei and General Manager of GM China were warmly received by the Chairman of the Autonomous Region Administration in Nanning, the capital city of Guangxi. Although before this, Gan Wenwei came to Guangxi almost every year to inspect the operation of the joint venture company. However, this time, Gan Wenwei finally did not go empty-handed, because the district government has promised to "maintain media" and sold the equity of Wuling Group's SAIC-GM-Wuling, which is a wholly owned state-owned enterprise of the district, to GM.
According to an informed source close to the leaders of the Guangxi Autonomous Region and senior management of Wuling Group, last month, after several rounds of negotiations with General Motors in the previous weeks, the Guangxi Autonomous Regional Government has reached a preliminary agreement on the transfer of Wuling’s shares: that is, the introduction of sedan products by GM. It was put into production in Guangxi, and Wuling Group's holding of the shares of SAIC-GM-Wuling was sold to GM at a “low priceâ€.
"Although the two parties have already reached a series of verbal agreements, selling Wuling Group shares to GM basically has no suspense." The source claimed that Gan Wenwei's low-key visit to Guangxi should be to finalize the deal. In order not to attract more attention from the outside world, Gan Wenwei and his entourage were almost guileless and simple. Even the itinerary arrangements were deliberately circumvented by the start-up ceremony of the expansion of the eastern plant of the joint venture company.
On July 23, only one week after Gan Wenwei left Guangxi, a second-phase project of SAIC-GM-Wuling's eastern plant with a total investment of 2.1 billion yuan and the second phase of Liuzhou Engine Factory started construction in Liuzhou. However, the reporter noticed that at the initiation ceremony of the project started on the same day, not one of the leaders of SAIC and GM attended the ceremony.
On the official website of SAIC-GM-Wuling, this description of the significance of the expansion project of the eastern plant: “After the eastern plant transformation project is completed and put into production, the production capacity will be increased to 300,000, and cars and commercial vehicles can be co-produced.†According to insiders It said that the expansion of the factory is precisely to prepare for the introduction of new general-purpose mid-size sedan products. This precisely coincided with the "oral agreement" reached between GM and the Guangxi Regional Government, which means that the General Motors Malaysia sedan project will be exchanged for the acquisition of Wuling Group's equity at a low price.
According to the “Guangxi Daily†published on July 18th, the chairman of the Guangxi District Government, Ma Wei, clearly stated when he met with Gan Wenwei. He hoped that GM would further strengthen cooperation with Guangxi and related parties and organize the implementation of the SAIC-GM-Wuling development plan as soon as possible to accelerate the series. The research and development of medium-sized cars will drive the optimization and upgrading of the industrial structure of Guangxi's auto industry.
New GM China Bureau
At the end of last month, Cai Yaxi, director of the office of general manager of SAIC-GM-Wuling, confirmed that whether the expansion of the eastern factory or the launch of a new mid-size sedan project is a strategic move to meet the development needs of the joint venture. However, she refused to respond to the "GM and Guangxi District Government reached an equity transfer agreement" in response to the "equity change is best to ask both shareholders, the joint venture temporarily not easy to answer."
The GM China even categorically denied that it had plans to acquire Wuling Group's shares. He Lilei, general public relations department of China, told reporters on July 29th, “We noticed that there were sporadic reports in the media before, but it turned out that the news from them was not reliable, because GM did not have a similar share purchase plan at all. â€
However, people familiar with the matter still broke the news to reporters that as early as Gan Wenwei's visit to Guangxi, several weeks before the acquisition of GM's acquisition of Wuling shares has come to an end. “The acquisition negotiations were basically led by the district government. The Wuling Group did not have leaders at the beginning. Later Wuling leaders took part and basically did not have the opportunity to speak. So most of the time the district government is talking to GM. â€
“The Wuling Group only holds 15.9% of the shares. After being evaluated by a professional company, this part of the assets is worth 724 million yuan. However, the actual price of the agreement sold to GM is about 300 million yuan.†The informed source disclosed that the reason why the Guangxi Autonomous Region government wanted to The main purpose of the “Selling†Wuling Group shares is to attract GM’s new sedan project in Guangxi. The district’s main leaders instructed the matter: “Get the sedan project. Others can talk about it.â€
At present, in the equity structure of SAIC-GM-Wuling, the controlling shareholder is SAIC Motor Group which accounts for 50.1%, the second largest shareholder is GE China which accounts for 34%, and the smallest shareholder is Wuling Group which only accounts for 15.9%. What GM hopes to get most is the 15.9% stake held by Wuling Group. Under the premise that business operations continue year after year, if more equity is in hand, GM's profitability in China will further increase.
From the moment eight years ago when SAIC Group reorganized Wuling Group and established a joint venture company SAIC-GM-Wuling 8 years ago, GM has always wanted to expand its stake in the joint venture company because SAIC-GM-Wuling’s profitability is enough to make all multinational companies “jealousâ€. . "Only in the first half of 2009, the Wuling Group received a dividend of nearly 100 million yuan from the shares of the joint venture company (the shares to be sold)."
Public data shows that from 2002 to 2005 before the joint venture, SAIC-GM-Wuling’s production increased from 149,000 units to 340,000 units, sales volume increased from 147,000 units to 337,000 units, and sales revenue increased from 3.77 billion yuan to 11.1 billion units. yuan. By the end of 2008, the sales volume of the joint venture company had exceeded 650,000 units, sales revenue was 21.5 billion yuan, and the market share of micro commercial vehicles reached 46.8%, ranking the first in the domestic micro-car market for three consecutive years.
In order to purchase Wuling Group's shares, GM began planning early on. As a result, a "buy Wei rescue Zhao" equity acquisition war began brewing and immediately started.
According to reports from domestic media, as early as 2007, GM began to “Lobby†the local government of Guangxi and hopes that the local government will assist Wuling Group to take over the equity of the joint venture company. Wuling Group is a state-owned enterprise in the Guangxi region, and it is certainly an unconditional response to the Guangxi government’s request. GM finally understood that to acquire the shares of Wuling Group, it must first work through the local government.
"Wuling" easy to master SAIC?
“The government and enterprises have different perspectives on issues, and companies pay more attention to the rewards of a single project. The government must consider the overall regional value. For the investment income generated by 15.9% of the district, the Guangxi government obviously pays more attention to After the General Motors Import Project is put into operation, it will be more obvious for local economic development.†A top executive of SAIC-GM-Wuling, who declined to be named, frankly stated that the government’s move was to obtain short-term equity gains in exchange for long-term local economic development.
At least on taxation, the formation of SAIC-GM-Wuling’s joint venture has caused the local government to be overjoyed. According to statistics, in 2006, SAIC-GM-Wuling and Wuling Group's total revenue exceeded 21 billion yuan, which is 3.5 times more than the annual sales income of 4.84 billion yuan before the joint venture, which is equivalent to recreating three Wuling. From 2002 to 2005 before the joint venture, SAIC-GM-Wuling’s tax revenue increased from RMB 280 million to RMB 740 million.
Obviously, the government's move is also a certain risk: If the introduction of a general-purpose car project is not conducive to a start, the result is likely to be "losing his wife and breaking the army." The reporter learned that according to the preliminary agreement reached between GM and the Guangxi government, the latter had to transfer the “Wuling†domestic and foreign best-selling mini-car brands to SAIC Motor at no cost, in addition to abandoning the original equity income.
According to informed sources, since SAIC Motor is the largest shareholder of SAIC-GM-Wuling’s joint venture company and has the right of first refusal to purchase Wuling Group, if the first major shareholder does not agree with the agreement to acquire Wuling shares, the agreement for GM to purchase Wuling shares is inevitable. Bathing soup. As a result, SAIC took the opportunity to ask Guangxi to transfer the Wuling brand to SAIC free of charge. "Guangxi has agreed to SAIC's requirements for the realization of a general sale and purchase agreement."
Although this statement has not been officially confirmed by SAIC. However, some analysts have pointed out that since the Guangxi government has agreed to sell Wuling Group shares to GM, SAIC-GM-Wuling will no longer be considered as a three-party joint venture, but it should be a joint venture between SAIC and GM. "Therefore, as the largest shareholder of SAIC, it is still the right to decide whether to retain the Wuling brand of minicars."
After learning about the Wuling brand's transfer to SAIC, a veteran employee of Wuling Group sighed: "How can the efficiency of the sedan project not yet launched be judged, but now Liuzhou Wuling, which has been painstakingly operating for many years, will be sacrificed. Sadly.†Indeed, looking at the best-selling mini-car brand that has been built up over the past few decades, it was finally done for others.
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