Chapter 32 7. Automobile manufacturing industry - no one can save when the storm comes

In this round of economic crisis, the downward trend is so obvious that no company can get away with it. What is left to the whole industry will be to tighten money to survive in the next 10 years. It is foreseeable that, Before the arrival of a new round of economic take-off, the life of the global auto industry will be extremely difficult. Topic introduction: Unavoidable overcapacity - what mergers and acquisitions bring "In the automotive industry, there will never be a permanent winner, not only in the past, but also in the future." Half a century ago, when Chrysler's president Colbert made such remarks among the U.S. senators, he may not have expected that half a century later, his predictions would be accurate to the point.

In the past ten years, Chrysler, a veteran businessman, has collapsed, General Motors has disintegrated, and even Toyota, the world's largest auto industry manufacturer, solemnly announced to the outside world in 2009 that since entering the auto industry 70 years ago, Toyota has suffered its largest ever operating loss ever! It seems that the current situation of the world's automobile manufacturing industry is extremely bleak, and it seems that it has ushered in the most urgent crisis in history. If we want to find the reason for this current crisis, then the most direct factor must be attributed to the recent global economic recession, not only in the auto industry, but also in every industry in the world. In fact, in During this global economic recession, there are only a handful of industries that can stand alone.

However, the story behind the auto industry is far more than that. If we simply attribute the plight of the auto industry to the economic recession, then we will fall into the dilemma of being confused by appearances. As early as a few years ago, driven by favorable factors in the macroeconomic environment, many auto manufacturers got rid of traditional conservative thinking and put into practice the rapid expansion plans that now seem too exaggerated. However, no one thought that the speed of the global economic recession would come so fast, and the degree would come so quickly, so naturally no one could estimate the result of the rapid decline in car sales.

In this economic recession, although the global auto manufacturing industry is not the hardest-hit industry, and because the governments of various countries have maintained a protective attitude towards this industry, from the perspective of the entire industry, those companies with weaker strength are still Will be forced to close down due to serious losses. In fact, such a situation has been widely seen in countries all over the world. According to professional data, the global automobile overcapacity has reached 2 million vehicles per year. For medium-level automobile assembly factories, this figure is equivalent to at least 80 factories. Production capacity, and for these factories, every extra day of work and production of an extra car means more money lost.

In this round of economic crisis, the downward trend is so obvious that no company can get away with it. What is left to the whole industry will be to tighten money to survive in the next 10 years. It is foreseeable that, Before the arrival of a new round of economic take-off, the life of the global auto industry will be extremely difficult. Coincidentally, at a meeting in 2001, Li Shufu, chairman of Geely Automobile, also expressed such a point of view at a domestic auto summit forum: "In the next ten or twenty years, the three major U.S. auto companies will surely go bankrupt due to cost issues."

As soon as this remark came out, it aroused disdain and cynicism from many people. However, in less than ten years, among the three major American automobile companies, the fate of Chrysler and General Motors was actually predicted by Li Shufu, while the other only surviving Ford Motor, after selling off a series of assets under its own name, has also started a "refuge career" of saving food and clothing. However, despite Li Shufu's insight in prophecy, he cannot escape the fate that China's auto manufacturing industry is facing. Judging by the national policy, in the next 10 years, the automobile market concentration will further increase.In the national automobile industry adjustment and revitalization plan, it is clearly proposed to form 2 to 3 large automobile enterprise groups with a production and sales scale of more than 2 million vehicles, and 4 to 5 automobile enterprise groups with a production and sales scale of more than 1 million vehicles. Through such industrial integration , and strive to reduce the number of automobile enterprise groups whose production and sales scale accounts for more than 90% of the market share from the current 14 to less than 10.

What we know is that in any round of industry reshuffle, those weaker small companies are often eliminated, especially when this industrial adjustment clarifies the premise of market concentration, what does it mean for small companies? It seems that there is no need to repeat. In addition, like most Chinese manufacturing industries, compared with internationally renowned auto companies, China's own-brand cars also have many problems such as lack of core technology, backward manufacturing technology, and low brand awareness. Any of these problems , for an advanced manufacturing industry such as automobiles, it means an insurmountable threshold.

Faced with such problems, the most popular solution at present is mergers and acquisitions, that is, taking advantage of the sluggish opportunities of advanced foreign companies to speculate on the bottom of the leaders at the lowest price. After the troubles in Detroit, the center of the US auto industry, things look very rosy for China, the world's largest auto market. When competitors are at their most critical moment, copying their low-priced high-quality assets at the lowest price and buying their century-old solid technology with the least amount of money, before that, this seems to be the dream of China's auto manufacturing industry.

Therefore, amidst the turmoil in the auto market this year, we see that Chinese companies are making frequent moves and starting an eye-catching overseas mergers and acquisitions battle. However, when we are keen on this kind of "cheaping" behavior, we seem to have forgotten an important point-in history, the cases of overseas mergers and acquisitions between auto companies, especially the mergers and acquisitions of leaders by laggards, are often There are many failures and few successes. Leaving the auto industry aside, we seem to have forgotten the many failures of Chinese companies in overseas mergers and acquisitions, China’s unique national conditions, and the fact that private companies can use funds to pay tuition fees in addition to state-owned capital. Not much, let alone forgetting that for Chinese automobiles, the reason why it is difficult to achieve a strong goal is not only the lack of technology, but also forgetting that what we need to learn is far more than simple capital operation.

In an era when the auto industry as a whole is in a downturn, Toyota alone has a single-quarter loss of US$7.7 billion, and economic recovery is nowhere in sight, how much can our auto companies gain from overseas mergers and acquisitions, and what can they do in the next 10 years? It is really an unpredictable proposition. The only thing we can know is that for the Chinese auto industry, there is still a long way to go to become truly powerful.