The Oaks Group, which has risen in the air-conditioning industry in recent years, reported that its newly-established car preparation group is looking for acquisition targets. It has already targeted Jiangxi Isuzu and Jiangxi Fuqi and is expected to control at least one of them. In May this year, the refrigerator giant Xinfei began to get involved in the production of refrigerated trucks; Greenkell is negotiating with Yaxing Bus on the acquisition; Guangdong Meimei Group, a giant in the home appliance industry, has also announced that it plans to invest 2 billion yuan to build Yunnan Beauty. Motor City. All this seems to indicate to people that the home appliance industry has begun to enter the auto industry in large numbers, and that it is now advancing into the automotive industry.
First, change to build a car: good in response to the situation Why do so many household electrical appliance companies have been involved in the automotive industry? The most direct reason may come from the home appliance industry itself: First, the market share and popularity of domestic home appliance companies in the industry have reached a certain level. In a mature market environment, the market share and brand have stabilized, and the home appliance industry profits. It is becoming increasingly thin. Therefore, if the scale and profit of home appliances are to climb further, unless there is a large amount of R&D investment, it will be difficult to make breakthroughs. Second, after many years of “fightingâ€, home appliance companies already have relative resource advantages such as brands and channels. If you only hold one industry, the risks will be great. Therefore, it is imperative to seek for diversified development. The third is that the early years of profit make these companies hold a lot of funds in their hands, hoping to get higher returns in the turnover, which is a contradiction with the main business of low profits. Under such circumstances, the lucrative automobile manufacturing industry will naturally become the main target for home appliance companies.
People in the industry believe that although the current competition in the auto market is becoming increasingly fierce, the average profit margin of its products is around 20% to 30%, which is more than three times higher than the average profit rate of the household appliance industry. This alone can cause the interest of many home appliance companies to enter the automotive industry, which has been recognized as having a high profit margin. It seems to be a good choice.
Another objective reason is the rapid growth of China's auto industry in recent years.
Judging from the development history of the Chinese auto industry for several decades, the development speed in the 1990s was significantly faster than that of the 70-80s. The growth rate in the first few years of the new millenium has accelerated markedly, and the production and sales volume of domestic cars is still 30. The high-speed growth rate of over 5 percent has risen to the top 5 in the world rankings. From the perspective of the party’s policy environment after the 16th CPC National Congress, there are still many favorable conditions for China to further develop the automobile industry, build a well-to-do society in an all-round way, and raise people. The income will create more high-quality consumer demand for the automotive market; the continuous improvement of infrastructure will provide an increasingly superior hard environment for automobile consumption; and the adjustment and improvement of automobile industry policies will also contribute to the development of the automotive industry. Vehicle consumption provides more powerful motivation.
All of these things have shown a bright future for home appliance companies eager to break through, attracting them to join in the seductive "cake" of car industry.
Second, Zhongzhong light passenger blossom everywhere ----- Chunlan: Choose heavy truck
Among the many household electrical appliance companies involved in the automotive industry, Chunlan is one of the earliest and more successful companies. In 1997, Chunlan took advantage of its strong financial strength to acquire and establish Nanjing Chunlan Automobile Co., Ltd., a subsidiary of Chunlan Automatic Vehicle Co., Ltd. It is understood that the company’s total capital is 720 million yuan and the registered capital is 450 million yuan. The first phase of the first phase of technological transformation amounts to several hundred million yuan. In March 2001, Chunlan began mass production of five series of medium- and heavy-duty trucks, including standard trucks, vans, tow trucks, and dump trucks.
It was said that Chunlan at that time captured the domestic luxury truck product, and launched the "luxury truck in the country" as it was in 2001. Therefore, the production and sales growth of Chunlan in the first half of 2001 was very rapid, with a continuous increase of 30% every month. In October of this year, Chunlan's production and sales of medium-duty trucks have been pressed hard by the two giants of the domestic auto industry, and they have ranked third in China.
From the relevant information, the current Chunlan products are mainly two large blocks: home appliances and automatic vehicles, sales of home appliances accounted for 60%, nearly 40% of the automatic car; and household electrical appliances, air conditioning accounted for 70%, 80% of auto cars. In other words, in Chunlan's entire industry support, air-conditioning only accounts for 42%, and emerging automobiles account for 32%, which is only a difference of 10%. Therefore, people in the industry have stated that Chunlan has entered the automotive industry in such a large scale and he wants to completely break out of the home appliance industry. Chunlan also said that entering the auto industry has chosen more profit growth points.
------ Xinfei: Selecting Special Vehicles Not long after the announcement of CNHTC entered the Xiaoya Electric Appliances, Henan Refrigerator giant Xinfei also announced that it has formally entered the special-purpose vehicle manufacturing industry. The first batch of 30 new refrigerated trucks had gone offline at the beginning of June this year and were delivered to users.
The new products that the company had previously led were mainly refrigerators, freezers and air conditioners. This year, Xinfei invested nearly RMB 100 million to launch its new product, the refrigerated truck. According to Li Gen, chairman of Xinfei Group, this is a fierce competition in the home appliance industry that is forcing Xinfei to choose a diversified road.
Li Gen believes that this new flight uses its original advantages in refrigerators and air-conditioning technology, and relies on refrigerated trucks, insulated cars and vans to enter the auto industry. In addition, there are a large number of supporting manufacturers and vehicle manufacturers and converters for parts processing for automakers such as Beijing Cherokee, Nanjing Iveco, Shanghai Santana and German Volkswagen. If these resources are integrated, they can quickly have a complete automotive manufacturing industry chain.
Another reason why Xinfei preferred refrigerated trucks to cut in, it is said that the refrigerated transport rate in developed countries is over 50%, while China only has 15%. Therefore, Xinfei is very optimistic about this market prospect.
---- Beautiful: Choose a bus?
The same is the home appliance business, and the duckling electrical appliance is reorganized differently by the automobile enterprise --- the United States may reorganize the automobile enterprise.
Recently, there are rumors that the United States will have to enter the main passenger bus. It has been revealed that there are two main proposals currently under consideration: First, overall mergers, and first, joint ventures. According to the concept of the United States, Midea will invest 1.7 billion yuan in the next five years. With this project as an opportunity, it will gradually become involved in the production of passenger cars, trucks and cars. Five years later, the auto sector will become the new pillar industry of the United States, with an annual sales income of 5 billion yuan.
Insiders pointed out that although this news has not yet been confirmed, it is obviously not groundless because the relevant persons of the United States Group have stated that entering the automobile industry will be a major diversification strategic decision of the Midea Group.
---- Kelon: Will you choose Yaxing?
If Chunlan, Xinfei, and Midea’s autos all have the slightest chance of industrial transfer, they have just purchased a large number of refrigerator production lines. Kelon, which is currently waiting for the best, should not look at the profits of the auto market again. Now. There are many places where there are profits, and wherever there is no profit, it is where to buy.
However, Kelon’s upcoming acquisition of Yaxing Bus still surprised us. Although Gu Long, the president of Kelon, was silent about this, it was not difficult for Kelon to select a refrigerator production base with a total investment of US$ 400 million in the construction of 1180 mu of land in Yangzhou. Gu’s interest in Yaxing is not an issue.
Although Kelong’s choice is still a mystery, the industry has expressed doubts about Kelon’s strength and ability to enter the auto industry. Most people hope that Gu Chujun can do business through industry and consolidate the industry’s trust in Green Coell’s hard-won efforts. .
Third, such a large-scale dilemma of access to risk and opportunity, said: "Now to make a car is like making refrigerators in previous years, to catch up with this bus, the fool can make money." For Chunlan, Xinfei, Midea and Kelon, The high return on investment of the domestic auto manufacturing industry does allow them to smell the fresh money. However, after all, it is not "fools" who can build cars. Successful entry into the automotive industry through mergers and acquisitions does not mean that they can succeed in the automotive industry. Switching home appliance companies need to develop more risks than opportunities.
First of all, there are too many disadvantages for home appliance companies in product manufacturing.
As we all know, capital, technology, and cost are the three major elements of product manufacturing. From the perspective of funding, although the automotive industry is now among the top players in the home appliance industry, the family is not thin, but 2 billion yuan, 3 billion yuan can not match the 1 billion euros invested by BAIC and Mercedes-Benz (about 90 (100 million yuan) is less than the 16.7 billion yuan that Dongfeng and Nissan invested in the joint venture project; from a technical point of view, the home appliance companies themselves have no ability to develop automotive products. Even if Chunlan trucks do well, their main Cheng and spare parts are all products. The fear is that once FAW and Dongfeng release their energy from the cars, they will exert force on trucks, especially the domestic large and excellent parts and components companies are almost all made by mainstream domestic automobile manufacturers. For the sake of competition, the household appliance companies simply cannot get the most competitive configuration. From the perspective of manufacturing costs, the threshold for independent research and development of Chinese autos is high, and it needs the support of necessary conditions such as market, capital, technology, and parts and components support systems. The development of a new type of vehicle will inevitably require hundreds of millions or even billions of dollars. There is no scale for millions of vehicles, and companies cannot afford to share huge amounts of money. Hair costs, but no way to deal with the auto market price war intensified.
Secondly, in market sales, the long-term market operation experience and sales channels that household appliance companies have accumulated may be weak. For home appliance companies, their product lines, marketing channels, after-sales maintenance and other aspects have no coincidence with the automotive industry, which means that it is necessary to re-establish a sales model and channel in a relatively mature competitive area. The transformation of the original auto companies into new market segments will not only have a much higher risk, but will also put a heavy burden on the company. In terms of maintaining the brand, the average consumer believes that the home appliance manufacturing industry belongs to an industry with low technological content and a simple product structure. The automobile manufacturing industry belongs to an industry with high technological content and a complex product structure. Consumers can believe that good car manufacturing. A business can create good home appliances, but it may not believe that a good home appliance manufacturer can make a good car. If it is not careful, if the original brand of the company is damaged or weakened, it will lose his wife.
In addition, for home appliance companies with smaller profit margins, there is a big risk that after implementing cross-industry, unrelated diversification, there will be several unfavorable situations: Some companies will be abandoned due to lack of financial strength, and some will Due to the lack of specialized personnel, they were overwhelmed. Some were busy promoting sales because there was no marketing channel, while others threatened the original industry and led to bankruptcy. We must know that diversification is always a "double-edged sword". It works well and can promote the rapid development of the enterprise. If it is not well-run, it may become a heavy burden to drag the company. The failure of the first diversification of the home appliance industry is a clear testimony. Not to mention the newly emerging diversification is the fact that after everyone has taken advantage of the first wave of diversification to circulate on many household electrical appliance projects, they find that there is not much or no benefit at all. There is little or no connection between the “capital exodus†and the industries that enter the industry, and the risks are as large as one can imagine.
We can also see that although the profits of automotive products are currently high, but as more and more companies want to share a share in the auto market, the market competition is becoming increasingly fierce. After many price cuts, the profit margin of automotive products is gradually reduced. . Some professionals believe that the automotive industry is likely to revisit the path taken by the Chinese home appliance industry. That is, starting from a more decentralized industry group, the production capacity has increased substantially and then it has been let down, resulting in a price war. Eventually, the market competition will lead to integration and concentration. . It is not impossible for home appliance companies to choose to enter the automobile industry, which is already smoking, at such a time when it is raining.
Therefore, on the long road to building a car full of thorns, household appliances companies must be careful, after all, opportunities and risks are always a pair of twin brothers, and we as consumers can only wait and see.
Attachment 1: Household Appliances Companies Entering the Automotive Industry List Corporate Project Progress Chunlan Heavy-duty Truck Heavy-duty Truck Seventh-US Yunnan Midea Motor City has signed an agreement with the US acquisition of Sanxiang Bus No results US acquisition of Liuzhou Wuling No results Duckling CNHTC restructuring Duckling is underway China Green Cole's acquisition of Yaxing Bus No results Oaks Holding Jiangxi Jiangxi Fuqi Underway Oaks Holdings Jiangxi Isuzu is in progress Oaks Nanjing Automobile is in contact with the first batch of Sino-Singapore Special Vehicles Off the assembly line (Source: State Council Development Research Center Industry Economic Research Department)