34 car companies face a new wave of mergers and restructurings or delisting

Recently, after more than two years of “window period” of rectification, of the 92 auto companies that had been required to be rectified by the Ministry of Industry and Information Technology, 34 still did not meet the access conditions, which means that they will be disqualified and quit the industry. . Among them, Dongfeng (Shiyan) special commercial vehicles, Shanghai CIMC, Lianyungang Wuzhou, CNHTC Fujian Special Vehicle, and Central Power (Beijing) Heavy Vehicle Co., Ltd. are impressively listed. This is the second batch of special publicly-reported companies since the automotive industry established the exit mechanism for backward enterprises, which means that these 34 companies will soon withdraw from the Chinese market.

China's auto companies have mostly started in the era of grasshoppers, and even some companies are still in the initial stage, and their products are positioned at the low end. Therefore, there are quite a few time-consuming or semi-discontinued productions. There is little or no output, and it is difficult to survive. The backward enterprises that maintain normal production and operation. The auto industry analyst Zhong Shi told the Times Weekly reporter that “zombie enterprises” should be withdrawn in fact long ago, but at that time may take into account various local interests and other issues, has been dragged on without resolution. However, from the beginning of 2012 until now, supervision has obviously been strengthened. Repealing the production qualifications of some auto companies that have lost their production and operating capabilities and eliminating ineffective production capacity is an inevitable choice for the entire automobile industry in technological transformation and transformation and upgrading.

58 auto companies escaped

Prior to the Ching Ming Festival, the Technical Service Center of China Aircraft Engine Co., Ltd. issued the "Notice on the suspension of the "Announcement" of some companies, which involved 34 companies. The China Machine Center explained that this is the second batch of the list of vehicles produced by the Ministry of Industry and Information Technology. It has a total of 92 auto companies. After two years of rectification, 58 companies have survived. After the special public notice period expires, if the 34 companies still fail to apply for the assessment of access conditions or fail the assessment, the list of companies will be reported to the Ministry of Industry and Information Technology. In other words, the Ministry of Industry and Information Technology is likely to forcibly cancel the production qualification of these auto companies.

According to the category of enterprises, among the 34 non-compliance enterprises, there are 4 bus companies, 9 motorcycle companies, 4 special-purpose vehicles and other groups, and 17 special-purpose vehicles and conversion factories. Among them, there are no lack of some of the more well-known companies. For example: Dongfeng (Shiyan) special commercial vehicle products cover a full range of heavy, medium, light, micro-duty trucks, special vehicles, special vehicles, passenger cars, and automotive power components; Zhonghuan Power (Beijing) Heavy Vehicle Co., Ltd. is a Beijing heavy-duty vehicle. The joint venture between the manufacturer and Singapore Tech Power was established in April 2004; Shandong Wendeng Panthers Co., Ltd. also has more categories, including light and micro-load vehicles, dump trucks and hydraulic excavators.

It is understood that the "Specially Publicized Vehicle Production Enterprises (Second Batch) Notice" issued by the Ministry of Industry and Information Technology was released in December 2015. In the following three months, the Ministry of Industry and Information Technology of the Ministry of Industry and Information Technology released the catalogue of "Road Motor Vehicle Manufacturing Enterprises and Products (No. 281)" and directly eliminated the production qualifications of 13 passenger vehicle companies. The list includes Shuanghuan Automobile Co., Ltd., Qingling Automobile (Group) Co., Ltd., and JAC Anchi Automobile Co., Ltd. All of them have stopped selling passenger cars since January 1, 2017. Among them, Shuanghuan Automobile's SCEO, small nobles and other models were once well-known to consumers, but because these models are "plagiarism" luxury cars, also known as the originator of domestic "cottage". Qingling Auto Group was once one of the 15 key enterprises in the Chinese auto industry. It was led by Qingling Automobile Co., Ltd. It has 10 major component subsidiaries and more than 200 supporting companies. Currently, Qingling Motors has stopped production of passenger cars, but Qingling Automobile Group's wholly-owned and holding company clusters still retain relevant production qualifications and are normally producing and selling.

Car delisting system launched for 6 years

Cui Dongshu, Secretary-General of the Federation of Travel Unions, told the reporter of the Times Weekly that the earliest express provisions of China's promulgation can be traced back to 2012 on the withdrawal of outdated auto companies. In that year, the Ministry of Industry and Information Technology released by the Ministry of Industry and Information Technology on the establishment of the exit mechanism of the automotive industry notice mentioned that in order to accelerate the transformation and upgrading of the automotive industry, improve the core competitiveness of auto companies, the establishment of backward companies in the auto industry exit mechanism. In this way, the "life tenure" of the auto industry's production qualifications was broken. Prior to this, the Chinese government issued the "Auto Industry Industrial Policy" in 1994, which stipulated that automobile companies must obtain the approval of the relevant state departments and enter the catalog when they want to produce automobile products. This means that the auto industry has only entered, even if the company goes bankrupt, Still retain production qualifications.

In 2013, one year after the auto industry’s withdrawal system was implemented, the Ministry of Industry and Information Technology published on its official website the list of the first 48 “disclosure” car companies. In this "Specially Publicized Vehicle Production Enterprise (First Batch) Notice", Lanzhou Yutong, Yunnan Meimei Bus, Jilin Tongtian, and Harbin Bus Factory are included. Among them, Lanzhou Yutong, which was established in September 2003, originally belonged to Yutong Group and was later sold to Zhengzhou Yutong. Zhengzhou Yutong also did not intend to increase investment. Later, the Lanzhou City Government plans to relocate Lanzhou Yutong Assets to cooperate with the youth car company to produce large passenger cars. The former is the Geely Jiangbei Machinery Factory. In the early 1980s, it was one of the 12 bases that the country designated to produce cars. It is famous for the production of Alto cars, and the brother of Li Shufu, chairman of Geely Group. Li Shubin and Yin Mingshan, chairman of Lifan Group, all tried to reorganize Jilin Tiantian. However, no one succeeded. After that, Lifan Motors, Qianjiang Motorcycles and Jiangbei Machinery Manufacturing Co., Ltd. are preparing to jointly invest in Jilin Tiantian Automobile, which still has no results. In the end, after a two-year rectification period, 14 car enterprises were suspended from vehicle production qualifications, 12 companies submitted applications for assessment of access conditions, and passed assessments to resume acceptance of their new product declarations.

In the six years since the delisting system was introduced, the second batch of vehicle manufacturers that specializes in public announcements also ended the two-year rectification period. 92 companies including automobile manufacturers, passenger cars and special transport vehicle manufacturers, and motorcycle manufacturers On the list, there are currently 34.

Zombie companies no longer have the ability to survive

The “Notice of the Ministry of Industry and Information Technology on Establishing the Exit Mechanism for the Automotive Industry” clearly stipulates that “an enterprise that cannot maintain normal production and operation” refers to “the annual sales volume is zero or very small for two consecutive years, and fewer passenger vehicles are used in it. In 1000 vehicles, fewer than 50 large and medium-sized passenger vehicles, less than 100 light passenger vehicles, less than 50 medium- and heavy-duty trucks, and less than 500 light-duty trucks. Enterprises that meet the above conditions are classified as "zombie car companies." ". This way, the Ministry of Industry and Information Technology announced two batches of car companies on the announcement list, a total of 140 "zombie car companies", but most of them are "rigid" and do not die, and even become sought-after "shell resources."

It is understood that when 2015 was the most frenzied time to buy “shell resources”, there were no less than 10 companies that issued and sold information on the production of various types of depots. At that time, the market value of a "shell resource" was estimated to be around one hundred million yuan, and most of them have now been traded and even completed. According to industry analysts, the government has issued a lot of production licenses in the past, and all of them are "tenured". This causes the "shell" to be very valuable. Although many auto companies are heavily indebted, the "shell resources" they have survived. Lead to a variety of car manufacturers in China mixed. According to statistics from 5 years ago, there are more than 1,300 vehicle manufacturers of various types in the country, of which 171 are automotive vehicle companies, 120 are motorcycles, 900 are special-purpose vehicles, 135 are three-wheeled vehicles, and 135 are low-speed trucks. In a large number of production enterprises, some car companies did not actually achieve a reasonable output, or even on the verge of bankruptcy. Up to now, there are 184 automobile manufacturers in China, and if the statistics are based on the group's caliber, there are also 76 companies. In addition, the number of modified car companies is as many as 1,056. Although we can eliminate dozens of companies this time, it is basically useless. The most important role is to limit the trading of "shell resources" and avoid "zombie enterprises" from reviving their bodies.

In the next 3-5 years, Chinese auto companies may usher in a small upsurge of mergers and reorganizations. Breaking the lifelong system of production qualifications is a clear signal. It aims to increase the scale and concentration of auto industry and increase the competitiveness of Chinese auto companies. Enterprises through competition to increase access to the scale, cost, technology, brand, etc., but also should speed up asset optimization through market competition, to achieve the survival of the fittest.