State-owned Assets Supervision and Administration Commission has approved the Changjiang River Base in Jiangxi Province to be separated from the Central Enterprise Chang'an

Without Chang'an taking control of Changhe, it is too late to enjoy the solitary freedom and will be taken by the next merger.

Our reporter was informed that the SASAC has approved that the Changjiang River Base in Jiangxi Province has been separated from the central enterprise Chang'an and returned to the jurisdiction of local governments in Jiangxi Province. However, the Changhe Hefei Base still belongs to Chang'an and becomes the production base of Changan Automobile Mini Vehicle. At this point, Changhe will also be transformed from a state-owned enterprise to a local state-owned enterprise controlled by the State-owned Assets Supervision and Administration Commission of Jiangxi Province.

Changhe is divided into two, and two vehicle production qualifications are owned by Jiangxi Changhe and one is owned by Hefei Changhe. After the dream breaks Chang'an, who will become the continued dreamer of Changhe? Judging from the current news, Beijing Auto seems to be fully confident that the news of the cooperation between the two parties will be formally announced by the end of October. After the National Day holiday, Jiangling Motors officially submitted a merger and reorganization plan to the Jiangxi Provincial Government to make the final game for the integration of Changhe Automobile. Although "remarried women", Changhe is still sought after by Beiqi and Jiangling.

Beiqi plot

"At the end of this month, I estimate that the first merger and reorganization project in the Chinese automobile industry will settle the dust." On October 14, Xu Heyi, chairman of Beijing Automotive Industry Corporation, disclosed the latest progress of the merger and reorganization of BAIC Group.

It is reported that in June this year, senior executives of China’s Chang’an had already signed up to agree to Changhe’s departure from Chang’an in China. In early October, Changhe was officially separated from Chang’an. Coincidentally, sources close to the Changhe Automobile disclosed that Changhe, who had left Chang'an, will announce exactly where the flowers will fall during the Porcelain Fair held from October 18 to October 22. This time coincides with Xu’s allegation that mergers and reorganizations will be basically achieved at the end of the month. Therefore, Xu Heyi’s position is also interpreted as the cooperation that will soon be reached with Changhe, which has been continuously rummaging over time.

Once the signing of the contract is successful, BAIC will become the largest shareholder of Changhe Auto in the future, the SASAC of Jiangxi Province as the second largest shareholder, and the SASAC of Jingdezhen as the third largest shareholder. It is learnt that after BAIC and Changhe reached a cooperation, Beiqi promised to maintain the current Changhe Automotive management, but it will send a financial officer to serve as deputy general manager.

In fact, the embarrassment for Changhe originated from Beiqi’s intention to become the top three long-term development target of the auto industry. Xu Heyi stated that by 2015, BAIC will achieve sales revenue of over 400 billion yuan, and the production and sales will exceed 3.6 million units; by 2020, BAIC sales revenue will exceed 650 billion yuan, and the production and sales will exceed 5 million vehicles. "At the same time, we must enter the world automotive industry. The top ten is entering the top three in the Chinese auto industry."

In Changhe, the most intuitive change is the subtle changes in the ordering of BAIC and Changan in China's auto industry. This will undoubtedly help BAIC enter the top three teams as soon as possible. In the first nine months of this year, the sales of BAIC Automobile reached 1,474,300 vehicles, a year-on-year increase of 22.7%, ranking fifth, lagging behind that of Changan Automobile's 160,000 vehicles. At present, Changhe Auto sells about 100,000 vehicles a year. After BAIC has integrated Changhe, it will use this to narrow its sales gap with Chang'an.

On the other hand, according to the plan, Beiqi's merger goal has been locked in state-owned enterprises with advanced technologies and micro-vehicle production qualifications. Changhe just meets this demand. According to statistics, Changhe Automotive has an annual production capacity of 300,000 complete vehicles and 150,000 engines, which will directly fill the gap in the micro-vehicle field. With Changhe's location advantage, BAIC will enter the southeast region and complete its strategic goals for its national layout. From this point of view, Beiqi's acceptance of Changhe is also due.

However, the auto industry analyst Zhong Shi does not seem to think so. “Xu Heyi’s words are not necessarily pointing to Changhe. For Beiqi, there are many partners who can choose to expand the scale. There are many who can’t say specifically.” And BAIC-related The person-in-charge in the face of mergers and reorganizations at the end of the month has also euphemistically declined interviews with reporters, saying that there is no more information to disclose. It seems that there is still a bit of mystery about Changhe's re-marriage in Beijing.

Jiangling shows good

It is far more than Beiqi that intends to integrate Changhe. Jiangling Motors, which is located in the same province as Changhe, is also an irreproachable competitor.

After the National Day, the news that Jiangling submitted the reorganization plan and made the final game for the integration of Changhe was frequently reported. For a time, the discussion on Changhe's reorganization of the “new wife” was very swift.

"At present, I'm not sure, it's inconvenient to say." Wan Ling, the secretary of Jiangling Motors, refused the reporter's interview.

"Because of geographical factors and local government support, the possibility of cooperation with Jiangling will be even greater." Zhong Shi told reporters that as the largest automobile manufacturing enterprise in Jiangxi Province, Jiangling Group has developed quite eye-catching in recent years. According to the data, Jiangling Motors Corporation’s main business, Jiangling Motors, exceeded 200,000 units in 2012. In the first half of 2013, its output increased by more than 7%, reaching 111,500 vehicles.

As a leading company in commercial vehicles, JMC has had little success in its entry into the field of passenger cars. In 2010, Jiangling announced that it will cooperate with Ford in the production of Jiangling Yusheng SUV models and officially entered the passenger car market. Since then, JMC has not shown any improvement in the field of passenger cars.

With the increasingly close relationship with Ford, the desire of the two in the field of passenger cars is even more urgent. In April of this year, JMC’s second-largest shareholder, Ford, increased its stake in Jiangling Motors from 30% to 31.5%. On September 28, Jiangling Motors issued a board resolution that said the board of directors approved the establishment of Jiangling Motors Sales Co., Ltd., a wholly-owned subsidiary of the company, and appointed Li Qing, vice president of the company, as legal representative and executive director of Jiangling Motors Sales Co., Ltd. The proposed business scope is to wholesale and retail automobiles and related parts and components and provide related services.

In fact, for Jiangling, Changhe is indeed a good candidate for cooperation. Changhe’s technological advantages in core components such as passenger car engines will provide Jiangling with the most direct help. Jiangling, as a listed company, will also provide financial support for Changhe to help it out of its predicament.

Another advantage of Jiangling is that it belongs to Jiangxi Province with Changhe. In the merger and integration of Chinese auto companies, the government has played a crucial role. From the government's point of view, there is no doubt that the province's automobile integration will increase the overall competitiveness of the automotive industry in Jiangxi Province.

As one of the pillar industries in Jiangxi Province, the automotive industry once occupied more than 20% of the industrial output value of above-scale industries in Jiangxi Province in 2012. Zhong Shi told this reporter: “Corporate effectiveness is related to the achievements of local governments. Local enterprises hope that companies do a good job.” Local governments, after all, have practical considerations such as local GDP and local employment rate. It is indeed not easy to put away this invisible hand.

It is worth noting that cooperation with Jiangling is not without obstacles. The major shareholders of Jiangling Motors are Jiangling Holdings and Ford Motor Co., while JMC is jointly established by Changan Automobile and Jiangling Group. Jiangling, Ford, and Chang'an have a delicate relationship. How to balance the relationship between the parties is perhaps a matter of considerable importance.

For Changhe, the future is an unknown whether it is with Beiqi or Jiangling.

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