Is the commercial vehicle market a blessing or a curse for the car market?


Jianghuai and Jiangling Motorsport, which has made great achievements in the MPV market, will build passenger cars; Foton, which won the industry's first place in the light-duty truck field, announced its determination to develop cars in the “Eleventh Five-Year Plan”; and the Great Wall, the “leader” of the economical SUVs. The launch of the sedan car project...... The tide of amateur car makers and other amateur builders has not yet subsided, and many domestic commercial vehicle companies have begun to invest in this fiercely competitive market. In 2006, when the government repeatedly expressed concern over the overcapacity of cars and repeatedly had to control the car projects, these commercial vehicle companies were eager to enter the car industry.

At a recent press conference held by JAC Motor Show in Hangzhou, the sedan project once again became the focus of attention. Although JAC did not make a clear statement, it is reported that the JAC Group's sedan project has been approved by the National Development and Reform Commission. Its car base will be located in Hefei, with an annual design capacity of 300,000. The mid-range sedan will be its market entry point.

Beiqi Foton, known as the "China's No. 1 Commercial Vehicle Company," began to carry out project feasibility studies for passenger cars as early as a few years ago. At present, it has formulated a clear strategy for car development. According to reports, its flagship product will be an economical car with a price of less than 100,000 yuan. Coincidentally, JMC has also selected a car project to start production in the Xiaolan Industrial Park in Nanchang, with a target output of 100,000 vehicles. The first car will go offline in September this year and the price will be below 100,000 yuan. In addition, Great Wall Motors has also made preparations for the transition. At present, it has built a production base of 200,000 passenger cars and will launch 1.0-liter and 1.6-liter cars at the end of the year.

These commercial vehicle companies, either encountering bottlenecks in the development of their original fields or moving out of strategic needs, have entered the car market one after another. Even if the “blowout” tide in the auto market has gone and the price war has intensified, they will have to catch up, because in the eyes of these companies, car profits as consumer goods are more profitable than commercial vehicles, and therefore more attractive to them. In addition, these companies also have great ambitions, and strive to become a full range of comprehensive automobile manufacturers, car projects have become the goal of development.

In the face of these companies' lofty slogans, one can't help but ask questions: Is the in-car project really a good way out? Nowadays, in the field of cars, price wars are being staged almost every day, and new cars are also being released. Consumers are no longer allowed to behave like manufacturers and shop around. The intensified competition has led to a reduction in the profits of car companies year by year. According to statistics from the National Bureau of Statistics, the average profit of the auto industry in 2005 was only 4%, even lower than the overall level of domestic manufacturing. In 2006, the overcapacity in the automotive industry was also repeatedly mentioned. It is reported that the overcapacity capacity of the automotive industry has reached 2 million vehicles, and the utilization rate of the automobile capacity is less than 60%. In this situation, commercial vehicle companies have entered the car market one after another and are bound to take enormous risks.

In addition, with the fierce competition in the car market, in the case of rising prices of raw materials and other means of production, the lean production of the car industry and the control of production and management costs have become an important factor in determining the success or failure of enterprises. After commercial vehicle companies enter the sedan, the bigger the spread, the financial issues and how to balance the relationship between commercial vehicles and cars, how to carry out strategic layout will become a big problem. More crucially, to enter the field of cars, channels and services will be the top priority. Although these companies have made great achievements in the field of domestic commercial vehicles, but have no experience in the field of cars, channel construction and supporting services must be repeated from the beginning.

Apart from these discussions, these companies will also face many policy barriers. In view of the overcapacity in the automotive industry, the state has very clear regulations for advancing the adjustment of the industry structure and requires that “all newly-built automobile production enterprises and existing enterprises’ production investment projects across product categories, in addition to meeting industrial policy requirements, must To meet the conditions of independent brands and self-developed products." The shift of commercial vehicle companies to cars is a "cross-product production investment project," so they can't choose a joint venture partner at least at this stage. Whether or not their own R&D products can be recognized by consumers is also a problem.

Some industry sources stated that in the market where the joint venture’s products play a major role, it is very difficult to expect the products developed independently to be available on the market because its brand, technology, and services are all in a weak position. Even if they make a fuss about the price, it is difficult to Joint ventures hard fight. Looking at the current domestic car sales market, mid-size cars are almost completely divided by several joint ventures, and the small-displacement and economical family car sector is a melee. If a commercial vehicle company fails to obtain market recognition for a car produced, it is bound to use its profits from commercial vehicles to subsidize the car. In the long run, it will inevitably not lead to a vicious cycle.

Appliance companies are testing the water industry

Not long ago, the home appliance giant Xinfei Group announced that it will invest 1 billion yuan again in the automobile industry. On the one hand, the NDRC has repeatedly stressed the need to further macro-control the automobile industry. On the one hand, the automobile industry has emerged as the “triple production” of many home appliance companies. Will this increase auto overcapacity? Is it true that various industries can really make a difference in testing the automobile industry?

As early as November 1997, Chunlan Group, a well-known household electrical appliance manufacturing company, took over Nanjing Dongfeng Motor Company with 720 million yuan and established Nanjing Chunlan Automobile Manufacturing Co., Ltd. In March 2001, Chunlan began mass production of medium-heavy trucks. In October of the same year, the production and sales volume of the trucks ranked third in China. With the demonstration effect of Chunlan, building a car has become the fashion concept of the Chinese home appliance industry for a time. Xinfei, Oaks, Konka, Skyworth, TCL, Haier, Shinco, Amoi, and Midea have successively participated in the automotive battlefield. At that time, the huge profit margins of cars and the fierce competition of home appliances became the “heat source” for this boom. However, after the "Aux delisting," they sounded the alarm. Oaks had invested 40 million yuan to acquire a 95% stake in Shenyang Shuangma Automobile and stepped into the automotive industry. In February 2004, it officially entered the automotive industry. Its original power and Ruituo two vehicles began to enter the market, and they swept all the way, vowed to build in 5 years. Annual output of 450,000 vehicle industry image. But unfortunately, the products could not open the market, but the huge amount of investment did not see revenue. In March 2005, Oakes had to announce the withdrawal of the whole line from the auto industry. A car dream soon came to an end. This is the epitome of most home appliance companies.

The problem that is prevalent among ethnic enterprises is the lack of core technologies and they have to be led by the nose. In this situation, even household appliances companies with huge capitals can hardly make a difference after entering the automotive industry. In addition, due to different industries, the original sales network and branding effect of the company needs to be rebuilt. This will inevitably increase the investment cycle of the company and increase the investment quota, which runs counter to its original intention. Therefore, we did not see many cars driving under the banner of home appliance brands in the streets. On the other hand, the state has also responded to this, and the "Automobile Industry Development Policy" implemented on June 1, 2004 made it prohibitive to use "shells" to build cars, and at the same time raised capital entry thresholds: Newly-built automobile manufacturers For investment projects, the total project investment should not be less than 2 billion yuan. All of this makes the auto industry face a new pattern. Until 2005, the enthusiasm of the layman's "build a car" can be said to have receded. Now, why does the Xinfei have to “punch out” the auto industry? Is it the discovery of a new profit point or the possession of the core technology of the car? This is not known, but now the situation in China's auto market is facing a more severe situation, which is obvious to all. International capital has fully landed domestically. In the aspects of capital injection, model introduction, financial credit, automobile culture and other aspects, foreign manufacturers have increased the “full penetration” and control of the Chinese automobile industry. In this case, national automobile companies must have It will be more difficult and risky. In addition, the problem of overcapacity of automobiles has also become increasingly prominent. The “Circular on Accelerating the Adjustment of Overcapacity Industries” promulgated by the State Council has made it clear that the automobile industry is one of the industries with overcapacity. If it is said that Xinfei’s involvement in the auto industry is in line with the trend, this time it is upside down. The authoritative investment company Goldman Sachs Group in the "Global Automotive Industry Assessment" report warned that: The biggest risk in the future of the Chinese auto market will be excess production capacity and a sharp drop in prices. Overcapacity will inevitably lead to increased competition and lower profits. As a result, will the newly-flying Xinfei not regret this investment?

The cover of the vehicle in front of the vehicle is a lesson. We don't need too many Oaks to warn us. The pursuit of profit and multi-line development of the enterprise development model is understandable, but through the introduction of technology, joint venture development, and then by its own independent portal, forming its own brand of home appliance line is not suitable for the automotive industry, easy water testing technology and capital-intensive auto industry It will be dangerous.


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