GAC Borrows GIO's GIO to Build Up Company with GAC Strengthen Joint Venture

In late July, a source revealed that Guangzhou Automobile and Gui'o are negotiating to establish a joint venture company and plans to build a domestic leading mini vehicle production company based on the Keo Xiaoshan base. According to the above-mentioned sources, the top management of the two sides has reached a number of consensuses in terms of share ratios, cooperation methods, etc. A cooperation sufficient to change the pattern of mini-vehicles and even the entire domestic automobile industry is in full swing.

First meeting

“Actually, in May, the leaders of the investment department of GAC Group had already had face-to-face meetings with relevant senior executives in Shanghai and Gao Auto.” The above sources told reporters.

This means that GAC has begun to consider making a difference in the micro-vehicle sector as it operates into the relevant operations of the main Changfeng Group. In the first half of this year, the passenger car market presented a "surprising" hot situation. Thanks to the adjustment of small-displacement purchase tax policies and the "automobile to the countryside" policy, micro-vehicles have become the most noticeable growth point. According to the data, SAIC-GM-Wuling, Chang'an, Hafei, Dongfeng Xiaokang, Jiabao and Changhe completed sales of 1.103 million units, which exceeded the sales volume of the previous year.

The microcar is obviously a short board to GAC.

“If this is really the case, I’m very optimistic about the prospect of cooperation between the two companies. From the perspective of the cooperation between Guangzhou Automobile and Changfeng, Guangzhou Automobile has great pressure after the introduction of the “Four Big Four Small” formula, and Gio’s products It can complement GAC's product line very well, "a longtime observer of GAC told reporters. "The so-called pressure is the pressure of the scale barrier and the pressure of independent brand building."

Return visit

On July 27th, the reporter called the person in charge of the investment and development department of GAC Group. She had denied that GAC and GIO had had cooperation discussions and stated that they had not participated in it.

The Guangzhou Automobile Group obviously does not want to disclose this matter prematurely. According to an open survey, the reporter found that the head of the Investment and Development Department of GAC Group visited Hangzhou, Zhejiang Province in May. On the 20th of this month, Nanjing Automotive Group transferred each one-third equity of Hangzhou Iveco Transmission Co., Ltd. and Transmission Technology Co., Ltd. to GAC Group. The responsible person attended the signing ceremony. From this, it can be inferred that there is a possibility of time and space for the leaders of the Investment Department of GAC Group and GIO to meet in Shanghai in May.

In fact, Jiangsu and Zhejiang provinces can attract GAC not only Iveco’s spare parts resources, but many vehicle companies gathered in the Yangtze River Delta region have fostered a region-intensive supply of spare parts and components. At the same time, East China is also a major center of automobile consumption. If they team up with Gio, GAC will radiate its own manufacturing chain from the Pearl River basin to the Yangtze River basin.

In late May, the exchange meeting on economic and social development between Zhejiang and Guangdong was held in Guangzhou. According to the aforementioned sources, at the meeting, the leaders of the two provinces had learned that Guangqi and Gio were in contact and had asked the two provincial development and reform commissions and related departments to pay attention to and coordinate the matter. And, just before and after the exchange meeting, the top level of GIO and GAC has achieved mutual visits.

consensus

On July 29, in order to further understand the details of the meeting and cooperation between the two sides, the reporter called the Industrial Development Office of the Zhejiang Development and Reform Commission. Director Dai Yicun did not directly answer whether he knew about the cooperation between GAC and GIO. He told reporters: "It's best for you to ask the parties directly."

The parties involved are tight-lipped, and the information provided by the sources is difficult to prove. The reporter’s investigation was in a predicament.

On July 30, a person close to Gio told reporters: Guangqi Gio has reached an initial consensus, Gio uses Xiaoshan base as fixed assets investment, and GAC invests equivalent funds to set up a joint venture, each accounting for 50% of the shares The management team still retains the original team of Gio. GAC provides management support for the new company. The goal of both parties is to expand the existing production scale and level, and to build a domestic leading mini vehicle base; the brand of the new company may use “GAC” "Geo" combination of this way.

At this point, the context of a genuine and undiscriminating cooperation has gradually become clear. Although all parties are reluctant to prove it, it is hard to believe that the whole matter is merely groundless.

“The current policy direction is very clear. It is to encourage cooperation, mergers, reorganization, increase the utilization rate of production capacity, and enhance the competitiveness of enterprises. Under this background, Guangzhou Automobile, which is outside the threshold of the new “four”, and Kyrgyzstan, which is in a critical period of rising, Audu needs to use external forces to achieve its goals,” a senior industry observer told reporters. “I'm not surprised at all.”

View related topics: China's auto industry recommence mergers and acquisitions wave

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