On September 17th, Andy Wilsonzai, head of Deloitte's automotive business mergers and acquisitions, made a presentation on the topic of “The Road to Further Integration: Mergers and Acquisitions”. In the past 12 months, China has become the global automotive market. Very large buyer.

Wang Ying, the deputy mayor of Shenyang, expressed concern about the frequent overseas mergers and acquisitions of Chinese auto companies. He has a rough conclusion: Chinese companies in the domestic mergers and acquisitions, more than 80% of initial operations are successful, and cross-border mergers and acquisitions, continuing operations have failed.

In fact, overseas mergers and acquisitions have been plaguing the Chinese auto industry. Four years ago, SAIC Group's acquisition of South Korea’s Ssangyong Motors went back and the negative impact on SAIC Group was not completely eliminated. After Geely Automobile's acquisition of Volvo this year, whether or not Volvo can be used as a popular car brand still faces challenges.

In the future, the internationalization of China’s autos should insist on mergers and acquisitions or alliances. The guests were enthusiastically discussed.

Vice Mayor’s M&A Concerns: Poor European Marketization of Technology and Manpower

Wang Ying, deputy mayor of the automotive center Shenyang, was a guest speaker at the forum and attended the “Future of Further Integration: M&A and Alliance”. Wang Ying is well-prepared because many companies in Shenyang are in a dilemma in overseas M&A. .

For overseas mergers and acquisitions of Shenyang auto companies, Wang Ying and local companies have a good business model, but the reality is not so simple. Wang Ying cited two examples to illustrate the problem.

In case one, a domestic automobile company acquired the products it had made in China after overseas mergers and acquisitions, and it just began to realize its expected business model and continued to expand. However, in the economic crisis in 2008, the company hoped to shrink its workforce. This caused disagreements with the union. Under the firm opposition of the trade unions, the company’s contraction has failed and it has caused businesses to run into operational difficulties.

In the second case, a Shenyang company developed new products after the completion of mergers and acquisitions. Some products were sold to China or Europe after completion of production in the other country, and some products were sold back to Europe due to cost constraints. This can't be done because the law doesn't allow it.

Wang Ying said that Shenyang's auto companies have encountered many problems in Europe, such as high manufacturing costs, poor human resource resilience, and strong trade union power. Many technologies want to be combined with Chinese manufacturing, but they are subject to legal restrictions. Many are not conceived. success. "A lot of Chinese companies didn't know what to do after they acquired a European and American company, which hindered Chinese companies' subsequent acquisitions of European and American companies."

M&A Experts Propose: Fully Analyze the Market Before Overseas M&A

For Wang Ying’s question, John Casesa, President of John Casesa, Inc., and former Global Director of Merrill Lynch’s Automotive Research Department, admits “China’s auto cross-border mergers and acquisitions are very difficult”, but he still encourages Chinese companies to go out for mergers and acquisitions.

John Casesa said that the problem now facing Chinese cars is that Japanese companies have encountered problems 30 years ago. During the economic crisis, Japan’s overseas mergers and acquisitions were affected by many cultural aspects. Later Japan adjusted its approaches and methods. The result was a huge success. It even occupied half of the US auto market. Chinese auto companies must also face such a process.

JohnCasesa believes that mergers and acquisitions must fully consider the cultural differences and backgrounds of the target countries. For cross-border mergers and acquisitions in the automotive industry, culture may be a top priority.

He said that the auto industry is very large and employs many people. There are many barriers in North America, Japan, and South Korea, which make foreign companies face difficulties in their operations, especially when cross-border mergers and acquisitions.

"I think that in Europe, the difficulty of mobility of people and technology is a problem, but European technology is very mature, and the technical level of personnel is relatively high. This is a useful aspect." He reminded that Chinese companies must analyze risks when they make decisions on mergers and acquisitions. Do not rely on experience to do things. Chinese companies still need to spend more time, energy and money on overseas acquisitions. They must try again and again. ”

The Tragedy of the Auto Union: There are no core technologies in domestic automobile enterprises

Compared to China's multinational companies in full swing mergers and acquisitions, China's autos and overseas auto alliances are relatively few. In fact, the alliance is also an important route to the sea.

Before that, the global automobile industry has formed many alliances, such as DaimlerChrysler, Renault-Nissan. Recently, Volkswagen has formed an alliance with Suzuki, and Daimler has also joined the new alliance formed by Renault-Nissan.

Andy Wilsonzai believes that the alliance between auto giants can share resources such as technology, R&D, and vehicle platforms to make both resources more effective. Most of the Chinese auto giants adopt domestic joint ventures to carry out joint production, and do not form a true strategic alliance. SAIC Motor Corporation is the forerunner of the alliance for automobiles to go to sea, but the SAIC and GM alliances only carry out joint development and technology research and development in overseas markets outside of the two countries. They do not involve the sharing of core engines, gearboxes, and platforms. Alliance.

According to Andy Wilson's view, China Automotive Group does not have the resources such as technology, research and development capabilities, and vehicle platforms that transnational autos want to share. Therefore, Chinese auto companies are not yet the preferred partners of multinational companies in their alliance strategy.

Andy Wilsonsai said that “China’s export of products to foreign countries is mainly based on the advantages of raw material and labor costs, which have impacted the interests of overseas enterprise markets. This can easily lead to resentment from foreign companies. If China has its own core technology in certain areas, then which country is also Can't stop you."