AutoBeta(AutoBeta.net)03/19 Report--

Shenzhou Youche issued an announcement saying that it plans to accept 67% equity of Baowo Automobile held by Changsheng Xingye, and the equity transfer price is 4.10911 billion yuan. Upon completion of the transaction, the company will acquire a controlling stake in BOVOL. This also allows the capital acquisition rumors of both sides to finally settle.

For Changsheng Xingye's stake in Baowo, Lu Zhengyao, chairman and CEO of Shenzhou Youche, said in an interview earlier: "Changsheng Xingye is a company of my classmate Wang Baiyin, and Shenzhou Youche supports Changsheng Xingye to win Baowo equity." Shenzhou Youche only wants to form a deep strategic cooperation relationship with Baowo as a platform. At this time point, Shenzhou Youche is not suitable for equity cooperation with Baowo. However, in the future, Shenzhou UCAR does not rule out the possibility of directly controlling Beijing Baowo."

In November last year, Foton Automobile officially listed and transferred 67% equity of Beijing Baowo on the Exchange. According to the data disclosed by Baowo at that time, as of August 31,2018, Beijing Baowo had total assets of 11.816 billion yuan, liabilities of 6.667 billion yuan and net assets of 5.149 billion yuan; operating income of 2.184 billion yuan, operating profit of-1.248 billion yuan, total profit of about-1.249 billion yuan and net profit of about-1.148 billion yuan.

Soon, in December of the same year, Shenzhou Youche was officially confirmed as the receiver of Baowo Automobile. After that, Shenzhou Youche announced the launch of the new retail platform of Shenzhou Baowo Automobile jointly with Baowo Automobile. Baowo will be responsible for product R & D, production and after-sales service. The new retail platform of Shenzhou Baowo Automobile will serve as an enabler to fully empower dealers in terms of brand, finance, inventory, flow, scenario, informatization, etc.

There are three main changes in this new retail platform: 1. Zero inventory of dealers, direct delivery from 35 inventory centers nationwide;2. Expansion of channels, thousands of stores, regional sinking, transformation from 4S store mode to flagship store, franchise store and sales point combination mode, even "zero franchise fee"; 3. In combination with the business of car rental and special car rental in China, consumers can 'enjoy first and then buy, return or exchange'. Specific services include 0 down payment, deep test drive, 90 days without reason to return the car, etc.

Lu Zhengyao, chairman and CEO of Shenzhou Youche, said that he would innovate the traditional sales model. If the original dealers are willing to join the construction of "thousands of stores in thousands of cities", they are welcome. If they are not willing, they will subsidize according to the conditions originally discussed with the dealers by Beiqi Foton.

In the middle and late February of this year, representatives of Baowo automobile dealers gathered at Beiqi Foton headquarters to pull banners to protect rights, demanding Beiqi Foton to give "compensation for withdrawal from the network", otherwise the whole country collectively stopped after-sales service.

At present, Baowo performance is still not optimistic. Data show that in January 2019, Beijing Baowo audited operating income of about 1.22 billion yuan, net profit loss of about 1.894 billion yuan. Foton Automobile suffered a loss of 3.2 billion yuan in 2018 due to Baowo. As for the reasons for the loss, Foton Automobile said: Baowo business was affected by the market, advertising promotion expenses increased year-on-year, sales volume declined; bus order signing time was later than expected; R & D investment increased year-on-year, and development expenditure turned to intangible assets amortization increased.

Shenzhou will take 67% equity of Baowo with 4.1 billion yuan, and before the official transfer, Shenzhou Baowo has been moving frequently, launching Shenzhou Baowo new retail platform intends to change Baowo's current declining state, but while promoting brand development, dealers 'feelings can not be ignored.

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