AutoBeta(AutoBeta.net)04/27 Report--

A new round of consolidation in China's automobile industry has begun, with Geely officially hosting Changfeng Cheetah Automobile Factory. At this stage, the survival of weak brands is difficult, a number of joint venture car companies have announced their withdrawal under the stock competition, and some marginal independent car enterprises will also face elimination, so the merger and reorganization of China's automobile industry is imperative.

On April 27, Geely holding Group formally signed a strategic cooperation agreement with the Hunan Provincial people's Government and the Changsha Municipal people's Government in Changsha, hosting the Changsha factory of Hunan Cheetah Automobile Co., Ltd., a subsidiary of Hunan State-owned Enterprise Changfeng Group Co., Ltd. After Geely officially takes charge of Changfeng Cheetah Automobile Factory, it will be engaged in the production and sales of new energy vehicles, introduce new energy vehicle products and technologies, and promote resource integration.

Since 2018, due to the deep adjustment of the domestic automobile industry, the slowdown of the pace of new product launch, the decline of brand product competitiveness and other factors, Cheetah Motor Company has encountered difficulties in production and operation, and sales have continued to decline. The sharp reduction in the size of the market has made it difficult for Cheetah to bear its huge industrial resources, so since last year, Cheetah has launched employee pay adjustments and pay cuts, and plans to break away from some of its assets.

In mid-2019, Changfeng Group decided to implement the "employee salary adjustment and burden reduction" program. The content of the document said that in view of the rapid changes in the automobile industry, the company's serious production and operating losses, and serious underoperation of the production base, the meeting ensured survival and tide over the difficulties by means of salary adjustment, burden reduction and salary reduction. The salary adjustment includes a 50% salary reduction for some senior executives in the headquarters, a 50% reduction in the salary of the staff of the research institute, and a 30% reduction of the salary of the staff in the production base.

At the end of 2019, it was reported that Cheetah officially carried out a self-rescue operation, including the closure and transfer of the base, self-rescue through the government to raise funds, the implementation of debt-to-equity swap, land resources change and other programs. According to an internal email circulated online, Cheetah plans to close its bases in Jingmen, Chuzhou and Changsha, leaving only the Yongzhou base; the factory in Changsha will be acquired by Geely, the Jingmen factory will be handed over to the government, and the Chuzhou factory will be sold.

Until the end of April 2020, Geely took over Cheetah Changsha factory official announcement. Cheetah got rid of the heavy "burden", while Geely realized the expansion of the new energy industry, which led to the merger and restructuring of China's automobile industry.

Changfeng Group can be traced back to 1950 and has a history of nearly 70 years. In September 2001, it was handed over by the army to the people's Government of Hunan Province. It is mainly engaged in the research and development, manufacture and sales of complete vehicles, and its headquarters is located in Changsha, Hunan Province. In 1995, the company cooperated with Japan's Mitsubishi Motors to introduce Mitsubishi Pajero automotive technology. After the development process, Changfeng created a "cheetah" brand, with an annual production scale of 500000 SUV and pick-up trucks, the main products are cheetah brand series SUV and pickups.

At present, Cheetah has six products, namely, CS10, CS9, CS9EV and Mattu, hard SUV Q6 and Cheetah CT7 pickup. Due to country 5 switching to country 6, the company's operating problems, some products have been stopped production.

Due to the intensification of market competition, the sales of Cheetah cars, an established independent car company, continue to decline, and the brand is marginalized. Cheetah sales fell from 86402 in 2018 to 33200 in 2019, down 61.6 per cent from a year earlier, according to the data. Rapid changes in the market, coupled with epidemic factors, cheetah car can not keep up with the pace, the operation will be more and more difficult.

SAIC, the largest automobile group in China, clearly pointed out in its annual financial report that "from the perspective of the industry pattern, the concentration of the market is increasing, and weak brands are facing elimination."

Industry insiders said, "Market elimination is fair, which is also conducive to the merger and restructuring of China's automobile industry." Car companies without brands, core technology and capital will collapse one after another. "

In recent years, China's automobile industry has changed greatly. When Suzuki was defeated, Changan Suzuki was completely taken over by Changan Automobile; Changan PSA was dissolved, Changan Automobile and PSA Group withdrew from the joint venture; Dongfeng Renault delisted and Dongfeng Automobile Group took over completely after Renault withdrew. In addition, Guangzhou Auto Fiat, BAIC Yinxiang, specific Speed Automobile, Huatai Automobile, Lifan Automobile, Quan Zhi Automobile, Haima Automobile and so on all have operational difficulties and their products are at a standstill.

"Renault's withdrawal from the Chinese (fuel passenger car) market reflects that China's automobile market has entered a phase of elimination of the fittest, warning other joint venture brands to make greater product localization investment and technological innovation," said Cui Dongshu, secretary-general of the Federation of passengers' Association. at the same time, we also want our own brands to strive to become bigger and stronger to promote the stronger development of the automobile industry. "

The key words such as industrial integration, merger and reorganization will be a hot topic in China's automobile industry in the next few years. The normal survival of the fittest in the market, the structural adjustment of the automobile market, and the road of high-quality development is the law of the industry. Stock competition and even shrinking competition has accelerated the reshuffle of the automobile industry.

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