SAIC-GM Asia Strategy Formation

Interpretation of the core strategy: SAIC Motor Corporation and US General Motors will establish GM Shanghai Automotive Hong Kong Investment Corporation at a ratio of 50:50, and use this as an investment and cooperation platform to capitalize on the successful management experience of the joint venture in China. Join forces to seize opportunities for emerging markets in Asia.

At 4:50 pm on December 4th, just two days after the announcement of the suspension of the shares of the Shanghai Automotive Company, Shanghai Automotive and General Motors jointly issued a new statement: they announced that they will set up a GM Shanghai Automotive Hong Kong investment in accordance with the 50:50 ratio. The company will use this as a platform for investment and cooperation, starting with the Indian market and jointly developing emerging markets in Asia.

At this point, SAIC Motor's major asset reorganization event that has caused intense attention in the industry has officially opened its mystery and the “SAIC-GM” Asian strategy has been formally formed.

On the evening of December 2nd, Shanghai Automotive announced that the company is planning a major asset restructuring. The company's shares were officially suspended from December 3rd.

The announcement of this statement means that SAIC and GM’s successful joint venture cooperation model in China began to export to the Asian market. SAIC and GM have officially entered the global auto market.

SAIC-GM model extended from China to Asia

In the latest statement jointly issued by SAIC and GM, the two stressed: Both sides will establish a GM Shanghai Automotive Hong Kong Investment Company at a ratio of 50:50, and use this as an investment and cooperation platform to capitalize on the success of joint ventures in China. The management experience, as well as the locally developed products with competitive advantages, will work together to seize opportunities in emerging markets in Asia.

According to report, SAIC and General Motors announced the establishment of a joint-venture Hong Kong investment company with a registered capital of 100 million U.S. dollars each with a total investment of 50 million U.S. dollars. SAIC will use the loan method to raise this fund. At present, there is no plan to raise funds in the securities market.

The first stop of the two sides "grabbing on emerging market opportunities in Asia" points to the potentially huge Indian market. The statement stated that: At present, both SAIC and GM have conducted research on the Indian market and are improving their development plans. The two companies plan to use GM’s brand, sales network, two OEMs and an engine plant in India to produce and sell locally produced and sold small and mini vehicle products developed by Shanghai GM, Pan Asia Automotive Technology Center and SAIC-GM-Wuling in India. .

According to the plan, the new India company after joint venture restructuring will start business in the first quarter of next year.

In fact, as early as December 2, Shanghai Auto announced the company's stock suspension announcement, the industry has already guessed that SAIC's suspension of this company’s stock is closely related to SAIC and General Motors’s presence in the Indian market.

On November 23, SAIC President Chen Hong revealed in an interview: “This year, India’s sales volume is 2 million vehicles, which is roughly equivalent to China's 2000 level, but its growth is very fast, and it will reach 4 million in 2015. SAIC Motor Looking for opportunities to enter the Indian market, SAIC GM's products such as those produced by Pan Asia are very suitable for the Indian market, and specific matters are still in consultation with GM."

At that time, the industry conjectured that SAIC Motor would achieve a breakthrough in the Indian market through a new company jointly established with General Motors. In return, SAIC will probably license General Motors to acquire a 15.9% stake in its controlling SAIC-GM-Wuling.

SAIC-GM-Wuling Automotive Co., Ltd., officially established on November 18, 2002, was jointly established by Shanghai Automotive Group Co., Ltd., General Motors (China) Co., Ltd., and Liuzhou Wuling Automobile Co., Ltd., with a ratio of 50.1%. General 34%, Liuzhou Wuling 15.9%.

GM's increase in holdings of SAIC-GM-Wuling shares is significant for GM, SAIC, and even the local government of Liuzhou. As for the local government, SAIC-GM-Wuling's auto production and sales will exceed 1 million this year as the largest single-car enterprise in China. It is also the first single-car enterprise in China to have an annual output of more than 1 million automobiles. GM’s increase in shareholdings means SAIC-GM-Wuling’s future development will go even further. It is not a breakthrough in the field of microcars to the car industry. There is no possibility; for GM, it is one stone and two birds. It can share the results of the rapid development of SAIC-GM-Wuling to a greater degree. The latter's production of Wuling Micro-cars is also a hope for GM to win the Indian market. For SAIC Motor, The replacement of the equity of SAIC-GM-Wuling will enable the Group to re-enter the sea under the leadership of the “Ocean Wizard.” The destination of this trip is still the mouth-watering Indian automotive market.

GM US$84.5 Million Transfers 1% Shanghai GM Equity to SAIC Motor

In addition to joining GM in the Indian market, a key message from the statement issued on December 4 is: Shanghai Automotive and General Motors have reached an agreement to transfer the 1% stake in Shanghai General Motors held by GM to Shanghai Automotive. Holding SAIC Hong Kong Investment Company. This move will help SAIC Motors, a listed company, to merge its sales revenue with Shanghai General Motors, which will further highlight the company's main business characteristics and help investors fully analyze the company's business. According to report, Shanghai GM's 1% share transfer price is 84.5 million US dollars.

Starting from next year, listed companies will implement the new "Enterprise Accounting Standards" provision, the performance of uncontrolled companies can not be incorporated into the financial statements. The detailed investigation of the two profitable owners under SAIC Motor currently knows: In Shanghai Volkswagen, the shareholding ratio between SAIC and VW is 50:50. Shanghai Volkswagen’s product sales are sold by SAIC Motor’s SAIC-Volkswagen Sales Co., Ltd. Sales and profits have all been incorporated into Shanghai Automotive. In Shanghai GM, though SAIC and GM’s shareholding ratio is also 50:50, sales are handled by Shanghai General Motors. This means that Shanghai GM Shanghai will start from next year. Neither the sales revenue nor the profits of the car's profit winners can be incorporated into SAIC's financial statements.

GM’s “grand” 1% transfer of Shanghai GM’s equity will not only help Shanghai Auto’s sales of Shanghai GM, a listed company, but also deepen its alliance with SAIC-GM. A huge boost.

SAIC-GM will be the “golden partner” of the world-class auto alliance?

Even a year ago, we put the “SAIC-GM” as a world-class strategic alliance. It will be abrupt, but now, with the development of the market, we are increasingly seeing the possibility of this alliance. SAIC is With their own low-key and steady atmosphere and pragmatic approach, they show us the elegance of a world-class auto giant. If someone now asks: After 10 years, who is China's most likely car company to become a world-class auto giant? I believe most The answer is: SAIC Group.

In the wave of Chinese automobile outsourcing at the bottom caused by this round of financial crisis, SAIC, the most powerful and most experienced in international automotive operations, has been deterred for a long time and has caused controversy: SAIC Motor was either acquired by South Korea’s Ssangyong or “scared” or was The current situation in the domestic and international auto markets is “stuck” but now if SAIC Motors’s general success in entering the Indian auto market is successful, SAIC will still be among the “buy” and “buzzed” chickens in the region caused by the financial turmoil. The biggest winner.

India, which is about to leap into the world’s most populous country, is undoubtedly the center stage of another global auto market following the Chinese auto market. SAIC’s way of going out is neither “little on the cheap” nor is it a dilemma. There is no purpose for the free exercise, but rather to find an experienced "foreign guide" to lead the way, everyone plays together.

Even if it is once in sight, such as General Motors, how is it? Within 10 years, SAIC Group may not be able to look at the same amount. In the past, we had been far away and piously admired the Renault-Nissan Alliance and the Dai-Ke Group. We also had the YY Renault-Nissan-Dongfeng Golden Triangle, but now, we can justify it. We look forward to the SAIC-GM model stepping out of China and onto the stage of the world's automobiles.

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