Shanghai Automotive decided to sell the heavy-duty truck business of Shanghai Huizhong Automobile Manufacturing Co., Ltd. (hereinafter referred to as Shanghai Huizhong). At present, the company is in contact with Shandong Heavy Industry Group Co., Ltd. (hereinafter referred to as Shandong Heavy Industry) and intends to sell the heavy-duty vehicle manufacturing business of Shanghai Huizhong to Shandong Heavy Industry.
Shandong Heavy Industry is currently conducting an asset assessment of Shanghai Huizhong’s heavy-duty truck production line and suppliers. Currently, approximately 90% of the preliminary work of the acquisition project has been completed. The acquisition includes all the contents of Shanghai Huizhong's heavy-duty vehicle production lines and drawings. After the completion of the acquisition, Shandong Heavy Industry will continue to produce Huizhong’s replacement products during the transition period.
SAIC relevant person in charge told reporters that after Shanghai Huizhong sells its heavy-duty truck business, it will focus on improving its main business and improve its core components' supporting capabilities.
According to available data, Huizhong mainly has three business segments: light buses, heavy trucks, and chassis systems for cars. It is the backbone supplier of the chassis systems of Shanghai Volkswagen and Shanghai GM.
Although the heavy-duty truck business will be sold, SAIC told reporters that Shanghai Huizhong sold 600 heavy-duty trucks last year, and its sale will not affect SAIC. SAIC will focus on SAIC Iveco Hongyan Commercial Vehicle Co., Ltd. (formerly Development of Chongqing Hongyan Automobile Co., Ltd.). Statistics show that in the first half of this year, sales of SAIC-Iveco Hongyan reached 19,600 units, which is a year-on-year increase of 50%. This year's sales target will reach 30,000 units. In the first half of the year, Dongfeng ranked first in sales for 68,600 units, and China Heavy Duty Truck produced 58,900 vehicles, followed by FAW and Shaanxi Automobile. SAIC Iveco Hongyan ranked fifth. It is understood that SAIC also has Nanjing Iveco and Yuejin in the commercial vehicle sector. Currently, the development of these two businesses is also quite good.
The competition of domestic heavy-duty vehicles is mainly concentrated in low-end products, while high-end products are basically monopolized by foreign brands such as Volvo. Compared with other domestic companies, Huizhong, located in Shanghai, does not have the cost advantage of doing heavy vehicles.
For Shandong Heavy Industry, there are obvious cost advantages in the local area. Heavy-duty truck sales of the second heavy-duty truck are in Jinan. In addition, Shandong Heavy Industry’s Weichai Holdings’ engine is the leading brand of heavy-duty engine. Shandong Heavy Industry can use Huizhong’s production line to quickly enter the heavy-duty vehicle market and expand Shandong’s heavy-duty vehicle industry.
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