Some domestic auto companies are peeping into the seductive market of special vehicles. It has recently been heard that SAIC Iveco Hongyan is also preparing to explore the special-purpose vehicle market and build a factory exclusively for enclosures. However, at the 2011 China Special Purpose Vehicle Industry Development International Forum held in May 2011, there was news that because the country raised the special vehicle threshold, newcomers to the entry field were no longer approved.
It is reported that at present, only 1,000 companies in the country have production qualifications. Automobile companies that want to enter the field of special vehicles can only rely on acquisitions to reorganize existing resources.
As the price of a special vehicle is as low as 100,000 yuan, and as much as tens of millions of yuan, there is a large profit margin, and the state requires that the registered capital of special-purpose vehicle companies only need 20 million yuan, and the starting cost of passenger vehicles is 2 billion yuan. There is a world of difference, so the special car industry has become a profit point for the automotive industry, and many private capitals are quite embarrassing.
Mergers and acquisitions will become a trend
One-step management is impossible to achieve in the short term. Starting from 2009, the approval of production licenses for special-purpose vehicles becomes very strict, and the qualifications of special-purpose vehicles that have been approved will be identified by two-dimensional bar codes.
It is reported that in China, only private car companies in the Xinjiang region still have the opportunity to pass the approval. This is mainly due to policy support. At present, there are indeed many stalled special-purpose vehicle companies that do not have production qualifications. However, at the national level, it is certainly more stringent in terms of supervision.
In addition to buying accounts to enter the field, mergers and acquisitions are now a model. For example, the CIMC special vehicle factory has also expanded its scale and market share through mergers and acquisitions in recent years. In addition to the needs of business development, it is the development trend of the industry. At present, there are too many special-purpose vehicle companies in the country, and there are about 2,000 qualified and unqualified companies. Therefore, according to the law of competition in the industry, it will eventually move toward mergers and acquisitions and reshuffle.
M&A is actually an optimization of resources, which is beneficial to the overall development of the industry. One can supplement their own product lineage, and secondly, they can expand their territories. In addition to the acquisition of production qualifications, product optimization, in order to enhance brand influence, M&A is also a major aspect.
Is it a cake or a bag?
At present, some host plants have entered the field of special vehicles and are the development needs of the enterprises themselves. In order to seek more profit growth points and to strengthen product lines, the acquisition of special-purpose vehicle companies has become a trend.
The annual March-April period is the bottleneck month for special vehicle modification. This can be explained by the unbalanced demand and the shortage of supply in the market. Every year from March to May is a traditional peak season for the heavy truck industry. Production capacity cannot keep up with market sales, and logistics and refitting businesses may have problems. For example, an engine that a company supports previously only cooperated with Weichai. However, during the months when Weichai was heavily sold, it was also constrained by the production capacity to cause supply problems. At this time, heavy truck companies would consider the second engine manufacturer. This is basically similar to the problem of bottlenecks in refitting, which is to start looking for more cooperation resources. This is the root cause of the OEM's flocking into the field of special vehicles.
However, some people in the industry expressed some concerns about this phenomenon. Acquisitions require capital investment, and in the conversion industry, they can only maintain a 3%-5% profit during the peak season, and are basically at a loss during the off-season. As the current market conditions are too confusing, small special-purpose vehicle companies have disrupted the pattern and triggered a price war, making it difficult for the market environment to improve. In fact, this model is gradually destroying the automobile conversion industry.
Therefore, first, the profits obtained by the main engine plant are low, and the acquisition cost is very large; second, it must be responsible after the acquisition. The peak season of the special vehicle is about 2-3 months every year. After that, it is basically the traditional low season, that is, one year. Most of the time, the company was in a loss-making state. Third, after the acquisition, the special-purpose vehicle company may be far from the market, and its product adaptability has declined. Although some OEMs have actively entered the special vehicle sector, some OEMs feel that this is a burden.
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