GM China Confirms Increase in Holding 10% of SAIC-GM-Wuling

Recently, GM has finally publicly confirmed that it will increase the holding of 10% of the shares of SAIC-GM-Wuling (hereinafter referred to as SGMW), although in the view of GM, this increase should be completed at least three years in advance.

On January 26, General Motors and SGMW related staff successively told the China Times that Wuling Group has transferred 10% of SGMW shares to GM.

After the equity transfer, 50.1% of the shares of the three largest shareholders of the three SGMW shareholders, SAIC, remained unchanged. The proportion of the second largest shareholder, Fang GM, increased from 34% to 44%. Wuling accounted for Drop to 5.9%.

General Motors staff said that the equity delivery was completed at the end of last year. As a condition, General Motors will pay US$51 million in cash and provide technical services for 2013. In addition, GM will also help SGMW expand overseas emerging markets. After this share transfer, it has also been GM's long-cherished wish. Since 2007, GM has been seeking ways to increase its holding of SGMW but has been unsuccessful.

General confirmation

It is a long-standing rumors that GM is anxious to increase its holdings of SGMW. In the four-year negotiations, numerous domestic media have conducted special reports on this issue. However, even in the first half of last year, when GM met with the media, in addition to expressing his strong desire to increase his shareholding, he had never disclosed the progress of the matter.

Similarly, as a “Chinese-foreign” joint venture company, the unified caliber of SGMW-related people has always been “for the shareholding increase”, “We are only the operator. We are not aware of the equity issue and it is not convenient to evaluate it”. After this GM official confirmation, the relevant person of SGMW has only acquiesced to this matter.

In 2001, through the free transfer of state-owned assets, SAIC acquired a 75.9% stake in Liuzhou Wuling. SAIC Motors revitalized the original Liuzhou Wuling Automotive Assets, and Liuzhou Wuling changed to SAIC Wuling. Subsequently, SAIC Group deepened its cooperation with General Motors, and General Motors subscribed for shares that SAIC-Wuling issued to it. After reorganization, SAIC-Wuling changed its name to SGMW.

In the following eight years, SGMW demonstrated its growth in blow-out style. Its market share was 42% from 18%, which also helped SGMW regain its domestic micro-vehicle faucet for the fourth consecutive year. In the recent two years, its sales volume was Breaking through the million mark, sales volume reached 1.23 million vehicles last year. At the same time as the sales volume is scaled, its insistence on the "high-value, low-cost" concept of building a car also ensures its good profitability.

This has enabled GM to seek to increase its shareholding in SGMW since 2007. After SAIC is reluctant to give up its position as the largest shareholder, GM will target its holdings in the Wuling Group.

In the eyes of the government of Guangxi Autonomous Region, although SGMW has always been the leading domestic micro-vehicle industry, the future market growth of micro-vehicles is not as fast as that of passenger vehicles, while Guangxi has never launched a passenger vehicle project, and GM’s intervention will subvert this. One situation. As a result, the Wuling Group, as a key support enterprise for the “industrial Xinggui”, has already transferred 10% of the SGMW equity to the industry.

In particular, before and after the release of the Baojun brand last year, some of the technologies in the Baojun project were derived from the general aspect. Therefore, it is believed that the launch of the Baojun project lasting for three years means that General Motors has increased its shareholding in SGMW.

However, both General Motors and SGMW denied this. Until a few days ago, people from the general public said they had completed the delivery of shares and said that "GM has fulfilled its promise of "based on China, joining hands with China, and pursuing China"."

The commercial value of SGMW

Obviously, "commitment" is an official argument for the profitability of the market. The fundamental purpose of the change in shareholding is the commercial value of SGMW.

A few days ago, Liang Xiaodong, SGMW public relations department, told this newspaper that this year, SGMW's sales target is 1.3 million, of which commercial vehicle projects are planned to sell 1.2 million, and passenger vehicle projects are planned to sell 100,000.

Last year, SGMW sales reached 1,234,508 units, an increase of 16% year-on-year, including 1,156,708 commercial vehicle sales and 77,800 passenger car sales. Due to the limited production capacity, sales growth of 5 percentage points this year, its goal is to establish "have" in the industry growth. However, the joint venture company is planning to achieve a sales plan of more than 2 million units and sales revenue of 100 billion yuan in 2015. To this end, the SGMW SAIC-GM-Wuling car base project has been launched, with an investment of about 8 billion yuan in the first phase. By 2012, it will have an annual production capacity of 400,000 cars, produce series cars and variant cars, and plan to build engine projects. project.

For GM, even if it were to open the passenger car brand Baojun, which is about to be officially listed and sold, the position of SGMW in its global position is also very important. In GM’s recently announced sales list of the top nine global best-selling brands in 2010, sales of Wuling (commercial vehicles) ranked third (the sales of SGMW passenger car brand Le Chi were included in the Chevrolet brand). It should be noted that Wuling is only In the second place, Opel lost 50,000 vehicles. In contrast, Opel's global sales fell by 2.4% last year, while Wuling (commercial vehicle projects) increased by 14.8%. If SGMW is not limited capacity, it is expected to be the seat of the second-largest global best-selling brand. In the middle of this year, with the official listing of Baojun, it will further enrich the SGMW product line and increase market sales.

After deepening cooperation with GM, SGMW will further leverage the power of shareholders to vigorously expand overseas emerging markets such as India. Liang Xiaodong said that entering the Indian market is not an export in the traditional sense, but mainly based on product output, management team output, and business model output. The products that have been finalized for import into India are Wuling Hongguang, Wuling Hongtu and New Sail.

This "export" will enable SGMW to receive a technology transfer fee of RMB 1.6 billion in the next five years. At present, India is still "unknown" on the GM's global sales map, but GM believes that India will show a blowout in the near future.

In 2010, the top ten countries in the global sales ranking were China, the United States, Brazil, the United Kingdom, Germany, Canada, Italy, Russia, Mexico, and Uzbekistan. Among them, GM experienced sales decline in Germany, Canada, and Italy. GM urgently needs to establish its position in future emerging markets such as India, and SGMW's "high-value, low-cost" vehicle builder is clearly more in line with the local concept of car purchase.