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[YesAuto Deep Comment] State-owned capital is the foundation of my country's social and economic development, and the automobile industry is a strategic industry. When the two are combined, facing mixed reforms, where will the automobile industry go? Under the complicated information flow, what is the fundamental motivation for mixed reform? What are the basic principles and methods of mixed reform? Which companies have already heard the news? How will the mixed reform deeply change the pattern of the auto industry? For many questions, please see the in-depth analysis of this issue.

●What is “Deep Commentary Questions”?

Deep Commentary Questions ” is the first column created by Autohome for industry-end users. It is written by senior practitioners in the auto industry to exclusively analyze/demystify major industry events. In addition to lively appearances, we want to present you with exploration and thinking about the nature, cause and effect, and future possibilities of things.

The industry commentators in this issue -the intelligent electric automobile expert group, consists of a group of automobile professionals with master's and doctoral degrees, and more than ten years of work experience in the automobile industry. They are distributed in universities, automobile industry associations, parts companies, OEMs, consulting companies, etc. The formation of senior people in the industrial chain. As the auto industry is transforming and upgrading to intelligent and electrified, we will share the new technology of the auto industry with more people.

The author of this article: Hu Yufeng, has successively engaged in automobile electronic control development, vehicle testing, energy saving and new energy automobile industry consulting, etc., has participated in the national 863 major project, the Ministry of Industry and Information Technology “Energy Saving and New Energy Vehicle Technology Roadmap”, and the Chinese Academy of Engineering More than 10 major research/actions such as “Strategy”. He is good at review analysis and policy analysis of the automobile industry.

Highlights of this issue

★ The central government sets the tone. After the seven major fields of electric power, aviation, civil aviation, and military industry, automobiles will gradually start the road of mixed reform.
★ In addition to the macro-control purposes such as value preservation and appreciation, behind the mixed reform, there are also specific factors for strengthening and going overseas in the automotive sector.
★ The mixed reform of automobiles must also adhere to the keynote of “mainly public ownership”, but the form will be diversified, and certain non-key areas can realize the delivery of controlling rights.
★ For consumers, after the mixed reform, they are expected to enjoy high-quality, customized products at low prices.

1. The mixed reform curtain opens

Mixed ownership reform, the full name of mixed ownership reform, is to introduce private capital to promote the development of productive forces. In November 2013, at the Third Plenary Session of the Eighteenth Central Committee of the Communist Party of China, in the “Decision of the Central Committee of the Communist Party of China on Several Major Issues of Comprehensively Deepening Reform”, the proposition of “actively developing a mixed ownership economy” was put forward. The relevant content pointed out: “State-owned capital, The cross-shareholding and mutually integrated mixed ownership economy, such as collective capital and non-public capital, is an important form of realization of the basic economic system.”

Earlier, in the “Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Reform and Development of State-Owned Enterprises” approved by the Fourth Plenary Session of the 15th Central Committee of the Communist Party of China, the expression of the economic system was still “promoting the development and growth of the state-owned economy and enabling the state-owned economy Better play a leading role in the national economy.”

In other words, the Third Plenary Session of the Eighteenth Central Committee clarified the principle of mixed ownership reform, strengthened the importance of mixed ownership reform on the premise of adhering to public ownership, and dispelled the ideological concerns of all walks of life, thus officially opening up mixed ownership reform. Change the curtain. To put it vividly, the positioning of the Third Plenary Session of the Eighteenth Central Committee for the mixed reform is comparable to the conclusion of the “surname of society and capital” in the Southern Tour speech that year.

In 2015, the state successively issued the “Guiding Opinions on Deepening the Reform of State-owned Enterprises” and related special supporting documents, marking the completion of the “1+N” document system for the reform of state-owned enterprises and the resolution of institutional issues.

After the principle and institutional issues have been resolved, the National Development and Reform Commission has successively initiated three batches of mixed reforms for a total of 40 central enterprises and local state-owned enterprises (including subsidiaries), including China Unicom, Eastern Airlines, China Shipbuilding Corporation, and China Southern Power Grid. The state-owned giants have all begun to implement the mixed reform plan.

But after a little observation, we can find that the current mixed reform areas are highly in line with the requirements of the Central Economic Work Association: that is, the seven fields of electricity, oil, natural gas, railways, civil aviation, telecommunications, and military industry. However, the automotive sector has not been on the list.

Two, the mixed change of cars is about to come

Not on the list does not mean that there will be no mixed reforms in the automotive sector. In fact, the automobile field has quietly begun to explore the path of mixed reform.

State-owned car companies open hybrid exploration path
time State-owned car company event
November 2013 BAIC Group Daimler Investment acquired a 12% stake in BAIC, and at the same time Beijing Benz reorganized its equity, BAIC’s stake increased to 51%, and Daimler’s stake in Beijing Mercedes-Benz Sales & Service Co., Ltd. increased to 51%. .
July 2014 JAC Jianghuai Automobile listed the Jianghuai Automobile Group as a whole through mergers and acquisitions. Construction Investment Investment and Shiqin invested 10.83% and 2% of the shares respectively, and Jianghuai Automobile Group's shareholding ratio decreased from 35.43% to 30.47%.
August 2016 Brilliance Group The Liaoning Provincial Government listed its shares in Brilliance Group to attract social capital.
January 2017 SAIC The core employee stock ownership plan was implemented through non-public issuance of stocks. In 2016 alone, 2207 employees subscribed for 48 million shares, accounting for 0.41% of the total share capital.
September 2017 Dongfeng Motor Dongfeng Motor sold 85% of its equity in Dongfeng Industrial, most of the equity is held by social investment, and employees also hold part of the equity.
November 2017 FAW Group With the mixed reform of FAW Xiali, FAW's shareholding ratio in FAW Xiali will be reduced from 47.73% to 23%.
November 2017
GAC Group The 15 billion yuan fixed increase came to an end, and a number of investment institutions were introduced. Guangzhou Huiyin Tianyue invested 6 billion yuan to subscribe for 301 million shares, becoming the second largest shareholder of GAC Group, with a shareholding ratio of 5.95%.
March 2018 Changan Automobile China Changan Automobile Group Co., Ltd., the controlling shareholder of Changan Automobile, transferred 1.035 billion shares (accounting for 21.56% of the total share capital) of the listed company to China North Industries Group Co., Ltd. for free.
March 2018 Beijing Auto Daimler takes a stake in BAIC New Energy, holding 3.93% of the shares.
May 2018 Chery Automobile Through the equity transfer resolution, Chery intends to introduce foreign investors with a cash injection of no less than 20 billion yuan, and give up 51% of the equity.
June 2018 FAW Group The FAW Group, a shareholder of Fawer, plans to transfer approximately 316 million A shares (accounting for 24.41% of its total share capital) of the company's A shares to FAW's equity investment for free.
Tabulation: Industry Commentator of Auto House

It can be seen that the nine major state-owned auto companies have tried different forms of mixed reforms, but in any case, this is a single-handed fight at the enterprise level. Until July 4, 2018, the National Development and Reform Commission's official website issued the “Automobile Industry Investment Management Regulations (Draft for Comment)”, which clearly stated: “Support state-owned auto companies and other types of enterprises to carry out mixed ownership reforms.” So far, this is the first time that the automotive sector has a programmatic policy as a macro guidance, and then it has been comprehensively promoted.

As for why the “public statement” in the automotive field came later than the seven major areas such as electricity, it is actually because the first seven major areas are areas with serious monopoly colors. Although there are partial monopolies in the automotive field, they are not prominent. The knife of reform is first to break monopoly and stimulate vitality. So, it was a little bit late.

3. Why mixed reform

As for why state-owned auto companies want to reform, we should look at it from two levels.

The first level is the macro level. Mixed reform is a general trend. The purpose is to maintain and increase the value of state-owned capital by introducing fresh elements to enhance the vitality of state-owned enterprises and break the constraints of the system. This is clear to everyone, so I won’t repeat it here.

The second is the micro level, which is the automotive field itself. In the view of Zhidian Automobile, the purpose of state-owned car companies' mixed reform is to help the strong and save the weak, that is, to integrate excellent resources to build a powerful fleet, and at the same time to rescue car companies that have difficulties in business, and ultimately achieve the “going to sea” of the national team.

Specifically, the current operating conditions of state-owned auto companies are uneven. Take the nine major auto companies as an example. SAIC and GAC are joint ventures with their own brands and their business conditions are improving; but the three giants of Dongfeng, BAIC, and FAW show signs of over-reliance on joint ventures; Brilliance is still able to survive by relying on BMW. Day, but Chery and Jianghuai are getting worse.

Operation of major state-owned automobile enterprises in 2017
State-owned car company Revenue (100 million yuan) Year-on-year revenue

Net profit

(100 million yuan)

Net profit year-on-year Sales (ten thousand)

Year-on-year sales

SAIC 8,706.39
15.1% 344.1 7.51% 693 6.8%
Dongfeng Motor 183.01 14.25% 2.01 -8.29% 412 -3.66%
FAW Group 4650 7.59% / / 335 7.86%
Changan Automobile 800.12 1.87% 57.16 -39.5% 287.24 -6.23%
BAIC Group 1406.6 15.9% 170.4 11.6% 146.6 -twenty four%
GAC Group 711.4 44% 107.9 71.5% 200.1 21.3%
Chery Automobile 294.7 -10.59% / / 68 -3.51%
JAC 491.46 -6.37% 4.32 -62.83% 22.3 -39.2%
Brilliance Group 1,263.78 10.8% 74.51 19.12% 74.57 -3.7%
Tabulation: Industry Commentator of Auto House

In fact, apart from the performance of joint ventures, the performance of the Chinese brands of state-owned enterprises can be regarded as continuing to strengthen. Even Changan Automobile is facing bottlenecks in the system.

Sales of Chinese brands in some state-owned auto companies
Rank Group/Company Sales (ten thousand)

Chinese brand sales

(Ten thousand vehicles)

1 Changan Automobile 287.2 116.4 40.5%
2 Dongfeng Group 352.7 84.6 twenty four%
3 SAIC 618.8 52.2 8.4%
4 GAC Group 165.9 51.2 30.9%
5 BAIC Group 146.6 23.6 16.1%
6 FAW Group 304.3 11.5 3.8%
Tabulation: Industry Commentator of Auto House

The most intuitive manifestation is that the market value and revenue of state-owned auto companies generally fall short of those of private auto companies. Although market value cannot be linked to influence, it can partly reflect the market's prediction of the company's future profitability. From this point of view, private enterprises are doing better than state-owned enterprises.

The market value of some auto companies
Group/Company Market value (as of 2018.7.5) 2017 revenue ratio
SAIC 389.410 billion yuan 870.639 billion yuan 44.7%
GAC Group 105.712 billion yuan 71.14 billion yuan 148.6%
Dongfeng Motor 69.618 billion yuan 572.613 billion yuan 12.2%
Changan Automobile 42.936 billion yuan 80.12 billion yuan 53.7%
Brilliance Group 68.515 billion (Brilliance China) RMB 185.1 billion 37.0%
JAC 11.72 billion yuan 49.146 billion yuan 23.8%
Geely Automobile (private enterprise) 170.394 billion yuan 92.76 billion yuan 183.7%
BYD (private enterprise) 124.349 billion yuan 54.5 billion yuan 228.2%
Great Wall Motor (private enterprise) 86.435 billion yuan 100.492 billion yuan 86.0%
Tabulation: Industry Commentator of Auto House

The market value is still on the one hand. At a deeper level, private enterprises rely on flexibility and have stronger operating capabilities than state-owned enterprises. This is the essential reason for the market value. To give an improper example, when Brilliance was still in charge of Yangrong, it relied on its flexibility to explore the three major paths of “technology introduction Jinbei, foreign investment in cooperation with BMW/GM, and independent development of China.” Later, the drawbacks of the system gradually enlarged, and Brilliance, the former Chinese brand boss, has now gone to a marginalized position.

Looking further, China’s auto production and sales are gradually reaching their peaks, the market has entered the era of stocks from the incremental era, and the need to tap overseas markets is to guide state-owned enterprises and private enterprises to achieve “capital” and “management” cooperation. The flexibility of private enterprises is introduced to state-owned enterprises, and other methods such as employee shareholding are used to increase enthusiasm, so as to realize the integration of scale, flexibility, and enthusiasm of state-owned enterprises, and finally to become stronger and go overseas. This is the mixed state of state-owned auto companies. The real reason for the change.

4. How to mix reforms?

Before talking about the mixed reform, we must first unify the basic understanding of the mixed reform, that is: “State-owned capital investment projects allow non-state capital to participate in shares, and the mixed ownership economy is allowed to implement enterprise employee shareholding, forming a community of interests of capital owners and workers.” Rather than simply homogenizing cross-shareholdings between state-owned enterprises and state-owned enterprises.

Next, let's predict how the mixed reform will proceed:

1. Adhere to the basic principle of taking public ownership as the main body and the common development of multiple ownership economies. What does that mean? That is to say, the mixed reform of state-owned auto companies will not completely give up their controlling position. The state-owned economy is still dominated by exhibitions. However, some companies, such as Chery and Jianghuai, are relatively small companies that allow “multi-ownership economies to develop together.” “Even private capital holdings.

2. Transition from the pursuit of asset management to the pursuit of capital management, and gradually realize the separation of government and enterprise. For most companies, the decision-makers may have realized that under the condition that the pace of the market is accelerating day by day, there is no need to use a stagnant institutional framework to restrict business operations, so they will abandon the behavior of managing assets and switch to managing capital. The difference between the two is that the latter does not need to deal with too much business, and mainly focuses on supervision, but it can also benefit from it. This model essentially draws on the successful experience of Singapore’s state-owned enterprise Temasek.

3. Stimulate internal vitality, innovate and optimize systems and mechanisms. In the actual implementation of mixed reform, it is expected that the following five specific methods will be used for targeted development. The first is the listing of overall or core assets; the second is the introduction of strategic investors; the third is the introduction of funds; the fourth is restructuring or cross-shareholding; the fifth is employee shareholding; the fifth is to complement the first four. These four methods are all aimed at stimulating the internal vitality of the enterprise, breaking the constraints of the system, achieving rapid development, and ultimately “maintaining and increasing value.”

But generally speaking, a truly effective mixed reform should also be a joint strengthening after the introduction of capital, that is, state-owned capital is responsible for supervision, foreign capital is responsible for operation, and both parties jointly carry out capital operations (including mergers and acquisitions), and implement employee incentives. Realize the multiplier effect of the enterprise.

5. How does the mixed reform affect the pattern of the auto industry

Finally, let's talk about how the state-owned auto companies after the mixed reform will change the industrial structure.

On the overall level, the strong combination of the national team will accelerate the emergence of the Matthew effect . During the implementation period of the strategy of “strengthening and going global” after the expansion, the mixed reforms deliberately guided by the state will accelerate the formation of strong alliances. After that, small companies will be gradually annexed or squeezed out of the market by these joint teams, and the Matthew effect will accelerate. .

At the level of competition, the intensity of industry competition will increase significantly. After the market is gradually reshuffled, it is expected that about 10 big players will form a card game mode. Since the remaining players are good players, the competition will inevitably increase in the objective environment of gradual decline in the product price system and shortened product cycles. Under these conditions, the ability to respond quickly is extremely critical and even becomes a variable in the decision-making process.

At the product level, the “customization” of big data based on the C2B model has been accelerated. The flexibility of the mixed reform of state-owned enterprises will enable them to promote the “customization” of big data more quickly. The so-called “customization” of big data refers to the transformation of the product supply model based on the collection of customer needs and feedback to the adjustment of the production plan. This customization is not a complete customization in an absolute sense, but a choice within a range of options” custom made”. In addition, the mixed reform did not determine the transformation, but only accelerated the transformation.

At the consumer level, it is not far away to enjoy high-quality, customized products at low prices. There is no doubt that the size of state-owned car companies is still an absolute giant and a leader on the supply side. After intensifying competition on the supply side and accelerating “customization”, consumers can purchase automotive products at lower prices and in a way that is more tailored to their own needs.

Having said so much, the mixed reform of state-owned enterprises is actually just one sentence: state-owned capital is decentralized, social capital is in power, and the two sides join forces to better develop automotive products for consumers. The only thing to worry about is those roles with corpses and mediocre capabilities. Because they are not far from being eliminated, it's that simple.