Cheng Yuan: Defending Wuling is the channel to defend the automobile power

In recent years, news about Wuling’s transfer of equity has been true and false, and rumors have continued. Recently, Wuling’s Chinese shareholders finally made it clear that they did not give up, and everyone’s heart finally settled down.

It is reasonable to say that the transfer of equity between shareholders of a joint stock company is entirely a matter between shareholders, without the need for others to make irresponsible remarks. However, SAIC-GM-Wuling is different from SAIC-GM-Wuling in that its shareholding structure is “alternative” and it is the only “Chinese-foreign” vehicle joint venture. The Chinese party has absolute control over the entire ownership of the vehicle. In other words, this is the only full-vehicle joint venture in which the Chinese have full right to speak, so we are all very concerned.

Over the past few years, SAIC-GM-Wuling has been successful. Not only was it the first single company in China to have an annual sales volume of more than one million units, but both its profitability and profitability exceeded that of Shanghai Volkswagen. SAIC-GM-Wuling’s shareholding was very impressive. envious. As one of the shareholders, GM hopes to increase its equity ratio in the joint venture company, but it is understandable, but the bottom line of the Chinese joint venture policy is that foreign ownership can not exceed 50%, does not mean that foreign ownership must reach 50% Although the current equity ratio of automotive joint ventures is almost equal.

In the past, we did not support Wuling’s transfer of equity to GM. It was only based on the economic interests of Chinese shareholders. Considering holding such blue-chip stocks of SAIC-GM-Wuling, it could play the role of “yeast” in driving economically underdeveloped regions such as Guangxi. The development of the local economy can also continue to gain benefits in distribution. Through further investigation and consideration of the SAIC-GM-Wuling development model, we believe that the problem is far more than this.

In recent years, people often said with sadness that China’s automotive “market-for-technology” has failed to achieve its goal and that China’s market has “changed” out. The world is running entirely on the brand of a multinational company. We do not expect the technology to be obtained. Change back. The reason lies in allowing foreign ownership of 50% of the equity in the joint venture. On the face of it, this seems to be an equal cooperation between the two sides. However, because the technology comes from the outside, the brand of the product is foreign, and the foreign party has complete intellectual property rights and thus has absolute right to speak. From the personnel arrangement in the joint venture, it can be seen that usually the key departments such as finance, technology, support, and sales are all under the control of foreign personnel. China is often the deputy of these departments who have the right to work, and their status in the enterprise. The role is very limited. In such joint ventures, foreign parties are more concerned with exploiting the market, strengthening their own brands and occupying more Chinese markets. The most unwillingness to do is to spread technology. The most important task for Chinese personnel in joint ventures is to do their utmost to promote foreign brands and sell as much as possible other brands' cars to all corners of China. For example, Shanghai Volkswagen introduced the Skoda brand. The joint venture company invested hundreds of millions of yuan in promotion of the brand in one year, and scrambled a third-rate brand into a "brand name." But how much benefit did China get from it? It can be said that the better the joint venture is operated, the stronger the foreign brand will be, the greater the influence in the Chinese market, and the farther away from the automobile power China will be.

Looking back at the joint venture model of SAIC-GM-Wuling, the shareholdings of the two Chinese shareholders together accounted for 66%, and it is absolutely controlled. In this enterprise, the management is led by the Chinese side, and China has full right to speak. The product brand also comes from China. Foreign parties provide support for technology, management experience and development system. Why can the "Wuling Light" and "Wuling Rongguang" models sell 900,000 vehicles a year? It is because of the use of common technology platforms and management experience that the general system has been used to transform this product. The general technical staff has also directly participated in the improvement and improvement of the product. This is an advantage that purely Chinese companies do not have, that is, SAIC-GM. Wuling is able to stand out from the pressure of all its peers. Of course, General Motors also got the Chinese market they wanted. This is really the market they used for technology. The brands created by such joint ventures, such as "Baojun", although they belong to the shareholders, are absolutely controlled by the Chinese side. Naturally, they are China's own brands.

It is also worth pointing out here that even though the GM’s share ratio in this joint venture is not as high as that of other multinational companies, their idea of ​​increasing the share ratio is currently unfulfilled, but GM has no obligation to fulfill shareholders' obligations. The slightest slackiness and discount, not to mention the termination of joint ventures, is better than any other multinational company in terms of technical output. This shows that China should and can fully adhere to and safeguard its own national interests on the road of joint ventures. The practice of some transnational corporations infringing on China’s interests is entirely falsified by Chinese personnel.

The thinking provided to us by SAIC-GM-Wuling is not a question of more points and less points, but it highlights the correct path for China to become a car power. The automobile industry led by this kind of enterprise is the well-deserved Chinese automobile industry. If China's land is running branded cars of multinational companies, even if the market size is 20 million, 30 million, or even 50 million, and there is no essential difference with 13.6 million now, at best, China is only the world’s largest car sales. Market, but not with the car power. The joint venture model of SAIC-GM-Wuling is the joint venture model that should be achieved when the original “market-for-technology” goal was achieved.

SAIC-GM-Wuling provided a successful joint venture model for the Chinese auto industry. We only have to adhere to such a joint venture path and make it possible to promote it. The dream of a Chinese auto powerhouse is likely to be a round. We propose to defend Wuling’s equity, that is, to defend this joint venture model, that is, to protect China’s access to automobile powers.