[Abstract] If Geely wants to achieve the "20200" strategy as scheduled, then it means that in the four years from 2017 to 2020, Geely's annual growth rate needs to reach nearly 30%.
On May 24, 2017, Putrajaya, Malaysia, Zhejiang Geely Holding Group and Malaysia DRB-HICOM Group (Diversity Heavy Industry Group) signed a binding key terms agreement. CFP for the picture
Time Weekly reporter Liu Yang from Beijing
The automobile acquisition industry made a "returning carbine" - on the afternoon of May 24, there was a sudden news. Zhejiang Geely Holding Group and Malaysia DRB-HICOM Group (Diversity Heavy Industry Group) signed a binding key terms agreement: Geely Group will acquire DRB The 49.9% stake in its subsidiary, Geely, also included the original Lotus of the Proton Holdings, which was acquired by the luxury sports car brand Lotus. The two sides will sign the final agreement by mid-July this year.
As early as the second half of last year, news about the acquisition of Proton and Luster by Geely Group began to spread, and initially more than 20 companies worldwide received bids, including Renault, Volkswagen, Skoda and Suzuki, after Malaysia. After the government screened, only Geely, PSA and Renault were left. Compared with Geely, PSA and Renault are both veteran companies in the auto industry. They are strong and Geely wants to win in the competition. It is very difficult. Therefore, after the Spring Festival this year, Geely will abandon the acquisition. However, the facts are always unexpected, and Geely became the ultimate winner when the acquisition was over.
This is the largest overseas acquisition of Geely after the acquisition of Volvo Cars from Ford Motor Company for $1.5 billion in 2010. It is said that the total expenditure is at least RMB 1.2 billion.
After putting Bao Teng and Lotus into the bag, Li Shufu’s Geely Automobile “Kingdom†has been further expanded. After the integration of Volvo, the richest man in the current automotive industry seems to have another calculation for Geely's future.
Acquisition of Proton does not affect Volvo
Proton is Malaysia's “national†car brand. Founded in 1983, it was once dominant in the Malaysian automotive market. In recent years, the impact of cheap imported cars, the market share has been falling all the way, and finally in deep trouble, have to look around for international partners, and finally shake hands to sign the agreement is China Geely.
The relevant person in charge of Geely has said that it will invest to help Proton to increase sales to 200,000 units in the 1990s. At the same time, we provide technology and prototypes to Proton and sell them in Southeast Asia, South Asia and Australia under the brand name of Proton. In addition, Geely Investment helped Luster's sales and promoted the Proton and Luster brands to enter the Chinese market.
With the introduction of the “One Belt, One Road†initiative in China, the Southeast Asian and South Asian markets have become the export hub of China's auto industry. The data shows that in 2016, China's automobile exports to the countries along the “Belt and Road†in Southeast Asia and South Asia increased significantly. Last year, China's exports to India increased by nearly 500%. As Proton has the advantages of network in Southeast Asia, Geely Automobile can further expand the Southeast Asian market in the future.
Geely and Baoteng newlywed Yaner, the outside world reported that Geely might sell Volvo. Moreover, it has also calculated the account in a "smart" way: Geely and Volvo have cooperated for seven years. Today's market value exceeds 10 billion US dollars, and some people think of the price of 90 billion yuan to collect it. Based on the purchase price of $1.8 billion in the year, the profitability of this sale exceeded 700%. Therefore, after the acquisition of Proton, Geely also has a springboard for internationalization, Volvo does not seem to be so important.
However, Zhang Zhiyong, a senior analyst in the automotive industry, told the Times Weekly reporter that Li Shufu, the chairman of Geely, is a typical Zheshang businessman and is well versed in business. The competition in the automotive industry is fierce. Compared with one more opponent, it is definitely better to make more money with one partner. Therefore, from a commercial point of view, Volvo's market value has risen so much, Geely can properly transfer or issue equity to repay some loans. In this way, Geely sold a part of Volvo's equity, giving the Swedes greater autonomy, and instead of investing money in Proton and Luster, this possibility is relatively large.
Get together "six packs"
Since 2006, Li Shufu has led Geely Holding to start a multinational M&A run for 10 years. Ten years ago, Geely Group acquired 19.97% of the shares of British Manganese Bronze and signed a joint venture agreement with British Manganese to produce taxis. Subsequently, Geely Group successively acquired DSI Automatic Transmission Company and Volvo Cars in Australia; Geely Group also launched a docking with DRB until the middle of this year, which produced a substantial fruit. Geely successfully acquired a 49.9% stake in Proton and a 51% stake in Lotus.
According to Li Shufu's plan, Geely Automobile will achieve 2 million production and sales in 2020. The allocation of this target is 400,000 overseas and 1.6 million domestically. However, until last year, with the rapid growth of Geely's production and sales, there were only 760,000 vehicles. In terms of exports, it has been frustrated again and again in recent years. In 2013, Geely Automobile also exported 118,900 units, and by 2016, it had dropped to 22,000 units, and exports accounted for less than 3% of total sales. In the face of such a severe situation, Geely must rely on external forces.
Jia Xinguang, a senior analyst in the automotive industry, told the Times Weekly reporter that if Geely wants to achieve the "2020" strategy as scheduled, it means that in the four years of 2017-2020, Geely's annual growth rate needs to reach nearly 30. %. Even so, it is only 2 million vehicles per year by 2020, and the average annual sales volume of the world's major multinational automobile groups is more than 3 million. Therefore, Geely Automobile, which is marching toward the world's leading multinational automobile group, needs to go a step further through mergers and acquisitions. To build a multinational auto group, only one Volvo is not enough.
At present, Geely Volvo has laid out the European and American markets. Next, Geely will use the resources of Proton to introduce Geely, Lectra and Volvo brands into Malaysia and even Southeast Asia, which will further realize Geely's global layout. In this way, Geely Holding Group already owns five automobile brands Geely, Lectra, Volvo, Proton and Lotus (Lotus), plus the London taxi company, the "six packs" of the Geely brand LOGO is almost collected. Complete.
It is bold to imagine that Volvo will become the top five global luxury brands in the future, Geely will become the top three Chinese brands, and the leading companies that are heavily involved in the promotion, relying on the multinational group of these brands, in terms of scale, can squeeze into the top five in the world. Said that the problem is not big.
Make up short board
Li Shufu once stressed that new energy, light weight and intelligence are the three major trends in the future development of Geely Automobile. Among them, new energy and intelligence, Volvo can be developed together with Geely; but lightweight, but not Volvo's areas of expertise.
However, this is the strength of the lotus.
The sports cars and racing cars developed by Lotus are known worldwide for their lightweight. In the next step, Geely's project should shift to the field of electric vehicles in the direction of new energy, and Geely develops electric vehicles. Before the cost of batteries is greatly reduced, it should focus on the mid-to-high-end level like the companies like Tesla and Weilai. Lotus's technical ability in the all-aluminum body structure and vehicle performance is just right.
Zhang Zhiyong even believes that whether it is the Volvo brand, Lectra, or Lotus itself, with the engineering skills of Lotus, it is possible to produce quite impressive samples of electric vehicles in a short period of time. The most optimistic prediction is that next year’s The Beijing Auto Show may be able to see such works. “In fact, with the UK as the R&D design center and China as the production base, Geely can reshape Lotus into a new type of automobile company with innovative technology image, focusing on high-performance electric vehicles, and then using Volvo's manufacturing technology and supply chain. There is also China Geely’s infrastructure, human resources and public relations, and Geely’s shortcomings in new energy are expected to be quickly completed,†said the analyst.
To date, Geely has established a number of overseas factories in the UK, Egypt, Indonesia, Uruguay, Sri Lanka, and Ethiopia. It has exported to more than 20 countries and regions, and even ranks first among Chinese brands in Saudi Arabia, Cuba and Sudan. With the listing of the British Lotus and Lectra brands, Geely is also expected to gain more market share in the UK. What the industry sees is that Geely's acquisition is very rhythmic. It is not just for scale expansion, but to collect different parts of the puzzle, and to combine different parts of a building. Volvo brings high-end brand and product development capabilities. Teng helps open the Southeast Asian market, and Lotus provides engineering support and high-end electric vehicle core technology.
It is foreseeable that after all these are all compatible and accepted, Li Shufu's Geely Automobile “Kingdom†is not far from “becoming the most competitive and respected Chinese automobile brandâ€. .
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