SMM: a few days ago, Lifan shares announced that the company has been applied by creditors to enter the bankruptcy reorganization procedure, and it applied to the Chongqing Fifth Intermediate people's Court for judicial reorganization. If the court accepts the creditors' application for company restructuring in accordance with the law, the company's shares will be delisted risk warning.
At the same time as Lifan announced that it had entered the bankruptcy reorganization process, another piece of news spread widely in the automobile circle, that is, "Geely Motor's acquisition of Lifan Co., Ltd. is a foregone conclusion." In this regard, Geely Motor sought confirmation from the Public Relations Department of Geely Holdings Group, and the other side said bluntly that it "did not know" and did not affirm or deny it. Media reports show that if Geely buys Lifan, it will take over the shell resources, production qualifications and financial licenses of listed companies in Lifan, while Lifan will only retain the motorcycle plate. Another analyst said that the rumored Geely takeover of Lifan may be valued by the latter's Yuanyang plot in the Liangjiang district of Chongqing, which is currently worth 10 billion yuan.
Combined with Geely's mergers and acquisitions at home and abroad, its hands or mergers are established car companies or emerging technology companies with great development potential, such as the acquisition of Volvo, Proton, the American flying car company Taili, and Daimler's introduction of smart, holding Valin Xingma to make up for the shortcomings of commercial vehicles. Geely "buy" on the way, every step points to a predetermined outcome, then, the acquisition of Lifan on the verge of bankruptcy, what are the strategic considerations? Galaxy believes that if Geely succeeds Lifan, it is likely to boost its market share in the southwest.
Geely holds hands with Liangjiang New area, taking root in Chongqing
In early July, Geely Holdings Group and Chongqing Liangjiang New area formally signed a strategic cooperation agreement, Geely high-end new energy vehicle project, Geely Industrial Internet headquarters and digital factory project settled in Liangjiang New area. Geely and Chongqing Liangjiang New area hand in hand, what is the reason?
Data show that the Liangjiang New area in Chongqing is the first state-level new area in the hinterland. at present, it has formed a complete industrial chain of eight vehicle enterprises and more than 200 core supporting enterprises, accounting for 70% of the total industrial scale of Chongqing in 2019. At the same time, based on the development of digital economy, Liangjiang New area promotes the transformation and upgrading of the automobile industry to the direction of intelligence, greenness, brand and integration. This development concept coincides with the development path of Geely holding Group in the direction of "new four modernizations".
The analysis shows that strengthening cooperation between Geely and Liangjiang New area of Chongqing is convenient for Geely to make use of the relatively perfect supporting resources in the region to accelerate the transformation to the direction of digitalization. It is understood that the Geely digital plant project plans to introduce about 20 industrial incubators in the form of a joint laboratory within five years. For Liangjiang New area in Chongqing, Geely's high-end new energy project belongs to the high-quality project in the automobile industry. The introduction of this project will help to enhance the ability of the automobile industry chain in the region to resist risks, and at the same time promote the industry of Liangjiang New area to move forward to the high end of the global value chain.
Since this co-operation is beneficial to both sides, the acquisition of land for plant and factory construction by Lifan is a prerequisite for Geely to take root in Chongqing.
Increase the weight of new energy to boost the market share of the southwest region
How is Geely's market performance in the southwest at the present stage? According to the insurance data of the Insurance Regulatory Commission, the Geely Automobile Research Institute compiled Geely's regional sales in China in the first half of the year. Geely's sales in the top 10 provinces in the first half of the year, only three in the southwest, Guangdong, Sichuan, Guizhou, and most other southwest provinces are in the second echelon of Geely's sales in the first half of the year. For example, there are more than 10,000 insurance data in Guangxi, Chongqing, Yunnan and Fujian in the first half of the year.
From this point of view, although the southwest market is not in the forefront of Geely's total sales, it is a veritable backbone. Expanding the proportion of sales in the southwest market will contribute to a significant increase in Geely's overall market share. Judging from the current production capacity layout of Geely Automobile, its factories in Zhejiang and Shandong can radiate to East China, the factories in Hunan and Hubei mainly radiate to the central region, and the factories in Shaanxi can radiate the northwest region. at the present stage, the southwest region mainly depends on the Chengdu factory to spread out.
In addition, Geely has continued to add weight to the field of new energy in recent years. The layout map of Geely new energy passenger car production base sorted out by Geshi Automotive Research Institute shows that it has new energy vehicle production bases in Hangzhou, Ningbo, Taizhou, Yiwu, Zhangjiakou, Jinzhong, Wuhan, Chengdu, Xiangtan and other places.
In terms of brand and product layout, at this stage, Geely and Lock brand main products in addition to the fuel version of the model, almost achieved full coverage of the PHEV version, in addition, there are Maple Leaf, Geometry, Polar Star three pure electric brands, to achieve the full coverage of new energy products in low, medium and high grades.
In April this year, Geely holding Group signed a strategic cooperation agreement with the people's Government of Hunan Province and the people's Government of Changsha City, formally hosting the Cheetah Automobile Changsha factory of Changfeng Group, a state-owned enterprise in Hunan Province. An industry insider who spoke on condition of anonymity believes that the starting point of Geely Trust Cheetah Changsha plant is to introduce new energy products and technologies, further take root in Hunan, expand the existing base and continue to enter the new energy market. Similarly, after Geely leads the Liangjiang New area in Chongqing, the acquisition of Lifan will be conducive to the rapid landing of its high-end new energy vehicle project, and at the same time, the Chongqing base and the Chengdu base in Sichuan will form a linkage effect to better serve the southwest market and expand the market share of new energy vehicles in the southwest region.
Obtaining the financial license and enabling Cao Cao to travel is not the main reason for the rumored acquisition.
On the motivation of Geely's acquisition of Lifan, there is also a view in the industry that "Lifan has the financial license that many automobile companies dream of, which plays an important role in the development of sectors such as Cao Cao Travel under Geely." Regarding this view, the senior analyst of Gaishi Automotive Research Institute believes that "Geely's financial company, Geely Financial, also has a financial license, so this view is not valid."
According to Tianyan check information, Geely Auto Finance Co., Ltd. is an auto financing company jointly established by Geely Automobile Holdings Co., Ltd. and BNP Paribas personal Finance Co., Ltd., mainly providing financing services to Geely, Volvo and Lecker customers. At the same time, public information shows that the company was established in Shanghai in August 2015 as a national financial institution with a financial license.
Since Jizhi Finance has this function, Lifan's financial license is less attractive to Geely. According to the analysis of Geshi Automotive Research Institute, Lifan is a private enterprise, and there is no outstanding progress in the passenger car sector, both products and technology are not at the same level as Geely, and it is difficult for Geely to form a synergy with it after the acquisition. Therefore, at this stage, Geely's acquisition of Lifan, the main starting point is likely to quickly take root in Chongqing, expand the layout of new energy, in order to seize the larger market scale of the southwest region.
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