On February 10, Volvo Car Group (hereinafter referred to as "Volvo Car") and Geely Automobile Holdings Limited (hereinafter referred to as "Geely Automobile") (HK.0 175) announced that they were planning business integration to form a more powerful global enterprise group. The reorganized new group will connect with the global capital market through the listed entity of Hong Kong Geely Automobile, and the next step will be to consider listing in Stockholm.
In 2020, it coincides with the tenth anniversary of Geely's acquisition of Volvo. What is the significance of Geely and Volvo choosing to reorganize at this time node? What is the focus of subsequent restructuring? In the medium and long term, what impact will the reorganization have on both sides? What impact will this reorganization have on China's automobile industry? ?
With these issues of great concern to the industry, this issue of "One Product Big Coffee Talk" has conducted in-depth exchanges and discussions with the "think tank" big coffees on the topic of Geely-Volvo integration, with a view to understanding more views of the industry on Geely-Volvo integration from multiple dimensions and its subsequent impact. The following is a wonderful view-
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Editor-in-chief of Auto-First? week
As soon as this news came out, some people joked that after Geely Volvo merged into a car company, it should be called "Lee's Car Shop". Although it is a joke, it is a joke, but I think the name "Lee's Car Shop" is the best praise for Li Shufu. From the "poor boy" Geely staged the myth that a snake swallowed an elephant and married a Swedish princess, to let Volvo run wild, and then in ten years, Volvo Asia Pacific established a complete R&D system for ten thousand people from scratch, and then the Lexus brand owned by Volvo was born during this period. All these are behind Li Shufu's series of magical operations.
We noticed that the "electric head" of this news source came from Gothenburg, the headquarters of Volvo, rather than Hangzhou, the headquarters of Geely, which released a strong signal that Volvo was not passive or even active in the integration process. It is only a matter of time before the integrated Geely Volvo goes public, just around the corner.
President of global automobile group? Li Hongwu
Ten years after Geely bought Volvo, it's time to merge. Under the background of enterprise globalization, car companies that want to be bigger and stronger must seek their own way. At the same time, under the background of the coordinated development of automotive technology research and development, cost control and finance, Geely and Volvo plan to merge and become a larger global automobile group.
Judging from the big framework announced at present, Geely or Geely, Volvo or Volvo are all independent brands, not simply who merged with whom? Who manages who, but the strong alliance, the future work goal should focus on research and development, cost control and the improvement of overall work efficiency including production.
In the future, the "new four modernizations" of automobiles will be a huge field. Even the world's top automobile groups such as Volkswagen and Toyota are seeking cooperation on a global scale, and it is impossible to advance independently in all fields. Akio Toyoda once said: "In the face of the new four modernizations of automobiles, we can't just rely on one automobile company, but more rely on strong alliances." Geely and Volvo have a specific relationship, so their strong alliance will be more tacit, mutual understanding and complementary advantages, and the overall income will be higher.
General manager of Phoenix. Com automotive division? Hu Jinnan
Whether from the perspective of being prepared for danger in times of peace or from the perspective of dealing with the transformation of the new four modernizations industry, integration has been Geely's overall thinking in recent years. So this merger plan is not surprising. This is not in contradiction with "Geely is Geely and Volvo is Volvo" ten years ago.
Looking back on the past two years, we will find that traditional multinational car companies with small and beautiful brands or strong brands but moderate scale have encountered some difficulties in their development. In the face of this industrial transformation, if the strongest brand does not have a considerable scale, the transformation will be very difficult.
Therefore, we see that the CEO of Volkswagen Group has repeatedly emphasized the synergy of its brands. For the same reason, PSA should also merge with FCA, including Geely's acquisition of Daimler shares, and Japanese car companies' deepening alliance all belong to the same idea. Therefore, the focus of integration is also here. Integration is not an end, but how to achieve higher synergy efficiency and innovation efficiency.
Chezhi.com co-founder and senior vice president? Zhang Yinghu
I think the result of this preliminary negotiation is both unexpected and reasonable. After all, the global automobile industry is in an unprecedented period of great challenges and great changes, and all parties are looking for a way out. Therefore, it is impossible to say who borrowed whose card. It can be said that Geely and Volvo are the inevitable choices to reach this historical node. Because it is only a preliminary negotiation, the future development depends on the final decision and specific details of both shareholders, including the policies of Hong Kong and Sweden stock markets. The approval of the two governments will affect the future direction of this integration.
The next step, I think, is to clarify their respective responsibilities and rights, and lay a relatively stable foundation for the future development of the whole Geely Volvo Group. Throughout the history of international automobile industry mergers, the interests are the most ambiguous, and it must be made clear that this is the key point of successful integration.
China automobile dealers association, executive director? Jia
This will undoubtedly promote the deeper merger of Geely and Volvo car business. Earlier, Geely and Volvo announced that they would merge their engine businesses. Today's merger may be based on deeper cooperation, combining the automobile business, * * * enjoying a new platform, public procurement to save costs, and even adopting the strategy of joint sales in the global market.
Senior reporter of China Consumer News, Director of Automobile Division? Shi Gan Yuan
Ten years after Geely acquired Volvo, it has made great progress in brand building, which has promoted the rapid development of Geely and laid a good foundation for Geely to build a brand new brand and acquire other foreign brands.
President of Che Zhilian Technology (Beijing) Co., Ltd.? Li zhong
Although the two sides have only announced the big framework at present, from the planning of Geely and Volvo Cars in recent years, the two sides will not only realize large-scale investment in the "new four modernizations", but also carry out imaginative cooperation and innovation in the global automobile industry cooperation. It can be seen that the merger of Geely and Volvo Cars may be just the beginning. Geely is accelerating the development efficiency of the automobile industry through global cooperation, using more forms of cooperation to accelerate the development efficiency and cope with the internal and external structural adjustment of the automobile industry.
Geely's response to the merger is to invest, reduce costs and finance, and the core is to gain recognition from the capital market through the merger. At present, SAIC is the automobile group with the highest market value in China, with a total market value of 248.39 billion yuan. The current market value of Geely and Volvo is about 238.94 billion yuan. If Geely and Volvo complete the reorganization, the new company after the merger of Geely and Volvo will not only enhance their ability to attract China capital, but also connect and expand their ability in the global capital market, giving play to the effect of "1+ 1 > 2", and the market value of both parties will definitely continue to climb.
According to the plan, Geely's four major automobile brands will be injected into listed companies, and Geely Holding plans to list in Stockholm at the same time, so that Swedish investors and investors can directly invest.
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Editor-in-chief of Auto-First? week
First, it will produce synergy and help Geely to make a big step forward in internationalization, including brand, capital and image; Second, it provides a mirror for mergers and acquisitions of other brands.
President of global automobile group? Li Hongwu
If the two parties merge, first of all, in terms of capital, Geely is a listed company in Hong Kong, and Volvo has plans to list in Stockholm. Now Volvo only has some capital injection in Sweden or Europe, but after the merger with Geely, it can gain the attention of China, a huge capital market and even the global capital market. In addition, after the merger, human resources, management and the recognition of the whole ecology are all points that both sides need to consider.
Nowadays, the production and sales volume of China automobile market continues to decline. Although there is undeniable development potential, a wave of enterprises will be eliminated after the arrival of the new four modernizations, and only a few enterprises will survive in the end. Therefore, while maintaining high efficiency, China brand needs to face the test of technology, capital and R&D investment in the future. Strong alliance is the only way.
In addition, China brand internationalization is not a slogan, and whoever buys it is called internationalization. In the long run, the decisive factor lies in the culture of the enterprise, the sense of mission of the enterprise and the vision of the entrepreneur. Every enterprise should adapt to local conditions and develop according to its own situation.
General manager of Phoenix. Com automotive division? Hu Jinnan
No strategic result is 100% certain or predictable, but we hope to see Geely Automobile, Volvo and several other brands under the Group have a mutual amplification effect in scale cost and innovation synergy in the future. Of course, efficient collaboration also faces some challenges. At present, all brands under Geely Group have their own positioning. How to improve their management and innovation benefits while still maintaining their respective tonality and characteristics is also a detail that should be paid attention to after the merger.
China's car companies have different paths to internationalization, but in terms of capital, Geely is undoubtedly the most far-reaching. From Volvo to Proton to Daimler, as someone said, this is a big game. The automobile industry has been talking about going out. What's the matter? Is it just a product? So inspiration is not just going out, because when we say going out, the subtext is that our coordinates are still at home, the real international vision should be considered outside, and the global resource allocation should be considered in a multi-dimensional framework.
Chezhi.com co-founder and senior vice president? Zhang Yinghu
Volvo's greatest advantage is its brand and history, as well as its mature R&D accumulation and market system, but Geely's greatest advantage is precisely Volvo's shortcoming, that is, its control over the future development trend of China automobile market. Therefore, the two sides came together and became a fully integrated group company. Personally, I am optimistic. Relatively speaking, the positive significance of his future to China automobile enterprises is clearer, and it is more positive to the future development of Geely brand itself.
The international capital operation modes of Chinese traditional automobile enterprises are: Geely Volvo, SAIC Roewe, Geely Smart, Great Wall Crossbeam, etc. The international capital integration of the traditional automobile industry has basically come to an end. The future capital drama should be a wave of new forces represented by Weilai Weimar, and the competition in the field of sole proprietorship similar to Tesla and Toyota BMW Mercedes-Benz Volkswagen after 2022.
For China automobile brands, the internationalization path is no longer to seek joint ventures and mergers for limited shares, but to seek their own development through direct and indirect financing in financial markets. Of course, this also includes the opportunities brought by the reform of mixed ownership. Walking on two legs at home and abroad is the right way to open up the blue ocean of capital market.
China automobile dealers association, executive director? Jia
After ten years of running-in, the two have finally been adjusted, which will undoubtedly optimize the allocation of resources and better play a synergistic effect. Previously, there were many acquisitions in the China market, but due to management factors, it eventually had some bad effects, and Geely will undoubtedly give it some warning.
Senior reporter of China Consumer News, Director of Automobile Division? Shi Gan Yuan
If M&A's intention comes true, it will realize comprehensive mergers and acquisitions in finance, technology research and development, cost control and other aspects, inject more development momentum into this enterprise, realize technology and cost synergy, and help it become a more competitive international automobile group.
President of Che Zhilian Technology (Beijing) Co., Ltd.? Li zhong
Due to the good complementarity between Geely and Volvo, the reorganized company may become the first worldwide automobile enterprise in China, and Geely itself will take this opportunity to stabilize its position in the domestic market and lay the foundation for entering the overseas market. As for Volvo, they opened up the China market through Geely's relationship, sought a worldwide revival based on the China market, and achieved phased results. In 20 19, the global sales volume of Volvo Cars was about 705,000, up 9.8% year-on-year. This is also the first time that the global annual sales volume has exceeded 700,000 vehicles since Volvo Cars was founded 93 years ago. Among them, the annual sales volume in China market is 16 1 10,000 vehicles, with a year-on-year increase of 18.2%.
At present, the market value of Geely Group is about $654.38+06 billion, while Volvo's conservative valuation is between $654.38+06 billion and $20 billion. The reorganization of the two will create a large group with a market value of about 30 billion US dollars and a shipment comparable to that of BMW. This market value is basically the same as that of Ford, and may surpass SAIC to become the China automobile group with the highest market value.
In the future, with the further reorganization of the business of both parties, the synergy will continue to strengthen. On the one hand, in the business link, Geely's technical level will be promoted from technology research and development and production front-end, and at the same time, in-depth cooperation will be carried out in the sales link. Geely is expected to extend its sales network to foreign countries and truly "go global". For Volvo, restructuring will help it continue to consolidate its position in the global market and increase its market share. At the same time, the integrated new group will continue to maintain the unique positioning of its brands such as Volvo Car, Geely Automobile, Link Automobile and Polar Star.
Previously, the capital market had predicted the relationship between Geely and Volvo, and most of the opinions were that Geely would sell Volvo to find another lover, or let Volvo go public independently for financing. Li Shufu, chairman of Geely, chose the third way: Geely and Volvo are integrated again. It fully embodies the wisdom and determination of Geely people. It is also a model for the future development of China brand.
Geely, a brand in China, has started all-round globalization from products to capital markets, and will further expand in overseas markets in the future. By then, the new group will have the strength and confidence to confront the world-class automobile groups and companies in terms of sales volume and market value. Through cooperation and collaboration, we will occupy the commanding heights of technology, push China manufacturing to the high end of the global value chain, and lead China automobile brands to rise continuously.
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.