17 In February, Great Wall Motor and General Motors jointly announced that the former invested in the acquisition of GM's manufacturing assets in Rayong, Thailand. According to the binding agreement signed by both parties, General Motors Thailand Company, including Rayong House Automobile Factory and Powertrain Factory, will be handed over to Great Wall. The two parties plan to complete the transaction by the end of 2020. The reason for setting a relatively long delivery time limit is that the agreement still needs the approval of the regulatory agencies of China, the United States and Thailand.
Aerial view of Luo Yong factory in Thailand
65438+1the day before October, 17, Great Wall Motor announced that it had also signed a binding agreement to acquire the Tarigon plant in India under the general motors. According to the agreement, GM India will be handed over to Great Wall Motor, including this full-process factory. The transaction will be completed within three quarters.
Wei Jianjun's Exquisite Expansion Logic
Two consecutive blockbuster transactions have surprised the industry even in the global context. Cooperation and M&A are the mainstream of global automobile industry. On the surface, the related costs of seeking synergy and reducing scale are actually contraction and merger. On the other hand, Great Wall Motor expanded countercyclically. Under the cycle of global manufacturing recession, Wei Jianjun has not changed its established strategy for 10 years. What is the reason?
Wei Jianjun, Chairman of Great Wall Motor
In the first two months of 2020, at least from the outside, the "self-identity" of GM and Great Wall Motor reversed. The former has become a "regional" automobile enterprise with Chinese and American markets through a series of divestment and asset sale actions, while the latter has leapt onto the stage of globalization through acquisition and new layout.
So the two sides hit it off and realized their long-term strategies through a series of transactions. The difference is that mary barra, CEO of General Motors, clearly declared GM's strategy after taking office on 20 14. On the other hand, Wei Jianjun, Chairman of Great Wall Motor, has never systematically expounded the strategy of Great Wall Motor. The behavior styles of these two enterprises are engraved with the distinctive marks of their respective leaders.
Their strategic thinking is just the opposite. This reflects the frustration of GM's market recognition; Similarly, it also reflects that Great Wall Motor has repeatedly strengthened its global role. In fact, the strategy that Great Wall Motor is implementing is by far the most ambitious global expansion strategy among China automobile companies.
Of course, it is mainly driven by Wei Jianjun Thought. However, the leader's ideas must come from long-term market practice and feedback. In short, Great Wall Motor is becoming more and more confident and taking bold expansion actions, which is not only related to its encouragement in the market, but also related to Wei Jianjun's view on the market.
Global layout of Great Wall Motor
In the face of the general trend that the global economy encounters headwinds and major markets go down, contraction is a well-understood measure. It is not difficult to understand why Wei Jianjun is unwilling to change its long-established globalization strategy.
One is due to the self-confidence of the system-Great Wall Motor is becoming stronger and stronger in the fierce competition in China market, its product range is constantly expanding, and its R&D strength is confirmed. In fact, the more and more obvious "spillover effect" of the latter made Wei Jianjun gradually have the idea of going abroad.
Second, after the expansion of enterprise scale, the requirement for strategic leeway is higher. It turns out that Great Wall Motor, SUV and pickup truck live comfortably in regional and market segments, because Great Wall Motor has long-term dominant products in these two market segments. However, Wei Jianjun's ambition did not allow him to lie in the report book. In his view, global business does not allow obvious shortcomings of mainstream products. The huge and complete product line of first-line car companies has not been abandoned by the times, but has repeatedly become a symbol of the company's strength and a breakwater for the company to deal with systemic risks. The so-called east is not bright and the west is bright.
Automatic assembly line of Tula factory in Russia
Wei Jianjun asked to go out.
The same is true of the market scope. At present, although the overall capacity of China market is huge, there is an obvious "mass ceiling" for specific enterprises-2 million vehicles. Up to now, no China brand has reached the level of 2 million vehicles, so it is impossible to join elite clubs. This is the historical inertia caused by the first-Mover advantage of multinational enterprises.
In 20 19, we saw that the market share of China brand decreased from 42. 1% to 39.2%. A similar situation happened at 20 1 1, when the voice of singing was endless. However, standing on the vertical line of history, the rise of China brand is the general trend. This trend is colliding with historical inertia. There is no shortage of struggle between the rising and the remaining in any commercial field. At this time, strategic determination and courage to break the game are needed.
Harvard brand released "5-2- 1" globalization strategy.
Wei Jianjun never lacked the courage to make a decision. Great Wall Motor needs broader market space, more intellectual resources, more stable supply chain and more networked marketing channels. Simply put, Great Wall Motor needs more territory. Wei Jianjun's decision on the package project is traceable.
The time interval between the announcement of India and Thailand projects is very short, just over three months from the actual operation of BMW beam project and only over half a year from the commissioning of Tula factory in Russia. It means that the globalization strategy of Great Wall Motor led by Wei Jianjun shows obvious signs of acceleration. Wei Jianjun does not implement the practice of linking one ring with another in series, but several elevators run in parallel. We see that the project ranks first, but the progress is different.
Incremental Market and "Warm Water Strategy"
Let's look back. Why are India and Thailand behind Russia? The similarity of the three is that they are all "incremental" markets, not "stock" markets in developed countries. The base is very important, and more importantly, the "cake" can continue to grow bigger. Otherwise, involution will worsen the competitive situation and be more unfavorable to new entrants. Since Wei Jianjun wants "strategic space", it must make a choice. He didn't lack toughness. It took him five years to build Russian production capacity. He didn't give up. After entering India and Thailand, Wei Jianjun changed its approach. Instead of building new production capacity by itself, it adopted the strategy of purchasing mature production lines and slightly transforming them, supplemented by its own R&D strength.
Indian auto show conference site
India and Thailand are a new chapter in Great Wall Motor's globalization strategy, which can be called "warm water strategy". (Warm Water Raiders: Because the North Indian Ocean where India is located and the Western Pacific Ocean where Indochina Peninsula in Thailand is located are low latitudes, the water temperature is relatively high and they belong to warm water areas)
India and Thailand will become the first 10 and the first 1 1 full-process vehicle factory of Great Wall Motor respectively. The difference between the two is that Indian companies are more "full-featured". Although at first they will rely on the model provided by the headquarters (which may be improved locally) for KD production, after that, Indian companies will be more inclined to operate independently and have the ability to form a complete industrial chain independently.
Wei Jianjun designed it this way, mostly because he realized that as a market and a production base, they have different attributes.
Thailand's domestic market is relatively small, with annual sales of 20 1910.04 million vehicles. With the promotion of supply chain integration within ASEAN, Japanese car companies have explored ways to use Thailand as the production base of ASEAN market. Although Great Wall Motor and GM Thailand are different in product focus, there is not much difference in Thailand's positioning.
India is different. No one can deny the size and growth of India. Before 20 15, India has been sought after as the "last virgin land" in the global automobile market. But today, India's potential has not been fully exerted, and the direct reason is very complicated. But the fundamental reason is that the income of Indian residents and the process of industrialization are behind expectations. This does not mean that India has no future, it almost certainly has broad prospects. Wei Jianjun's strategic investment in India depends on this judgment.
Indian auto show site
20 16 Great Wall Motor has extended its research and development tentacles to India. Great Wall Motor invested 280 million rupees to set up a research and development center in Bangalore. Great Wall plans to deploy battery R&D and manufacture in India, and cooperate with vehicle R&D and production to form a complete production, research, supply and sales system, realize long-term localization and realize the transition of Indian production capacity to EV. It is worth mentioning that India has not experienced a complete "fuel vehicle" market development.
India as Wei Jianjun knows it.
At the end of 20 19, India surpassed Britain and France to become the fifth largest economy. Although some people criticize its poor economic quality, it is a measure of China's amazing industrialization process. Indians are obviously slower and the integration of internal forces is more complicated.
India needs foreign manufacturers to enter before it can get some industrial energy. Great Wall Motor launched Haval and Great Wall EV brands suitable for the current Indian market in the early stage. Next, Great Wall Motor will practice EV strategy in China and India at the same time. This is in line with the national policies of the two oil-consuming countries. Although the infrastructure is worse, India's determination to promote EV is not small, just shouting some unrealistic slogans. Great Wall Motor did not underestimate India's potential.
Great Wall EV brand unveiled at Delhi Auto Show, India.
Great Wall Motor plans to establish a battery R&D and production system in India with the help of a mature domestic supply chain, and firmly control the EV upstream industry in its own hands. Obviously, Wei Jianjun is making long-term plans, rather than selling several marketable cars.
Just when GM was depressed about the Indian market, Wei Jianjun had a different view, and he noticed some signs of "wind coming". At present, most residents in Indian cities can only consume cars that are cheaper than those in China, but the Indian automobile industry is becoming an important force to promote economic growth. Moreover, capital always flows to the cost depression. As the United States is facing China, it is foolish to be hostile to the Indian economic rise. The choice made by Great Wall Motor can objectively be regarded as an extension of China's economic circle, and the automobile industry chain between India and China has also become closer. Great Wall Motor needs to import parts from China for Indian and Thai factories.
Locking the Indian and Thai markets by establishing transnational production chains is only part of Great Wall Motor's global strategy. Wei Jianjun's global expansion will not stop there. Great Wall Motor's capacity expansion strategy is still based on the "incremental" market. If Wei Jianjun adopts a new expansion strategy, it is likely to continue southward along the Indian Ocean and reach the east coast of Africa. However, this is a long-term plan after the Indian project matures. It is no accident that the Great Wall Motor expansion plan deployed by Wei Jianjun coincides with the national strategy of "Belt and Road".
This article comes from car home, the author of the car manufacturer, and does not represent car home's position.