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Chinese Automakers
May Buy GM and Chrysler
By Bertel Schmitt
November 18, 2008 - 28,623 views
Chinese carmakers SAIC and Dongfeng have plans to acquire GM and
Chrysler, China's 21st Century Business Herald reports today. [A
National Enquirer the paper is not. It is one of China's leading
business newspapers, with a daily readership over three million.] The
paper cites a senior official of China's Ministry of Industry and
Information Technology– the state regulator of China's auto industry–
who dropped the hint that "the auto manufacturing giants in China,
such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng
Motor Corporation, have the capability and intention to buy some
assets of the two crisis-plagued American automakers." These hints
are
very often followed with quick action in the Middle Kingdom. The
hints
were dropped just a few days after the same Chinese government gave
its auto makers the go-ahead to invest abroad. And why would they do
that?
A take-over of a large overseas auto maker would fit perfectly into
China's plans. As reported before, China has realized that its export
chances are slim without unfettered access to foreign technology. The
brand cachet of Chinese cars abroad is, shall we say, challenged. The
Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If
their joint venture partner would let them. The solution: Buy the
joint venture partner. Especially, when he's in deep trouble.
At current market valuations (GM is worth less than Mattel) the
Chinese government can afford to buy GM with petty cash. Even a
hundred billion $ would barely dent China's more than $2t in currency
reserves. For nobody in the world would buying GM and (while they are
at it) Chrysler make more sense than for the Chinese. Overlap? What
overlap? They would gain instant access to the world's markets with
accepted brands, and proven technology.
21st Century Business Herald, obviously with input from higher-up,
writes that Chinese industry must change and upgrade. China wants
their factories to change from low-value-added manufacturing to
technically innovative and financially-sound high-value-add
industries. Says the paper: "It would be much easier now for strong
Chinese automakers to go global by acquiring some assets of their
U.S.
counterparts in times of crisis."
Deloitte & Touche sees a trend: "Chinese automakers can start with
buying out the OEM projects and Chinese ventures of some global
carmakers such as GM and Chrysler."
The Chinese appear to have bigger plans than an accounting firm can
imagine. 21st Century Business Herald acts and writes as if its
already a done deal, and the beginning of more to come. "In the
coming
two years China is likely to see a few of its large Chinese
automakers
and other manufacturing enterprises set a precedent for achieving
globalization by acquiring global companies, just like SAIC or
Dongfeng's possible acquisition of troubled GM or Chrysler."
Just in case you missed it, the Shanghai Automotive Industry
Corporation (SAIC) is China's largest auto manufacturer. In 1984, the
company entered a joint venture with Volkswagen. A decade later, SAIC
entered a joint venture with General Motors. In 2007, SAIC bought the
Nanjing Automobile Corporation, which had acquired British MG Rover
in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent
of
their shares are reported to be in government hands. They also are
one
of China's Big Three. The company has numerous joint venture
partners,
such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which
means
"East Wind") was founded at the behest of Mao Zedong himself in 1968.
http://www.thetruthaboutcars.com/breaking-news-chinese-may-buy-gm-
and-chrysler/
May Buy GM and Chrysler
By Bertel Schmitt
November 18, 2008 - 28,623 views
Chinese carmakers SAIC and Dongfeng have plans to acquire GM and
Chrysler, China's 21st Century Business Herald reports today. [A
National Enquirer the paper is not. It is one of China's leading
business newspapers, with a daily readership over three million.] The
paper cites a senior official of China's Ministry of Industry and
Information Technology– the state regulator of China's auto industry–
who dropped the hint that "the auto manufacturing giants in China,
such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng
Motor Corporation, have the capability and intention to buy some
assets of the two crisis-plagued American automakers." These hints
are
very often followed with quick action in the Middle Kingdom. The
hints
were dropped just a few days after the same Chinese government gave
its auto makers the go-ahead to invest abroad. And why would they do
that?
A take-over of a large overseas auto maker would fit perfectly into
China's plans. As reported before, China has realized that its export
chances are slim without unfettered access to foreign technology. The
brand cachet of Chinese cars abroad is, shall we say, challenged. The
Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If
their joint venture partner would let them. The solution: Buy the
joint venture partner. Especially, when he's in deep trouble.
At current market valuations (GM is worth less than Mattel) the
Chinese government can afford to buy GM with petty cash. Even a
hundred billion $ would barely dent China's more than $2t in currency
reserves. For nobody in the world would buying GM and (while they are
at it) Chrysler make more sense than for the Chinese. Overlap? What
overlap? They would gain instant access to the world's markets with
accepted brands, and proven technology.
21st Century Business Herald, obviously with input from higher-up,
writes that Chinese industry must change and upgrade. China wants
their factories to change from low-value-added manufacturing to
technically innovative and financially-sound high-value-add
industries. Says the paper: "It would be much easier now for strong
Chinese automakers to go global by acquiring some assets of their
U.S.
counterparts in times of crisis."
Deloitte & Touche sees a trend: "Chinese automakers can start with
buying out the OEM projects and Chinese ventures of some global
carmakers such as GM and Chrysler."
The Chinese appear to have bigger plans than an accounting firm can
imagine. 21st Century Business Herald acts and writes as if its
already a done deal, and the beginning of more to come. "In the
coming
two years China is likely to see a few of its large Chinese
automakers
and other manufacturing enterprises set a precedent for achieving
globalization by acquiring global companies, just like SAIC or
Dongfeng's possible acquisition of troubled GM or Chrysler."
Just in case you missed it, the Shanghai Automotive Industry
Corporation (SAIC) is China's largest auto manufacturer. In 1984, the
company entered a joint venture with Volkswagen. A decade later, SAIC
entered a joint venture with General Motors. In 2007, SAIC bought the
Nanjing Automobile Corporation, which had acquired British MG Rover
in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent
of
their shares are reported to be in government hands. They also are
one
of China's Big Three. The company has numerous joint venture
partners,
such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which
means
"East Wind") was founded at the behest of Mao Zedong himself in 1968.
http://www.thetruthaboutcars.
and-chrysler/
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