SAIC's spending plans

To make several own brands with only 10 billion Yuan in financing - it is a masterpiece

In its published bulletin said: SAIC 2010 non-public offering of A shares plans, planning to issue A shares to raise the total amount does not exceed 10 billion yuan into its own brand passenger cars, commercial construction, the dual clutch gearbox parts and so on.

Such financing allocated to independent brands, SAIC is a masterpiece. Although we still need to raise funds, but to make a great independent vision has already appeared

Correspondingly, product plans within SAIC can be seen from the plan at least the next four years. 4 years, the cumulative investment reached 17 billion, SAIC's own road has been layed out?

Aside all uncertainty can not but say that this is a very exciting news. 10 billion investment, look at the past, accommodating both state-owned enterprises, or autonomous enterprise, who has held such high investment?

Is well known, independent brands in domestic investment has always been great efforts to achieve the microscopic results of long-term investment. Independent enterprises in the capital's hard-pressed not say, so-called self-only a minor, the final mixed result came out too, but Geely, BYD so little of several other companies are also still in line between life the struggle. Do not worry about the financial state-owned enterprises, and joint ventures, cooperation also make money trading, but investors who had no self to see the effectiveness of the big move.

In this regard, no doubt SAIC's 10 billion domestic enterprises do not produce own cars on a tranquil lake ripple. In fact, several major domestic Automotive Group since last year are doing their own brands in the plan. Reason a large part from the national advocacy on the development of independent brands. But the real claim to have great action, great achievement, but so far not achieved.

SAIC to raise the large amount of money, this will be used for its own car brand investment 6,047,100,000 yuan, the independent brand commercial investment 1,178,500,000 yuan, double-clutch automatic transmission assembly projects 656.5 million yuan and the technical center building of two projects 2,804,000,000 yuan. Concern is for its own car brand investment projects, the total amount of more than half of the major aspects of model development for its own brand of mid-size car into 3 series and 5 senior car series, including "Rong Wei" and "MG", the two brands is comprised of 8 series of model products, the basic model involving passenger cars and sport utility vehicles (SUV) and many other types.

Similarly, in SAIC's internal product planning, the show this information: from next year until 2014, and MG Roewe brand will launch from the two brands independently 14 new models. Among them, the Roewe 750 line will be 550 new medium-term evolution and modification, MG will launch a code-named A-AP12 the sides of cars and a code for the AS21 small SUV. In 2012 and 2013, the SAIC Roewe 350 will be released one after another mid-facelift, MG AP13 A-Class sedan and Roewe ZP13 A0-class car.

You watch, this 10 billion and the 14 new cars, the product plan formed before and after the echo of the situation. What SAIC has put together as a self-dual brand, will glow with the new vitality.



Financing problems

However, faced with large investments and vision plans, even SAIC, is not without difficulties. 10 billion is only in respect of financing is a no easy chore.

Not easy because not only from increased competition in capital markets, financing more difficult, but also from self-SAIC joint venture with the roll out of the battlefield, their need to keep the blood. Since last year, both in joint ventures or on the self-respect, SAIC has been careful not move again and again, quite a large range of motion. These include Shanghai Volkswagen south strategy by building a new factory, Shanghai GM and SAIC-GM-Wuling overseas expansion project launched passenger cars, without exception, need to move turnover of large projects.

In addition, SAIC had also been reported to be within the Cloud Power Corporation shares Kunming Yunny car diesel engine business, although it has been clarified by the SAIC issued a public notice, but "within the next 3 months within the cloud power no significant assets restructuring plan" commitment does not mean there will not be related to action since.

All of these funds in particular, is easy on the cash flow is tight, SAIC itself admits, considerable financial pressure. The release of this 10 billion yuan are subscribed in cash, funded SAIC will also not less than 10 million shares of this offering subscription of not less than 10% of the total number of shares. SAIC's count all the funds required for the project business, the pressure is imagined.

On the other hand, both the joint venture, or independently, each project needs to involve energy, force and more are scattered, not easy to concentrate on force, and then he makes, this is a good deal of large structure's sake.



Sloping ends

Back and look at the distribution of the 10 billion yuan, comparison, SAIC commercial 1.1785 billion yuan of investment in the share of the total 10 billion yuan, the doubt seems very cramped. Cast talk to than the share of own brand, it is very hard to deserve some love. Although the 2009 commercial vehicle sales reached 1.12 million SAIC, Shanghai Automotive Group's total sales accounted for 41%, but still not able to change SAIC seems more "favored" the fact that passenger cars.

In fact, the benefit from the "South Steam integration" after the accession of Nanjing Iveco, SAIC commercial vehicles have a relatively clear and strong commercial brands. The SAIC also said its commercial hopes the efforts of 3 to 4 years to enter the domestic commercial vehicle first camp. Obviously, it is also about to become a true enterprise-class cars, commercial vehicles and passenger cars must go hand in hand, can not be biased.

But compared to the clear layout of a dual-brand passenger cars, commercial vehicles segment SAIC is a lot of problems: too many mergers and acquisitions led to a number of commercial interior products overlap, mixed, R & D intensity is too weak ... ... the reason why last year sales volume reached 1.12 million, is completely soiled SGMW light.

Therefore, SAIC will focus seems to be more targeted to the commercial vehicle segment, in addition to the many commercial vehicles continued to rationalize existing relations within the brand, increase investment in R & D investment in particular, is still in a period of time SAIC commercial vehicles Urgent act. Planning in the next 4 years, the number of sections related to commercial vehicles, will herald SAIC "took advantage of balance" time sooner or later, also about the "big SAIC" grand time in the morning and evening to achieve.

The last question is on the SAIC-GM-Wuling. SAIC-GM-Wuling passenger cars of young project, so SAIC-GM-Wuling both ways, in addition to hero status as a commercial vehicle, passenger cars is the third among the SAIC own brand position. Therefore, the media, said: "SAIC will form a whole by the MG, Roewe, and SAIC-GM-Wuling brand posed by a new system of own brands." And brands title as the "High", "China" and "Low" positon takes in all situations.

However, careful observation is not difficult to find, fund-raising plan from the content point of view, clearly not sub-children SAIC-GM-Wuling, which can not be said that SAIC's another "psychological" tilt. In this context, to talk about SAIC own brand passenger cars "troika" of the era too early, took advantage of simultaneously "leapfrog development" has still a need to wait and see.

In fact, the benefit from the "South Steam integration" after the accession of Nanjing Iveco,