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After three years of silence, China's top four auto groups once again started cross-regional mergers and acquisitions.
On May 16th, Dongfeng Automobile Group reorganized the Fuqi Group to unveil the answer. Dongfeng Motor Group will share the equity of Fuqi Group to 60% in two steps and become the controlling shareholder of Fuqi Group. The Fuqi Group and the Fujian Provincial Department of Administration have retreated to the top of the market to increase the weight of holdings - to increase sales of Southeast Motor, Fujian Province to promote the realization of the mid-level goal of the million-level auto industry. This framework of strategic cooperation agreements is clearly more in line with business logic - less verbal commitments under the table and more promises protected by law. If they achieve a win-win situation, they will be the beneficiaries of the restructuring from local governments to the Dongfeng Motor Group and Fuqi Group.
In the cross-regional merger and reorganization of the top four automobile groups in China, there are no shortages of forwarders and losers. The SAIC Group reorganized the Nanjing Automobile Group, and on the basis of win-win cooperation, it has finally achieved the win-win cooperation between the self-owned brand cars. Now SAIC Motor’s own-brand car has set an annual sales target of 240,000 vehicles. In 2009, Changan Automobile Group's reorganization of the Aerospace Industry's Hafei Motors and Changhe Motors caused a series of disturbances. Hafei Motors and Changhe Motors are still suffering losses.
Dongfeng Motor Group has many risks in this step and it still needs time to verify.