Deepening of the Joint Venture Negotiations: Subaru Made or Locked Chery

Since it was announced last year that it would achieve localization in China, Subaru’s selection of Chinese partners for joint ventures has attracted wide attention both inside and outside the industry. After several scandals, the reporter recently learned that its joint venture negotiations with Chery Automobile have entered an in-depth phase.

A person close to the Chery Automobile told this reporter that although Subaru and Chery Automobile have not yet reached a final agreement, they have basically determined their intention of cooperation and the two parties may establish a joint factory in Dalian. A person close to Subaru told this reporter that Subaru has indeed terminated his contacts with BAIC and is now negotiating with Chery. However, it is unclear at what stage the negotiations will be advanced.

In response to this news, Chery Automobile insiders told this reporter that at present the project has not yet reached the point where it can be announced and declined to disclose detailed information.

Flowers fall Chery?

As early as the end of last year, Japanese media reported that Subaru and Chery have formally entered into joint venture negotiations. Subaru's parent company, Fuji Heavy Industries, plans to invest 30 billion yen (approximately 2.4 billion yuan) in a joint venture factory in Dalian in 2011, 2013 The company will be officially put into operation, with an initial production capacity of 50,000 vehicles and will gradually reach 150,000 to 200,000 vehicles.

Since last year, news of joint ventures between Subaru and FAW, SAIC, BAIC, Jiangling, Lifan and other domestic automobile companies have been reported. They have not been confirmed at all. Chery Automobile now surfaced.

The above-mentioned person close to Chery Automobile stated that the reason why Fuji Heavy Industries chose Chery Automobile was based on several reasons: First, Chery has no joint venture precedent and joint venture with Chery. Subaru is more highly valued, and it has an even greater presence with Chery. The product lines do not conflict. For Subaru, cooperation with other auto groups may be difficult to gain equal status with other multinational auto companies.

Chery, as the standard bearer of its own brand, has made significant contributions to the development of China's auto industry, and may be more easily approved by the government. In addition, Chery Motors has a relatively large number of networks, which is also the resource that Subaru can use immediately after being made domestically.

Regarding the joint ventures of Chery and Subaru, an insider of Chery Automobile told this reporter that at present, the project has not yet reached the point where it can be disclosed to the public. “Now we are still watching what everyone has in hand and what is "Interested with each other", this is the focus of current attention.

Last year, Subaru Motors once stated that it will finalize the joint venture partner that will be localized in China by the end of last year. Now, this time point is pushed back to the end of March of this year, which is the most recent Japanese company’s fiscal year (2010 4). Month - end of March 2011). If this time is true, then before and after the Shanghai Auto Show in April, the matter may be disclosed.

According to the news of the joint venture between Subaru and Chery, Chery Automobile News Spokesperson Jin Yibo told this reporter: “Now I can only say 'no news'.”

Interest intersection

For the joint venture between Chery and Subaru, there are different views in the industry.

Jia Xinguang, a senior analyst in the automotive industry, told this reporter that it is too much trouble to approve a new joint venture project. In addition to having a certain scale, it is also necessary to launch an engine factory and an R&D center at the same time. Subaru as a niche car company, I do not know whether it can do it. For them, technical cooperation is also an acceptable solution.

People close to Chery Automobile stated that Subaru has a long-term plan for realizing China's localization, and it prefers joint ventures in one step. According to current trends, the approval of joint ventures will become increasingly difficult. If Subaru really wants to break through its bottleneck, it now appears that it can only be achieved by relying on the Chinese market, which is still in its development stage.

At present, Subaru's global sales are about 600,000. The United States, Japan, and China are the three largest markets in the world, of which the US market sold 260,000 vehicles last year. China, as the third largest market, sold 57,000 vehicles last year and only 35,000 in 2009. The growth is very rapid.

At present, Subaru's production base is only located in Japan and the United States, of which the production capacity of the US base is 160,000.

In fact, as early as 1992, Subaru cooperated with Guihang Group, a military background, to bring its best-selling mini-vehicles into China by means of technical cooperation. Later, it invested a further 450 million yuan in the shareholding of Guizhou Lark and directly dispatched management personnel. However, these efforts did not change the situation in Guizhou Skylark sales. In 2002, Subaru quitted.

In 2004, the Subaru brand was reintroduced into the Chinese market, but this time it did not cooperate with any companies and entered in pure import form. Horizontally opposed engines and full-time four-wheel drive technology have enabled Subaru to establish a relatively high-end brand image in the Chinese market.

Last year, Chery formulated a strategy to hit the high-end market and re-examine the high-end breakthrough. Chery’s insiders frankly stated that the quality and technology of Chery’s vehicles are constantly improving, the gap between them and the joint ventures is getting smaller and smaller, and in some respects it is not even behind the joint ventures, but the brand image has not been improved synchronously. Generate brand premiums and long-term entanglement in the low-end market.

In the current fierce competitive environment, joint ventures are a shortcut to enhance brand image for independent brands. In fact, now independent brands have begun to use external forces to enhance their strength. Geely added a lot of color to its brand through the acquisition of Volvo. BYD Auto also increased its reputation through cooperation with Mercedes-Benz in the field of electric vehicles.