Suzuki 1 yuan to sell joint venture equity to withdraw from China
On September 4, Chongqing Changan Automobile Co., Ltd. (hereinafter referred to as “Changan Automobileâ€) announced that Changan Automobile intends to acquire Suzuki Co., Ltd. (hereinafter referred to as “Suzuki Motorâ€) and Suzuki (China) Investment Co., Ltd. (hereinafter referred to as “ Suzuki China" holds a 50% stake in Chongqing Changan Suzuki Automobile Co., Ltd. (hereinafter referred to as "Changan Suzuki").
It is noteworthy that on June 15, Suzuki had already withdrawn from its own joint venture in China, Changhe Suzuki. The divestment means that Suzuki Motor will no longer have a joint venture in China and officially withdraw from the Chinese market.
According to the announcement, Changan Automobile and Japan's Suzuki and Suzuki China reached an agreement on September 4, Changan Automobile acquired 40% and 10% equity of Changan Suzuki held by Suzuki and Suzuki in China for 1 yuan in cash. After the completion of the acquisition, Changan Automobile holds 100% equity of Changan Suzuki.
Changan Automobile said in the announcement that the acquisition of Changan Suzuki's equity is in line with Changan Automobile's strategic appeal. First, Changan Suzuki's assets are of good quality, and the plant production line and other equipment facilities are relatively perfect. Second, Changan Suzuki is currently part of Changan's foundry products, and the remaining capacity can be used as The capacity of Chongqing base is supplemented; the third is the acquisition of Changan Suzuki's equity, which is conducive to the stability of Changan Suzuki employees and related parties.
According to the data, in 1984, Suzuki began to provide technology to China, and established two joint ventures in China. In 1993, Suzuki and Changan jointly established Changan Suzuki. Two years later, in 1995, Suzuki and Changsha Changhe jointly established Changhe. Suzuki.
In the early days of entering the Chinese market, Changan Suzuki has maintained a brilliant performance. In 2003, with the two models of Alto and Antelope, Changan Suzuki achieved the first annual sales of 100,000 vehicles. In July 2008, Changan Suzuki Alto, a mini-car with a cumulative sales volume of more than 500,000, was delisted. In September 2009, Changan Suzuki's new generation Alto was listed, and the annual sales of the elderly An Suzuki exceeded 150,000 for the first time. After that, Changan Suzuki achieved rapid growth in 2010 and 2011, with annual sales exceeding 200,000 and 220,000, respectively.
However, Changan Suzuki has been in a state of decline after the historical peak of sales of 220,000 vehicles in 2011. In 2012, Changan Suzuki sold 170,000 units, down 22.7% year-on-year. By 2016, Changan Suzuki had sold only 115,000 units, which is half the sales peak. In 2017, Changan Suzuki's annual sales volume was 86,513 units, which continued to decline by 26%. In 2018, Changan Suzuki sold almost all of its sales. In the first half of the year, the cumulative sales volume was only 24,121 units, down 47% year-on-year.
Behind the continued decline in Changan Suzuki's sales, the market share of domestic economic cars continued to shrink, and Changan Suzuki has long been immersed in the economic car market. The data shows that the market share of economic cars in 2012 was 20%, and by 2016, this figure fell to 6.9%.
Cui Dongshu, secretary-general of the National Passenger Car Market Information Association, said that Suzuki’s withdrawal from China was due to the inability of its product structure to keep pace with the rapid transformation of the Chinese auto market. The electric transformation of the automotive industry is a big opportunity, but Suzuki failed to grasp it. However, the withdrawal of Suzuki from China does not mean that there is no development opportunity for foreign investment in China. Overall, the development of Japanese car companies in China is still good.
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