During German Chancellor Angela Merkel's visit to China, Beiqi Foton and Daimler signed a "Joint Venture Contract" to establish "Beijing Foton Daimler Automobile Co., Ltd." (hereinafter referred to as the "Joint Company") . After eight years of love, Futian and Daimler finally entered the wedding hall.
How wonderful is this marriage? What can the joint venture bring to Foton? Why has Beiqi Foton waited so eagerly for eight years? Let us go through the "Announcement on the Signing of a Joint Venture Contract with Daimler AG and Daimler Northeast Asia Investment Co., Ltd." issued by Foton on July 16, 2010 (hereinafter referred to as the "Announcement") and January 2009 The relevant content disclosed in the "Proposal on the Joint Venture Project with Daimler AG and Daimler Northeast Asia Investment Co., Ltd. to produce medium- and heavy-duty trucks and their engines" (hereinafter referred to as the "Proposal") passed by Foton's board of directors on the 6th comes from check it out.
●Financing
Foton has been expanding recently, with multiple projects launched in the first half of 2010 alone: ??On January 14, Foton held the Auman GTL new energy-saving event at the Auman factory in Huairou. The launch ceremony of the heavy truck technological transformation project, with an investment of 2.6 billion yuan, will be completed and put into production before the end of this year; on May 25, Foton announced an increase of 340 million yuan in the joint venture company, Beijing Foton Cummins Engine Co., Ltd.; on June 3, Beijing At the city's major industrial project signing ceremony, Foton and the Changping District Government signed the "Beiqi Foton Heavy Machinery Project Settlement Agreement". The total planned investment of the project is approximately 2 billion yuan;
Foton Shandong Weifang Automobile Factory is in The high-tech industrial development zone held a groundbreaking ceremony, with a planned total investment of 4.5 billion yuan. In terms of expanding overseas markets, Foton plans to increase its KD partners from the original 4 to 15 in 2010, and will establish a wholly-owned factory in Mexico. Such a huge investment plan will really test Futian's capital operation capabilities.
The "Announcement" disclosed: "The total investment in the joint venture between Foton and Daimler is RMB 6.35 billion, and the registered capital is RMB 5.6 billion, of which Foton Motor uses assets related to the Auman business The in-kind investment was RMB 2.8 billion; Daimler AG and Daimler Northeast Asia Investment Co., Ltd. jointly contributed RMB 2.8 billion in cash.”
The current market value is RMB 22 billion. For Foton, more than 10 billion have been invested in other projects launched in the first half of this year, and the financing pressure is not small. The 2.8 billion yuan in cash provided by Daimler is indeed a huge support for the project.
The joint venture period disclosed in the original "Proposal" was 30 years, but the officially signed "Joint Venture Contract" extended this period to 50 years. The length of the joint venture was extended while Daimler's investment amount remained unchanged. Presumably Foton also made huge concessions and sacrifices during the negotiation process from the "Commercial Vehicle Joint Venture Agreement" to the "Joint Venture Contract."
●Products
According to the "Announcement", the products produced by the joint venture are divided into three parts:
The first is Foton's existing Auman medium and heavy trucks , including Auman H2, ETX3 series, 5 series, 6 series, and 9 series. These are the current Foton products, which are the same as before the joint venture.
The second part is the "Auman" medium and heavy truck hybrid model equipped with OM457 engine. At this year's Beijing Auto Show, the Auman BTX exhibited by Foton is an ETX equipped with an OM457 engine.
The third part is the OM457 engine whose emission standards can reach Euro V. The OM457 engine is not currently Daimler's best heavy-duty diesel engine. The engines currently used by Mercedes-Benz's flagship heavy-duty truck Actros are the OM510LA and OM502LA series, with a maximum horsepower of 598PS. The OM457 engine is mainly installed on Mercedes-Benz's economical heavy-duty truck Axor. The Bluetec version of the OM457LA engine currently installed in Mercedes-Benz heavy trucks can meet EEV emission standards that are even more stringent than Euro V.
According to the plan, my country will begin to implement the National V emission standards (similar to Euro V standards) as early as 2014. my country’s traditional overseas markets for heavy trucks, such as Russia, the Middle East, South America and other countries and regions, have also generally begun to It implements Euro IV emission standards and will soon implement Euro V emission standards.
If the engines produced by the joint venture only meet the Euro V emission standard OM457, and Daimler does not continue to provide subsequent upgrades of emission technology, then the OM457 engine will only be able to keep up within 5 years, and then up to 45 years later. In the past year, the joint venture can only rely on its own research and development capabilities to improve the performance of the engine.
It is worth noting that Foton has a joint venture with Daimler, and Daimler has not launched any complete vehicle products, which is somewhat unfair to Foton. The "Proposal" stated: "Daimler will provide experts and technical support to assist in the technical upgrading of Auman's medium- and heavy-duty truck products to meet the technical requirements of both parties' future global joint ventures and other target markets for Auman's medium- and heavy-duty truck products." No. Know whether this part of the content is included in the formally signed Joint Venture Contract.
Although Daimler failed to bring complete vehicle products to Foton, the Auman GTL heavy truck project launched by Foton this year made up for this regret. The internal code name of Auman GTL heavy truck is H4. In fact, the development of H4 heavy truck has been planned as early as 2003 when Foton and Daimler began to contact each other. The Auman GTL is a heavy-duty truck product based on the Mercedes-Benz Actros. Although its appearance has changed, its internal structure is the same as that of the Actros. It will be a good combination to match the GTL that inherits the Actros structure with the Mercedes-Benz OM457 engine. The Auman GTL hybrid model will also be a very competitive heavy truck in the Chinese market. Of course, Auman GTL will also have a regular version equipped with Weichai and Cummins engines.
●Technology
The "Announcement" introduces: "The joint venture will invest in establishing its own research and development center in accordance with relevant national industrial policies to develop medium-sized trucks for sale in the Chinese market. and heavy-duty truck products." The earlier "Proposal" described it this way: "The joint venture will invest in the establishment of a technical center to enable it to conduct comprehensive testing of the complete vehicles, chassis and key components of the company's various series of models. The ability to independently develop, research and improve existing products is necessary to develop new medium- and heavy-duty truck products that are suitable for the joint venture company to be globally competitive, and to support the joint venture company's function as a research and development center for the global cooperation business of both parties. The company will provide support to the technical center in the form of expert guidance, technical training and the introduction of necessary development technology software and hardware to achieve the overall optimization of Foton Auman products and improve the adaptability of the OM457 engine to make it more suitable for Foton Auman. Products."
From "developing new medium- and heavy-duty truck products that are suitable for the joint venture's global competitiveness and can support the joint venture's function as a research and development center for the global cooperation business of both parties" to "developing for sales in the Chinese market. medium- and heavy-duty truck products." Daimler has greatly reduced its commitment to support the joint venture's research and development. Obviously, this is also caused by the change in the target market from global shrinkage to China.
●Brand
The "Foton" and "Auman" trademarks are bound to the joint venture's vehicle products. Among them, the vehicle products equipped with the OM457 heavy-duty engine are marked "Mercedes-Benz Power". There are pros and cons to this model. The advantage is that Foton can retain its own brand and continuously enhance its brand value; the disadvantage is that Beijing Foton Daimler Automobile Co., Ltd. cannot use the "Mercedes-Benz" brand, and its market influence-especially It is because when entering overseas markets, it cannot directly rely on Daimler's halo.
●Parts
Obviously, after the joint venture, in addition to getting the OM457 engine, Foton can also win over some Daimler suppliers to improve the parts for Auman medium and heavy trucks. Even the quality of the vehicle is beneficial. At the same time, Daimler can also select the stronger ones from Foton's excellent Chinese suppliers and incorporate them into its global procurement system, or persuade its suppliers to move their factories to China to reduce Daimler's purchase of its own products. costs and improve competitiveness.
●Market
As for the domestic heavy-duty truck market, although many heroes have emerged recently, various capitals have entered one after another, and the competition is extremely cruel and fierce, the current big pattern has basically been set: liberation , Dongfeng, SINOTRUK, Shaanxi Automobile, and Auman will join the first group; SAIC Iveco Hongyan, JAC, Beiben, and Valin, as the second group, will continue to attack the status of the first group; while GAC, GAC, and Rising stars such as Rui, Chang'an, and Universiade may come from behind and make a difference, but they need to be tested by the market.
However, judging from the sales data from January to June 2010, the heavy truck sales of the First Group accounted for 83% of the national heavy truck sales, and the concentration level is already very high. Therefore, the factors that can really help Foton increase its domestic market share are to improve product quality and technical level, improve the quality of after-sales service, establish its own characteristics among increasingly homogeneous products, and provide the best products according to the different situations of users. operational solutions. The joint venture with Daimler will not help Foton much in these aspects. As the cost of domestically produced heavy trucks continues to rise, and Chinese heavy truck users continue to increase their demand for high-end products, the sales of European imported high-end heavy trucks in the Chinese market will continue to expand. Daimler's Mercedes-Benz heavy-duty truck has surpassed Volvo to become the largest-selling heavy-duty truck brand in China. And with the impact of the joint venture with Foton on the Chinese market, Daimler will have a greater opportunity than other European heavy truck manufacturers to expand market share in China.
For overseas markets, it is even more unfavorable for Foton. It was mentioned in the "Proposal": "The joint venture project of medium and heavy trucks and their engines is the first step in the global cooperation between the two parties. It is also the operation center of the two parties' future global cooperation business in Russia, South Asia and Central and South America. It is the management of the two parties' global cooperation business. Centers for decision-making, R&D, production, supply chain management, and marketing management, and joint venture projects in Russia will serve as regional production and sales centers.
After the completion of the project, the two parties intend to establish a Russian joint venture within 2 years. , to establish a South Asia joint venture within 3 years, and to establish a Central and South American joint venture within 5 years." In the "Announcement", all such high ambitions came to nothing, and it was just "any product sales outside China within the scope of the joint venture company's business. It will be led by Foton Motors with the support of Daimler. "What we saw at the same time was that on November 24, 2009, Daimler signed a joint venture agreement with Kamaz, Russia's largest truck manufacturer. Formed two joint ventures and produced Mercedes-Benz Actors and Axor series trucks at its factory in Russia.
On March 9, 2010, Daimler announced that it would invest US$970 million in the next five years to build a factory near the southern Indian city of Chennai to produce trucks, including light, medium and heavy trucks; March 2010 On March 30, Daimler said it would expand commercial vehicle production at its Brazilian plant for its Mercedes-Benz brand starting in 2011. Obviously, in the officially signed "Joint Venture Contract", Daimler has abandoned Foton and wants to exclusively enjoy overseas markets such as Russia, South Asia, and Central and South America. The joint venture with Foton is also to get a bigger piece of the pie in the huge Chinese market. Domestically, Foton and Daimler seem to be partners entering different market segments, while in overseas markets, Foton and Daimler will be tit-for-tat competitors.