As we all know, the automotive industry is a long-industry industry. The assembly of a car requires cross-vendor, cross-regional, and even cross-border cooperation to be successfully completed. As the world's largest automobile production and marketing country, the Chinese market has always been favored by overseas, and China's core component production has also been controlled by foreign investors for a long time. As China's international status has increased, the "Made in China 2025" and "One Belt and One Road" strategies have been steadily advancing, and China is also trying to free itself from foreign capital dependence.
The surging automotive parts market
The auto parts market is a huge cake. The international market is surging and changing. The mergers and acquisitions happen one after another, making people unpredictable. Samsung Group is South Korea's largest multinational conglomerate, and it has been meticulously laying out its auto parts business.
Samsung Electronics previously announced that it will spend US$8 billion to acquire Harman International, a US auto parts maker. Harman’s shareholders’ meeting was also officially approved by Samsung.
According to reports, if Samsung Electronics successfully acquires Harman, this will also be the largest overseas merger and acquisition by Korean companies so far.
After Harman's shareholder approval, this purchase transaction also needs to be approved by regulatory authorities in the United States, China, South Korea and the European Union. It is estimated that if all goes well, the acquisition transaction will be completed in the third quarter of 2017.
In recent years, there has been a convergence of technology and automotive industries. Under the demonstration effect of Google, self-driving cars have risen around the world. Many technology companies and traditional car manufacturers have developed automated driving technology.
Samsung Electronics previously appeared to be slow in the automotive sector. With the acquisition of Harman International, Samsung will narrow the gap with its competitors. In the automotive electronics field, Samsung will also gain greater room for development.
Samsung Electronics is in final negotiations with Fiat Chrysler Motors and plans to acquire Fiat's auto parts maker Magneti Marelli this year.
According to sources, the key issue in the negotiations is Samsung's acquisition price. Last year, when the two sides started negotiations, Samsung allegedly bid 1 trillion won, but Fiat's psychological price exceeded 3 trillion won.
According to sources, the two companies also reached a provisional agreement on the purchase price. Samsung has considered Magneti Marelli as the best partner to achieve synergy with Harman International.
Samsung has always hoped to acquire lighting, car entertainment and telematics technology through the acquisition of Marelli. These technologies are provided to Fiat, Chrysler, Jeep and other Fiat-Chrysler brands as well as Maserati, Alfa Romeo and other luxury brands.
Samsung Electronics, SAMSUNG Motors and other Samsung Electronics affiliates have already cooperated with Fiat on automotive displays and camera sensors.
How is the market in China?
In 2016, China's total automobile sales exceeded 28 million, and the growth rate of production and sales reached double-digit again. The rapid growth of production and sales volume brought about the development of the auto parts industry. In the past less than 5 months in 2017, 14 auto parts companies have been added to the A-share market, and 23 companies are still in the process of the listing review. China's auto parts industry seems to be accelerating.
Before 2005, the number of listed auto parts companies was only 26, and the local production of auto parts was not high. However, the "Administrative Measures for the Import of Auto Parts That Constitute the Characteristics of Complete Vehicles" promulgated in 2005 promoted the domestic production and assembly of auto parts and components, and resulted in the establishment of a batch of joint venture parts and components enterprises. The auto industry in China has been able to deeply access international production technologies. , The degree of local production of auto parts has increased.
From 2006 to 2009, the number of listed A-share auto parts in China increased by an average of 2.2 each year. Although the bill was abolished after 2010, the trend of domestic substitution of auto parts has been formed, and the development of the auto parts industry has accelerated significantly. From 2010 to 2016, there were an average of 6.8 companies listed each year. If you exclude the impact of the 2013 IPO suspension, the speed of listing in 2010-2016 will be 8 homes/year. As of May 15, 2017, the number of listed companies stimulating the auto parts industry that was accelerated with the IPO issuance in 2017 has soared by 14 again, forming the current size of 98 companies.
Step by step
China has been introducing overseas advanced technologies to automobile manufacturers, but at the same time, Chinese auto parts companies are also accelerating the pace of “going outâ€.
In mid-March of this year, Qingdao Double Star announced that it had signed an agreement with Kumho Tire to acquire Kumho Tire's 66,368,800 shares, which accounted for 42.01% of its total share capital, which means Qingdao, with 955 billion won (approximately RMB 5.75 billion). DoubleStar will hold South Korea's second largest tire company.
Also in March this year, Del shares acquired 100% equity of Fuxin Jiachuang at a price of RMB 1.9 billion, which led to the indirect acquisition of Germany's CCI company. The main products of CCI include car vibration damping and noise reduction, and structural strengthening of parts and components. In addition, in September 2016, Tate Electromechanics acquired e-Traction, the largest wheel-motor company in Europe.
M & A in the field of parts and components is the main force of foreign investment in the entire automotive industry. According to the China Automotive Industry External Investment Report released by Deloitte, from 2013 to 2016, China's own-brand automobile and parts and components companies completed a total of 60 overseas M&A transactions, involving a total amount of USD 17.7 billion; of which, parts and components companies involved in transactions. The proportion of the total volume and total volume of transactions exceeds 70% and 80% respectively. According to this calculation, in a short span of four years, China's spare parts companies spent more than US$14 billion on mergers and acquisitions.
Continual mergers and acquisitions have enabled Chinese auto parts companies to quickly enter the global vehicle support system.
Take Huayu Automotive as an example. In 2013, Huayu Automobile acquired 50% of Yanfeng's equity. In 2015, Yanfeng established Yanfeng Interior, the world's largest automotive interiors company, with Huayu Holdings holding 70%. Through the acquisition of Yanfeng, the interior business of Huayu Automotive began to enter the global supporting system. In 2014, the revenue of Huayu Automotive's overseas business accounted for only 1.6%. In 2016, this figure has risen sharply to 24.1%.
According to the research report of Huatai Securities, some high-quality auto parts companies have grown into internationally competitive parts and components companies relying on cost advantages and supporting capabilities. CITIC Daycare has become the world's largest automotive aluminum hub supplier.
It can be said that China's spare parts industry has ushered in new opportunities for development. It is growing rapidly and is expected to become a world-famous industry in the automotive industry.
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