Dongfeng seeks changes, the commercial vehicle business is controlled by the group, and Dongfeng Co., Ltd. focuses on the passenger vehicle business
After the equity change is completed, Dongfeng Co., Ltd. will focus onpassenger carbusiness,commercial vehicleThe business improvement is controlled by Dongfeng Group.
(Image source: Car Affair Fiction / Photo)
Text | Car Affair Fiction Figs
On May 31, Dongfeng Motor Co., Ltd. (“Dongfeng Motor”) announced that Dongfeng Motor Group Co., Ltd. (“Dongfeng Group”) and Dongfeng Motor’s controlling shareholder Dongfeng Motor Co., Ltd. (“Dongfeng Co., Ltd.”) The “Share Transfer Agreement” was formally signed on May 30.
(Image source: Announcement screenshot)
According to the agreement, Dongfeng Co., Ltd. will transfer its 598 million shares of Dongfeng Motor (accounting for 29.90% of the total issued shares of Dongfeng Motor) to Dongfeng Group, and the agreed transfer price is 5.60 yuan per share. The total transfer price of the target shares is 3.3488 billion yuan. It is also agreed that after the completion of the agreement transfer, Dongfeng Group will issue a partial tender offer to all shareholders of Dongfeng Motor (except Dongfeng Group) to acquire 502 million shares (accounting for 25.10% of the total issued shares of Dongfeng Motor), and the offer price is 5.5%. 60 yuan per share to gain control over Dongfeng Motor.
After the transaction is completed, the controlling shareholder of Dongfeng Motor will be changed from Dongfeng Co., Ltd. to Dongfeng Group. The actual controller was changed from Dongfeng Limited to SASAC.
(Image source: Dongfeng Motor)
Integrate the commercial vehicle section, and the division of labor becomes clearer
As for the reason behind this equity change, Dongfeng Motor gave the answer: “Dongfeng is a major move to continue to deepen the reform of state-owned enterprises and expand and strengthen its independent commercial vehicle business.”
In fact, it is not difficult to see the purpose behind the equity change from the business scope of the two companies. That is, the bridge returns to the bridge, and the road returns to the road, which makes the business of each company more focused.
According to Dongfeng Motor’s official website, the company is positioned as a “light vehicle overall operation solution provider”. In its product matrix, light trucks, engineering vehicles, passenger cars, pickups and other commercial vehicles are the main ones.
(Image source: Dongfeng Motor official website)
According to the official website of Dongfeng Co., Ltd., the company is the first company in China established by Dongfeng Group and Nissan to own a full range of passenger cars and light commercial vehicles.It owns Dongfeng Nissan Passenger Vehicle Company, Dongfeng Motor Co., Ltd., Zhengzhou Nissan Motor Co., Ltd., Dongfeng Motor Co., Ltd.car parts(Group) Co., Ltd. has four major business divisions (with four major brands of Dongfeng, Nissan, Venucia and Infiniti).
With the transfer of Dongfeng Motor’s shares to Dongfeng Group, it means that Dongfeng Co., Ltd. no longer holds the commercial vehicle business, but focuses on the passenger vehicle business of Dongfeng Nissan, Dongfeng Venucia and Dongfeng Infiniti. The commercial vehicle business is regarded as one of the future strategic development priorities of Dongfeng Group.
(Image source: Announcement screenshot)
According to the announcement, as of the end of 2021, Dongfeng Group’s total assets were 319.767 billion yuan, total liabilities were 167.703 billion yuan, net assets were 152.064 billion yuan, and the asset responsibility rate was 52.45%. In 2021, Dongfeng Group will achieve a revenue of 113.008 billion yuan, a year-on-year increase of 4.67%; a net profit of 11.375 billion yuan, a year-on-year increase of 7.31%.
With the scale, the competitiveness of a single business is insufficient
From the perspective of enterprise scale, Dongfeng Group’s volume in the terminal market is already large enough. However, if its business segments are split individually, there are few bright spots. In recent years, except for the commercial vehicle business, the performance of its joint venture brands has not been very good.
In fact, just before the integration of the commercial vehicle business, Dongfeng Group has successively made strategic adjustments to its joint ventures and its own brand businesses.
For the joint venture business, Dongfeng has gotten rid of the two “burdens” of Dongfeng Renault and Dongfeng Infiniti, and even withdrew from Dongfeng Yueda Kia at the end of last year. Currently, in the joint venture passenger vehicle business, Dongfeng only retains Dongfeng Nissan and Dongfeng Honda.
As for Dongfeng’s own brand business segment, it is even more “indescribable”. Among them, Dongfeng Fengshen is naturally and needless to say, it is basically hopeless to enter the mainstream lineup. And the Lantu brand, which has spent a lot of money, has also begun to show signs of “big thunder and little rain”. Although in terms of momentum, Lantu is more willing to invest, but in terms of terminal market performance, it is difficult to use “qualified” to define Lantu based on the resources invested before and after Dongfeng. With the increasing number of competing products, the follow-up trend of Lantu may be more difficult.
For Dongfeng, it is obviously more pragmatic to stabilize the existing advantages of the commercial vehicle business. For this shareholding change, some people in the industry believe that it is not ruled out that it is to pave the way for the return to the A-share market. No matter what kind of speculation, for Dongfeng, what is most needed at the moment is to create a star model to boost the overall momentum.
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Original title: Dongfeng seeks changes, the commercial vehicle business is controlled by the group, and Dongfeng Co., Ltd. focuses on the passenger vehicle business