5 billion acquisition funds to 0 SGMW cars aimed at Chery

China's first launch of high-end independent brand cars, Shanghai automobile (600101.　　SH) to kill a "greatest second act", into the previous independent brand strategists must contend for the middle and low-end car field. May 25, at the 2009 annual shareholder meeting in Shanghai Auto, Chen Hong, chairman of Shanghai Automotive and SAIC-GM Wuling (SGMW), said SGMW's upcoming sedan will soon enter the fastest-growing domestic market with the largest share of Chery, Geely and BYD.　　As for the future integration of shareholders ' concerns, Shanghai Auto finance director Peak said SAIC will conquer key parts and components in the future and enhance its core competitiveness. "Chery" "GM hopes to increase the SGMW stake in the negotiations have been very smooth, SAIC will also fully support." "When shareholders asked about SGMW's passenger car development strategy, Chen Hong said.　　The reporter learned that the Guangxi Zhuang Autonomous Region government has agreed to timing delivery.　　At the moment, GM has held 34.9% of shares in the SGMW, and in order to increase its holdings by 10%, GM has been consulting for years about acquiring more equity, and the local government has offered to agree to transfer the shares, but in return GM will support the SGMW development sedan. Previously, the GM in the domestic two joint ventures to distinguish between the strategy of competition, SGMW failed to enter the relatively high profit of the car sector, and in the micro-car sector, but has created a myth of the sale of hundreds. But with the micro-car market saturated, SGMW has sprouted the idea of entering the car field. The introduction of the design concept of the sedan in 2007.　　This year Beijing Auto show SGMW launched the new car Wuling macro-light, is a compact business car, from the appearance, has been close to Jianghuai passenger cars Rui Feng MPV. Since last year, SGMW Liuzhou, Qingdao two major bases of capacity expansion plan has been quietly launched. According to the plan, by the second half of 2012, its Liuzhou base of the overall vehicle production capacity will be increased from the existing 590,000 vehicles to 800,000 vehicles. In addition, Qingdao base of the two-phase capacity expansion project will also be launched in recent days.　　After the completion of the two major expansion projects, will form a north-South linkage, flexible deployment of the layout, for passenger car projects to provide adequate capacity protection. "We're going to go into this market and grow, and that's our strategy," he said.　　Chen Hong said that this market refers to the middle and low-end market, the current main competitor is the domestic brand. SAIC's own brand has been used in the middle and high-end approach, and Shanghai GM, although the introduction of the new euro price is also below 60,000, but Chen Hong that, compared to those independent brand enterprises, the price of the sail is still relatively high.　　And SGMW is located in Guangxi, with its low-cost to build the concept of the current market with the mainstream of independent brand car competition. Previously, SGMW has developed a plan for the development of intermediate cars, the first car in the old Excelle platform to build, by the pan-Asian development.　　According to SGMW's recent public car program, SGMW will announce a brand new passenger vehicle brands to be released shortly in the Shanghai World Expo.　Build the core competitiveness　Last year, Shanghai car sales completed the whole year 2.72 million vehicles, an increase of 57%, to achieve net profit of 6.5 billion yuan, the year-on-year growth of 9 times times. But the drawback is that, affected by the overall market, Shanghai car last year, failed to do the right, did not realize the financing plan.　　Hu Maoyuan, chairman of SAIC, is deeply sorry.　　But this does not affect the deep pockets of SAIC investment, according to SAIC's 2009 annual report released at the end of April, SAIC plans to invest more than 5 billion yuan in mergers and acquisitions this year, including passenger car projects up to 3 billion yuan, commercial vehicle projects up to 2 billion yuan. For this investment, investors are generally concerned about the successful acquisition of NAC, SAIC's next step in the integration of the focus. In this regard, Peak said: "At present and in the future for some time is the domestic and international auto market mergers and acquisitions integration of high-density period, SAIC does not give up participating in integration of mergers and acquisitions opportunities, but in production facilities and brand acquisition cautious."　　SAIC's focus is on core and key components, including the components of new energy vehicles to enhance their core competencies. And for future profits, Peak said, according to the Shanghai automobile internal monitoring, the raw materials, especially steel cost increased more than 10% this year, the whole vehicle and parts production must have an impact. But the automobile industry scale effect is obvious, to the raw material price amplitude resists the ability to be big, therefore the influence is not as big as 2000 before. Shanghai automobile in the first half of this year's middle-end car (b-Class car) market sales continued to increase, accounting for all sales increased by nearly 1% Year-on-year, which is also an important factor in the cost of Shanghai automotive digestion. At the same time, Shanghai Automotive will continue to improve energy efficiency to cope with rising costs.