Yunnei Power Suspension said that shareholders are in contact with the Corps Group; Quanchai Power's parent company property rights reform is also being discussed. Following the wave of investment in diesel engine plants by a wave of OEMs around 2007, diesel engine plants once again appeared to be “closed†and there may be fewer and fewer independent diesel engine plants remaining in the capital market.
The relationship between OEMs and diesel engine plants has evolved gradually from a few years ago in strategic cooperation to equity cooperation, and there are more companies in the entire industry chain. As the heart of the automobile and construction machinery industry, diesel engines are of great value, and the whole plant cannot resist the urge to expand to it. There are few independent diesel engine plants in the world, of which Cummins is widely known.
Infiltrate into diesel engine plant
Yun Yun Power, which is still suspended, is suspended because it is possible to cooperate with the stocks of the Corps Group. Changan Automobile, a subsidiary of the CNG Group, currently lacks a diesel engine business platform. The 1.6-liter or less diesel engine developed by Yunnei Power can be used in mini-cars, and Changan Automobile is one of the leading mini-vehicles in China. Prior to this, Yunnei Power and SAIC had cooperated on the development of mini-vehicles, so the market has been rumored to have the possibility of equity cooperation.
"Whether it is cooperation with Chang'an or SAIC, it is very good for the development of the company's business," said Yunnei Dynamics. He explained that the main reason is that the company's focus on developing micro-diesel engines is to serve mini-vehicles, which requires close cooperation with automakers. “In the field of passenger vehicles, there is currently no independent engine manufacturer, and OEMs use their own engines.†Yunnei Power has increased the production capacity of its 200,000 units/year passenger car diesel engine in 2007, but this business is still in operation. Profits have not yet begun. Besides the fact that domestic diesel passenger vehicles have not been widely promoted, there is no “backing†that is one of the reasons.
While another announcement holding company is undergoing property rights reform, Quanchai Power, whose actual controller may change, has also spread many partners. Last year was the Central Enterprise Hengtian Group. This year it became the subsidiary Rongsheng Power, a subsidiary of Rongsheng Heavy Industry.
Yunnei Power and Quanchai Power have one thing in common. Diesel engines produced by both parties are equipped with light trucks and agricultural machinery. In this area, there are numerous vehicle manufacturers and engine manufacturers, and the competition is fierce. “The days of diesel engine plants supporting light trucks have been very difficult in the past few years. In the last two years, the days have been better due to the state's subsidy to agricultural machinery.†said Wang Hexu, an analyst at Huabao Securities.
Grasping the industrial improvement brought by government subsidies and obtaining a favorable position in the negotiations may be the idea of ​​the government of Yunnei Power and Quanchai Power.
The whole industry chain wave
In 2007, the independent diesel plant Shangchai Co., Ltd. was acquired by Shanghai Automotive, Shanghai Diesel Engine Co., Ltd. was expanded from the construction machinery market to the automotive market, and Shanghai Automotive also built the high-end engine market of SAIC Fiat Hongyan. The production of the product was partially self-employed. Export sales.
The main OEMs in the country all have their own diesel engine plants. FAW has liberated Xichai and Dachai together. China National Heavy Duty Truck has two engine production bases: Hangfa and Zhangqiu. Dongfeng Commercial Vehicles has Dongfeng Cummins and Renault is also introduced. engine. Even in the vehicle plant of Weichai Heavy Machinery Holdings, Shaanxi Heavy Industries also set foot in the engine area and jointly produced engines with Cummins.
At the same time, diesel engine companies are also expanding. Weichai Power has acquired Shaanxi Heavy-duty Vehicle Holdings through the acquisition of the Hunan Torch, and Yuchai has also been involved in the field of construction machinery.
A leader of the China Internal Combustion Engine Industry Association explained that when the engine demand reaches 300,000 vehicles, it is very necessary to have its own engine plant. This is also the reason why the passenger vehicle manufacturers are involved in the engine business, but in the field of heavy commercial vehicles, due to the variety Many, little production, and large investment, high threshold, single-engine diesel plant has more advantages.
However, with the continuous expansion of the sales of heavy commercial vehicles, many companies have expanded impulses. Xu Yingbo, an analyst at CITIC Securities, said: "The concentration of the domestic auto industry has an increasing trend. If the company's strength is large enough, it may expand."
Associated expansion is also risky. Yunnei Power had attempted to use the entire industry chain. Yunnei Power had attempted to enter the downstream vehicle industry through the acquisition of vehicle companies. However, after the acquisition of Yunan in Dazhou, Sichuan Province in 2004, the business has not improved and the light load in the first half of 2010 The truck industry has sales of more than 30 million yuan and gross profit margin of -1.11%.
The independence of the diesel engine business has its own advantages and disadvantages. If it belongs to a specific vehicle manufacturer, it is equivalent to finding a fixed large customer, but external sales are often limited to vehicle manufacturers. Independent diesel engine companies have a lot of autonomy in sales, but they have to face fierce market competition.
In recent years, independent diesel engine manufacturers have developed very well. Taking Weichai Power as an example, many domestic heavy truck manufacturers are customers of Weichai Power, and Weichai Power has also subscribed to Foton Motor’s heavy-duty engine business through subscription of additional shares. Contribute about 80% of net profit.
Segmentation opportunities
Although the entire industry chain has become a wave, there are still opportunities in some segments. For the entire vehicle company, it is not worthwhile to produce its own engine. In the construction machinery industry, there is also an opportunity for diesel engine plants because of the small sales of a certain product. However, if an OEM invests in a diesel engine plant, it is not worthwhile to use it for its own household. If it is provided to a competitor, it will be difficult for the other party to open the market because of the taboo mentality.
This provides an opportunity for independent diesel engine plants. Weichai Power currently has an advantage in construction machinery, and Yuchai has an advantage in the passenger vehicle industry.
At present, there is no domestic passenger car or construction machinery company that has proposed to enter the diesel engine production field. Industry sources said that in addition to the reasons for the small scale of production, the profit distribution is also an important reason. “In the field of construction machinery, the chassis only accounts for half of the total vehicle cost. The technical content is more reflected in the hydraulic support and other aspects. Competitiveness. Moreover, the current high profit margin of the construction machinery industry, they do not see diesel engine in this area." Anonymous brokerage analysts said.
Some analysts believe that if the company is large enough, it may be involved in these core devices.
At present, the top companies in the construction machinery industry have expanded into related areas. In addition to the bulldozers market, Shantui also diversified into concrete machinery and road machinery. Zoomlion also expanded its tower cranes, truck cranes, and environmental sanitation machinery in addition to concrete machinery; Xugong Machinery also Diversify.
Wang Hexu, an analyst at Warburg Securities, believes that if the construction machinery industry achieves successful multi-sector expansion, the next step is likely to be involved in diesel engine production. He gave an example, Liugong quickly through the merger and acquisition of new industrial chain and expand the scale of the industry, through the control of Jiangsu Jiangyin traffic engineering machinery plant into the road machinery, through the acquisition of Shanghai Forklift Co., Ltd. to enter the forklift industry, through the acquisition of Zhen Zhen Chong Anli into the crane field .
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