[Truck Home, Original] Recently, the Group resumed negotiations with CNH Industrial on the whereabouts of commercial vehicles (hereinafter referred to as IVECO). FAW Group will acquire all the business of IVECO commercial vehicles under CNH Industrial of CNH Industrial, including trucks, buses, and power shares.
As a leader in domestic trucks, why would FAW Group acquire a European truck company? What can it get by acquiring Iveco? What does FAW want?
From the current volume of the two, IVECO is really better than FAW. In 2020, the output was nearly 510,000, an increase of more than 30% year-on-year; the overall sales volume was nearly 490,000, an increase of nearly 40% year-on-year. Among them, the sales volume was nearly 400,000, an increase of nearly 40% year-on-year; the sales volume was nearly 100,000, an increase of more than 40% year-on-year, and the market performance was good.
On the other hand, IVECO has been withdrawing from the Chinese market one after another since the domestic implementation of the National V emission standard. In the European market, IVECO has also been reduced to a second-rate brand. Although it is expensive for the seven sisters of European heavy trucks, whether it is new car technology or market recognition, IVECO is inferior to,,, and MAN.
According to online news, the initial price given by FAW was 3 billion euros (about 23.80 billion yuan), but this price was lower than Iveco’s expectations, thus shelving negotiations.
According to people familiar with the matter, FAW Group resumed negotiations to acquire Iveco, and its bid has reached the valuation of 3.50 billion euros (about 27.80 billion yuan). Judging from the price given, FAW Group is bound to acquire Iveco, which also shows FAW Group’s determination to acquire Iveco.
First of all, we need to understand that the acquisition is nothing more than three purposes, technology, system, and channels. From a technical point of view, FAW Group really does not necessarily look up to Iveco. At present, FAW Group has its own,,,, cab, etc., and FAW Group is also doing some basic research, so from a technical point of view, FAW Group is really ahead of Iveco.
If there is anything to learn from in terms of technology, it may be Fiat Power
I guess this is also one of the reasons why FAW Group bought shares in Fiat Power. Another important reason is that Iveco imported heavy trucks have also been sold in China for a period of time, and after the acquisition, they can also learn from some appearance and some chassis experience. At first glance, FAW Group seems to have only Iveco to choose, after all, Mercedes-Benz, Scania, MAN, Volvo are unlikely.
Besides the system, FAW Group covers heavy, light, bus and other fields, and the development system is also becoming mature, so the system seems to be able to learn from and use it. However, it is worth noting that IVECO is in a leading position in the light passenger industry. If the acquisition is successful, FAW Jiefang will also take advantage of the opportunity to enrich its light passenger products and make its light passenger products reach a new height.
Finally, the channel. When FAW Group wanted to acquire Iveco, it was the time when FAW Group expanded its overseas channels. As we all know, in terms of export share, FAW Group’s performance has not been very outstanding, the domestic market is booming, but the overseas market is not satisfactory. For FAW Group, which has the title of "the eldest son of the country", expanding overseas channels is a necessary action.
So from this point of view, the acquisition of IVECO logically established its own overseas channels, and it is the channel of the European high-end market, which should be the most important reason why FAW Group took a fancy to IVECO. For FAW Group, with 3.50 billion euros (about RMB 27.80 billion) can bring a European commercial vehicle brand into its arms, and also get overseas channels, such a business is completely worthwhile.
In addition, it is worth noting that the domestic joint venture between IVECO and Fiat Power will inevitably become a shareholder of the joint venture if FAW Group is successfully acquired. In this regard, Commercial Vehicle Co., Ltd. and SAIC Fiat Hongyan Powertrain Co., Ltd. want to restructure.
On December 22, 2020, the shares issued a suspension notice on the planning of major asset restructuring. The company plans to purchase all or part of the shares of SAIC Iveco Commercial Vehicle Investment Co., Ltd., SAIC Iveco Hongyan Commercial Vehicle Co., Ltd., and SAIC Fiat Hongyan Powertrain Co., Ltd. by issuing shares and paying cash, and at the same time, raise supporting funds.
From the perspective of Shanghai Diesel’s move, it is to acquire the shareholdings of SAIC Iveco Commercial Vehicle Investment Co., Ltd., SAIC Iveco Hongyan Commercial Vehicle Co., Ltd., and SAIC Fiat Hongyan Powertrain Co., Ltd., through reorganization, to turn these three companies into SAIC’s own wholly-owned companies, get rid of the relationship with Iveco, and draw a clear line before the FAW Group’s successful acquisition.
● postscript
FAW Group’s acquisition of IVECO, for FAW Group, not only can gain some technical experience, but more importantly, can expand its overseas channels and light passenger business. At the same time 3.50 billion euros (about RMB 27.80 billion), for FAW Group’s 1 trillion credit is completely sprinkling water. (Text/Li Guopan, Photo/Truck Home)
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