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GAC Ean takes over the established car company!

2024-04-13 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)03/21 Report--

On March 20, Guangzhou Automobile Group Co., Ltd. (hereinafter referred to as "GAC GROUP") issued an announcement, agreed to transfer the 100% equity agreement of Hunan Zhihong Automobile Management Co., Ltd. (hereinafter referred to as "Zhixian") to Guangzhou Automobile Ean New Energy Automobile Co., Ltd. (hereinafter referred to as "Guangqi Eian"), the transfer price is determined at 191 million yuan based on the evaluation results of the relevant asset evaluation report. At the same time, 1.858 billion yuan was injected into Zhiheng, which was raised by GAC Ean itself.

Zhiheng Company, formerly known as Guangzhou Auto-Mitsubishi Automobile Co., Ltd., was established by GAC GROUP, Mitsubishi Industrial Association and Mitsubishi Commercial Association in May 2012 at 5:3:2 with a cooperative life of 30 years. After confirming a "romantic relationship" with GAC GROUP, GAC-Mitsubishi successively launched dazzling ASX, Pajero and Pajero Jinchang models, but sales were mediocre, and sales did not improve until the introduction of the third-generation Outlander into China in 2016. In 2018, GAC-Mitsubishi sold 144000 vehicles a year, the highest since Mitsubishi entered China.

While GAC-Mitsubishi creates a sales peak, there is also a hidden crisis. GAC-Mitsubishi relies heavily on Olander models, accounting for 73% of GAC-Mitsubishi's total sales in 2018. In order to reduce its dependence on a single model, GAC-Mitsubishi launched the Yige model in November 2018 and positioned it as Mitsubishi's first global strategic model in the new century. At the same time, GAC-Mitsubishi is increasingly dependent on Olander models, up to 90%, while the iterative mistakes of Olander and the decline of Mitsubishi brand influence have led to a declining sense of existence of Mitsubishi-branded cars in the Chinese market. In 2022, GAC-Mitsubishi sold 33600 vehicles annually, ranking "at the bottom" in GAC GROUP, becoming the joint venture brand with the biggest decline. In 2023, there were many rumors in the market that a certain Japanese joint venture brand would be delisted, and GAC-Mitsubishi dismissed the rumors many times, but finally failed to escape the reshuffle of the market.

GAC GROUP transferred the equity of Zhixian to GAC Ean, in fact, it was expected. On October 24, 2023, GAC GROUP announced that GAC GROUP will transfer 30% and 20% of GAC-Mitsubishi held by Mitsubishi Automotive Industry Co., Ltd. And Mitsubishi Commercial Co., Ltd. at a consideration of 1 yuan. The local production of Mitsubishi-branded cars in China will be terminated, and GAC-Mitsubishi will become a wholly-owned subsidiary of GAC GROUP. GAC Eian will use GAC-Mitsubishi Hunan plant to increase production and capacity. On February 27, 2024, GAC-Mitsubishi completed the restructuring, and the name of the company was changed to Hunan Zhiheng Automobile Management Co., Ltd., while Mitsubishi Automotive Industry Co., Ltd. and Mitsubishi Commercial Co., Ltd. withdrew from the ranks of shareholders and was wholly owned by GAC GROUP.

GAC GROUP said that on the one hand, we can maximize the use of GAC-Mitsubishi core assets, solve the capacity bottleneck of GAC EAN, and save time and investment costs for building new plants. On the other hand, it can also avoid the dissolution and liquidation of GAC-Mitsubishi, protect the rights and interests of consumers and assist employees in re-employment.

In 2023, GAC Security has annual wholesale sales of 480000 vehicles, an increase of 77.02% over the same period last year. It has two factories in China, both located in Panyu District, Guangzhou. One was built in 2019 and the other took over GAC Fick's Guangzhou plant with an annual production capacity of 400000 vehicles. GAC-Mitsubishi plant in Changsha, Hunan Province, will become the third plant of GAC Eian, and plans to achieve mass production in June, after which GAC Eian will have an annual production capacity of 600000 vehicles.

According to public information, GAC Ean will challenge the annual sales target of 800000 vehicles in 2024, and production and sales will reach 1 million vehicles by 2025. While setting ambitious goals, how to solve the problem of production capacity is also a big problem. Data show that Ean new energy sales from January to February in 2024 were 21011 vehicles, down 45.13% from the same period last year.

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