In 2013, Dongfeng Group and Volvo Group formally held hands. At this time, it was just 30 years after the establishment of Beijing Jeep Automobile Co., Ltd., the first joint venture car company in China.
In the past 30 years, China's auto industry has undergone tremendous changes, and the forms of cooperation between Chinese and foreign auto companies have also entered a new phase.
Why did Dongfeng join forces with Volvo to create a new joint venture model? The author mainly makes comments from the following two points.
The ratio structure is no longer 50:50, and China is even stronger.
First of all, from the stock ratio, Dongfeng Volvo's joint venture changed its 50:50 share structure over the years.
Prior to this, the reason why most of them were 50:50 stocks was because the joint venture was generally stronger in foreign countries, and on the other hand was subject to the provisions of China’s “Automobile Industry Policyâ€: “Chinese-foreign joint venture vehicle companies, the Chinese Share ratio must not be less than 50%." Therefore, the vast majority of vehicle joint ventures established in China are 50% to 50%, such as Shanghai Volkswagen, Shanghai GM, and Guangzhou Honda.
Generally speaking, under the ratio of 50% to 50%, the joint ventures of passenger cars use foreign brands, use foreign technology, and the products they produce are basically prototype cars abroad, only in China. Make minor adaptations. The most improved place is to lengthen models, such as Audi, BMW's domestic cars are generally longer than the German origin.
Has there been any change in the joint venture of passenger vehicles in 30 years? Of course, at the time of the initial joint venture, the joint venture company introduced foreign obsolete or old models, and the prices of domestically-made cars were extremely high. They are now gradually synchronized with overseas listings, or slightly later, and the price difference is not so disparate.
Compared to the passenger car industry, the commercial vehicle industry has stronger self-reliance. Therefore, commercial vehicle companies have joint ventures. Although the vast majority of shares are 50:50, many joint venture products use Chinese trademarks. Some products use Chinese products such as Foton Daimler; others are based on the introduction of products. , make improvements.
Turning to capital output to enter a new phase of joint venture
The joint venture between Dongfeng and Volvo was said to have entered a new phase because the joint venture of this model entered the third stage of international trade, which is mainly based on capital output.
In general, international trade is divided into three phases. The first stage is the commodity export stage. This stage is the most elementary stage. It often suffers from high trade and non-trade barriers of the importing countries when the export volume reaches a certain level, and it is also affected by labor costs and transportation costs. Therefore, this The stages are often short-lived and will soon move to the second stage.
The second stage is the stage of brand and technology export. At this stage, the industry in the importing country often lacks technology and no brand. At this time, multinational companies will establish factories at the importation site, but they are affected by many national policies. At this time, the factories are often established in the form of joint venture companies. Technology and brand, enter models for production and processing. The scale of production at this stage can be very large, and the duration will be very long. For example, after 30 years of joint venture expiry, many Chinese joint ventures will renew the 30-year agreement and the production capacity can reach hundreds of thousands of vehicles a year.
The third stage is the capital output stage. In the third stage, the industrial base of the importing country has been greatly improved. The importing party has its own brand and technology, but it seeks to further improve its technological level and develop a wider market. However, it wants to retain its own brand. Have a strong voice. Therefore, input parties tend to adopt a controlling approach. The main purpose of the exporting country and the joint venture is to obtain higher than normal return on capital through the transfer of technology.
Therefore, in this new joint venture model, Dongfeng Group, which originally had its own brand, technology, and market, required the retention of its own brand in the joint venture (the joint venture’s products use the Dongfeng brand, and the Dongfeng Group pays trademark usage fees). , And has the initiative in the joint venture company, but hopes to enhance their own technology through joint ventures and open up more domestic and foreign markets.
This joint venture under the new model, where is the Volvo Group's appeal? In a joint venture with Dongfeng, Volvo seeks to obtain substantial capital investment gains by transferring advanced technology. This means that Volvo has entered the third phase of international trade through the export of capital.
Therefore, under such demands, Dongfeng Volvo has formed the equity structure of 55:45 in China and foreign countries, forming a new joint venture model for the domestic automotive industry.
New model or future trend
Now Dongfeng and Volvo are the third-phase joint ventures. This new model of joint venture will become a new direction for the future domestic automotive joint venture.
With the further improvement of the industrial level of Chinese enterprises, it is believed that more local auto companies will adopt the "Dongfeng-Volvo" cooperation model and enter the third phase of international trade directly.
It can be imagined that if Chery or Geely enters into a joint venture, it is entirely possible to adopt the model of “control + use own brand + own team research and developmentâ€. In the future, the multinational companies will enter into joint ventures with these companies by obtaining higher technology. Part of the equity.
Take Dongfeng and Volvo as joint ventures. Dongfeng holds a 55% stake and uses the Dongfeng trademark. This indicates that Sino-foreign joint ventures have shifted from importing technology and branding to introducing capital; they also indicate that foreign multinational automobile companies’ international trade with China has entered the international trade system featuring export capital. Three stages.
In other words, the joint venture between Dongfeng and Volvo is not only a milestone event in the history of Chinese automobiles, but also an important event in the global automotive development. It is not only the Chinese market but the global commercial vehicle market.
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