Chinese Economics Thread

[SanWenYu]

Chinese government plans to consolidate SOE car makers.

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今天（29日），国务院国资委相关负责人在中国电动汽车百人会论坛上表示，下一步将对整车央企进行战略性重组，提高产业集中度。

国务院国资委表示，战略性重组的目标是集中央企的研发制造和市场等优势资源，打造具有全球竞争力、拥有自主核心技术，引领智能网联变革的世界一流汽车集团。此外，还将鼓励央企加大其他合作。

国务院国资委副主任 苟坪：鼓励支持汽车央企与其他企业深化各种形式的合作，加快提升核心竞争力、市场占有率。统筹推动汽车央企融入全球创新网络，准确把握海外市场需求，有序开展海外布局。

同时，国务院国资委还启动实施了央企产业焕新，新能源汽车布局发展行动方案，以整车产品为突破口和核心载体，发力布局动力电池、汽车芯片、智能驾驶体系等。

国务院国资委副主任 苟坪：在投资布局方面，2024年三大汽车央企新能源汽车直接投资同比增长35%。在投资总额中占比超70%，“三电”的关键资源已实现自主掌控，近地生产。自主品牌销量达175万辆，同比增长超80%。

 

[Neurosmith]

Chinese government plans to consolidate SOE car makers.

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Today (29th), a relevant person in charge of the State-owned Assets Supervision and Administration Commission of the State Council stated at the China Electric Vehicle 100 Forum that the next step will be to carry out a strategic reorganization of central enterprises producing complete vehicles to increase industry concentration.

The State-owned Assets Supervision and Administration Commission of the State Council stated that the goal of the strategic restructuring is to integrate the R&D, manufacturing and market resources of central enterprises to create a world-class automobile group with global competitiveness, independent core technologies, and leading the intelligent network transformation. In addition, central enterprises will be encouraged to increase other cooperation.

Gou Ping, deputy director of the State-owned Assets Supervision and Administration Commission of the State Council: We encourage and support central auto enterprises to deepen various forms of cooperation with other enterprises, accelerate the improvement of core competitiveness and market share. We will coordinate and promote central auto enterprises to integrate into the global innovation network, accurately grasp the needs of overseas markets, and carry out overseas layout in an orderly manner.

At the same time, the State-owned Assets Supervision and Administration Commission of the State Council has also launched and implemented the action plan for the renewal of central enterprises' industries and the layout and development of new energy vehicles. Taking complete vehicle products as the breakthrough point and core carrier, it will focus on the layout of power batteries, automotive chips, and intelligent driving systems.

Gou Ping, deputy director of the State-owned Assets Supervision and Administration Commission of the State Council: In terms of investment layout, the direct investment of the three major central automobile enterprises in new energy vehicles will increase by 35% year-on-year in 2024. It accounts for more than 70% of the total investment. The key resources of the "three electrics" have been independently controlled and produced locally. The sales volume of independent brands reached 1.75 million vehicles, an increase of more than 80% year-on-year.

This seems to only happen when individual car makers aren't doing well.

 

[ZeEa5KPul]

This seems to only happen when individual car makers aren't doing well.

Yes, companies consolidate when they aren't doing well... and?

 

[Neurosmith]

Yes, companies consolidate when they aren't doing well... and?

This could be a sign that long term demand for Chinese cars is waning or an indicator of overall consumer sluggishness.

Wonder what's causing this and which companies will be absorbed.

 

[Maikeru]

This could be a sign that long term demand for Chinese cars is waning or an indicator of overall consumer sluggishness.

Wonder what's causing this and which companies will be absorbed.

I don't know if you've heard about these newfangled electric cars, but apparently they're All the Rage in China. Maybe some of the gas car makers are suffering? Just a thought.

 

[Neurosmith]

I don't know if you've heard about these newfangled electric cars, but apparently they're All the Rage in China. Maybe some of the gas car makers are suffering? Just a thought.

This was mentioned at an EV forum, though. Or perhaps they were talking about the reallocation of investment into EV sectors.

 

[Blitzo]

This was mentioned at an EV forum, though. Or perhaps they were talking about the reallocation of investment into EV sectors.

It might be useful to read more widely, and to review the statistics of the PRC vehicle market, as well as consider the credibility and understanding of people whose opinions you have read in "an EV forum".

To clarify, the specific thing I am referring to is your idea that "consolidation of SOE car firms" = "long term demand for Chinese cars is waning or an indicator of overall consumer sluggishness"

However, it has been obvious for a long time that Chinese SOE car firms are not leading the charge or the most successful car/EV firms in China, therefore it is entirely expected for SOE firms to consolidate to be more competitive because the individual SOE firms are not doing well.
However that has no bearing on the overall health of the current EV market, because the PRC EV market and car market overall is not dominated by SOE firms but by private companies.

 

[gk1713]

This was mentioned at an EV forum, though. Or perhaps they were talking about the reallocation of investment into EV sectors.

What I know is that, the Changan (civilian car maker) of China South Industries Group (sibling of Norinco) will merge into Dongfeng.
The combined sales of the two entities reached 5.2 million. Upon completion of the restructuring, the new entity is expected to become China's largest and the world's fifth-largest automaker.
The purpose of this move is more akin to splitting and restructuring the military and civilian operations of SOE giants.

 

[drowingfish]

This could be a sign that long term demand for Chinese cars is waning or an indicator of overall consumer sluggishness.

Wonder what's causing this and which companies will be absorbed.

lol no, there is a major shift to electric cars, so of course ICE car manufacturers would suffer if they cant keep up. It would be more concerning if those relics are kept afloat like american big three.

 

[Neurosmith]

It might be useful to read more widely, and to review the statistics of the PRC vehicle market, as well as consider the credibility and understanding of people whose opinions you have read in "an EV forum".

To clarify, the specific thing I am referring to is your idea that "consolidation of SOE car firms" = "long term demand for Chinese cars is waning or an indicator of overall consumer sluggishness"

However, it has been obvious for a long time that Chinese SOE car firms are not leading the charge or the most successful car/EV firms in China, therefore it is entirely expected for SOE firms to consolidate to be more competitive because the individual SOE firms are not doing well.
However that has no bearing on the overall health of the current EV market, because the PRC EV market and car market overall is not dominated by SOE firms but by private companies.

By "EV forum" I meant the China Electric Vehicle 100 Forum wherein the plan was first announced. But you're right, the consolidation applies to state-owned longstanding companies that still mostly market ICE vehicles. The "EV forum" part was confusing.

Regardless of competition from private firms, the shift to EVs would have to happen sooner or later if the automakers don't want to end up on the chopping block once China bans ICEs.