In 2021, the wave of car manufacturing started again. This time, cross-border car manufacturing has become a hot topic in the city. Previously, Niu Electric Vehicle founder Li Yinan came with Niu Chuang brand, and later, Tuanche CEO Wen Wei praised Haikou for "can make cars with US$50 million."
It can be foreseen that with the rise of car manufacturing again, there will definitely be more ambitious people in the trillion-dollar new energy market that want to enter the market and get a share. Look, Luxshare Precision , which is the same as Foxconn supply chain, has also begun to build cars. On the evening of February 11, Luxshare Precision issued an announcement stating that its controlling shareholder Luxshare Co., Ltd. purchased 9.88% stake in , 7.87% stake in Chery Holdings and 6.24% stake in Chery New Energy held by Qingdao Wudaokou for 10.054 billion yuan.
After Luxshare's acquisition, Qingdao Wudaokou shares, which previously held 46.77% of Chery Holdings' shares, decreased to 26.89%, which was lower than the 27.68% shareholding ratio of Wuhu Construction Investment Co., Ltd. (whomally owned by Wuhu State-owned Assets Supervision and Administration Commission), making it the second largest shareholder, while Luxshare Precision is the fourth shareholder.
It is worth mentioning that based on this agreement, Luxshare Precision will jointly form a joint venture with Chery New Energy, specializing in the research and development and manufacturing of vehicle for new energy vehicles. Among them, Luxshare Precision plans to subscribe to 500 million yuan to hold 30% of the registered capital of the cooperative subsidiary, while Chery New Energy will subscribe to 1.167 billion yuan and hold 70% of the equity of the registered capital.
Not only that, Luxshare Precision Industry (Wuhu) Co., Ltd. was officially established before, and its legal representative is Li Jing, with a registered capital of 20 million yuan. The equity penetration diagram shows that the company is 100% controlled by Xuancheng Luxun Precision Industrial Co., Ltd., and its business scope includes automobile parts and accessories manufacturing, automobile parts wholesale, electronic product sales, etc. There is no doubt that with the investment in Chery Automobile and the establishment of a parts company, Luxshare Precision has officially entered the car manufacturing track.
I believe that many people have unexpectedly spent tens of billions to enter the car manufacturing industry this time. However, judging from Luxshare Precision's actions, Luxshare Precision is serious about building cars this time, and directly invested in Chery new energy vehicle . Compared with starting car manufacturing from scratch, Luxshare Precision has taken a shortcut. Why did Luxshare Precision, which had always been based on OEM, enter the car manufacturing industry so high-profile, instead of seeking OEM like Foxconn? Please tell me about this question in detail. Financial report shows that Luxshare Precision's revenue in the first three quarters of 2021 reached 81 billion yuan, but its profit source mainly relies on Apple's headphones and watches and other businesses. Due to its deep binding with Apple, Luxshare Precision has not had high risk resistance. In 2020, as Luxshare Precision's largest customer, Apple's orders accounted for 69% of Luxshare Precision's revenue, which is higher than both Goertek's and Lens Technology's , which are also Apple's leading suppliers. Not only that, Luxshare Precision has even invested in research and development and equipment updates in order to meet Apple's production requirements.Data shows that since its listing, in addition to raising 9.6 billion yuan of funds through bond issuance and targeted additional issuance, its loan scale has also become larger and larger, which is understood. As of the third quarter of 2021, Luxshare Precision currently has interest-bearing liabilities of up to 16.9 billion yuan in one year, and the company's debt-to-asset ratio is close to 60%, about 40% higher than when it first entered Apple's supply chain. It can be said that once the Apple supply chain is removed, the good situation accumulated by Luxshare Precision over the years will be ruined. It can be said that whether in order to balance risks or find more profit points, Luxshare Precision is very necessary to gradually break away from Apple's constraints, and car manufacturing is undoubtedly the hottest and best growth point at present. In the past 2021, the national automobile manufacturing industry's operating income was 8670.62 billion yuan, a year-on-year increase of 6.7%, and the total profit was 530.57 billion yuan, a year-on-year increase of 1.9%. In addition, both automobile production and sales exceeded 26 million vehicles in 2021, ending the three consecutive years of decline since 2018. In terms of new energy, in the past 2021, my country's new energy market also ushered in a big explosion. According to data released by the China Passenger Car Association, the total wholesale volume of new energy passenger cars in 2021 reached 3.312 million, an increase of 181.0% year-on-year; while the retail volume reached 2.989 million, an increase of 169.1% year-on-year. In terms of penetration rate , the domestic retail penetration rate of new energy vehicles reached 14.8% in 2021, a significant increase from the 5.8% penetration rate in 2020. It can be said that in the context of the full explosion of the new energy market, Luxshare Precision has entered the car manufacturing field by investing in , Chery , and has never had the idea of taking the opportunity to get a share of the pie. Not only that, Luxshare Precision Industry (Wuhu) Co., Ltd. was officially established before, and its legal representative was Li Jing, with a registered capital of 20 million yuan. The equity penetration diagram shows that the company is 100% controlled by Xuancheng Luxun Precision Industrial Co., Ltd., and its business scope includes automobile parts and accessories manufacturing, automobile parts wholesale, electronic product sales, etc. There is no doubt that after investing in Chery Automobile and establishing a parts company, Luxshare Precision officially entered the car manufacturing track. Why do you say that? As early as the 2020 Hon Hai Technology Day event, Foxconn officially announced its entry into the electric vehicle field, and even released the MIH EV software and hardware open platform that is crucial to car manufacturing. According to the introduction, the platform can span multiple levels, support front-wheel drive, rear-wheel drive and four-wheel drive models, and can provide a rich powertrain. It is worth mentioning that the MIH open platform is also defined as an open platform for electric vehicle software and hardware, which will allow automakers to design large parts of electric vehicles on the platform. Previously, Foxconn said that many auto manufacturers have negotiated cooperation and about 3 million cars will be produced using its platform. However, two years have passed, and Foxconn's new cars have not been seen, which shows that Foxconn is still shaking about whether to build cars in person in the end. In addition, with Chery New Energy's own state, it is also very necessary to introduce wealthy and technical partners like Luxshare Precision. As we all know, building cars requires money, especially building new energy vehicles. Chery New Energy, founded in 2010, has only carried out three rounds of financing so far. Although the amount has not been disclosed publicly, judging from the current operating conditions it has shown, it should not be too much. Moreover, its latest financing occurred in January 2019, which means that Chery New Energy has not received new financing for almost three years. Chery New Energy, which is short of money, has also focused on its launch. As early as 2016, Chery New Energy planned to "backed" conch profiles to go public, but at that time, Chery New Energy finally missed the opportunity to enter the capital market because it did not obtain the qualification for new energy vehicle production. In 2019, Chery Automobile executives also stated that Chery New Energy will land on Science and Technology Innovation Board by the end of that year, but the plan has no further information. In fact, car companies such as WM Motor, Leapmotor , Geely , etc. have all failed to enter the Science and Technology Innovation Board due to insufficient technological content, and it is not surprising that Chery New Energy failed to log in to the Science and Technology Innovation Board. Not only that, although Chery New Energy saw Wuling Hongguang Mini EV continue to sell well last year, it couldn't help but launch QQ ice cream. The current sales are also relatively objective, but judging from the fact that Wuling macro Mini EV does not make money, there may be similar situations in the QQ ice cream launched by Chery New Energy. In general, although Chery intends to develop towards high-end new energy, Chery New Energy, which has difficulty in financing, is currently in a state of being a clever man who can’t cook without rice. It can be said that the emergence of Luxshare Precision is like a rainfall from the sky for Chery, which is both lacking in money and technology. It is timely, and the injection of nearly 10 billion yuan of funds is also a timely help for Chery, which is currently in short supply. There is no doubt that Chery New Energy, which still has shortcomings in smart cockpits and autonomous driving, needs the assistance of Luxshare Precision. Although Luxshare Precision has not developed much in these aspects, with the rise of smart cars, electric vehicles are even known as "four-wheeled mobile phones". As an important role in the "fruit chain", Luxshare Precision's OEM for Apple over the years and related R&D experience can be learned from it. At present, after Luxshare Precision enters Chery, it will provide Chery with Internet thinking in the future, empowering its newly launched new cars, while Chery New Energy is responsible for research and development and production, one is the outside and the other is the inside. As for when the first new car they cooperated with will be launched on the market, it depends on whether Chery New Energy can quickly integrate Luxshare Precision's related technologies. Summary: In an era when cross-border car manufacturing is no longer a news, Luxshare Precision’s investment in Chery New Energy’s entry into the car manufacturing field is somewhat unexpected, but it will not cause heated discussion. However, judging from Luxshare Precision’s actions that cost 10 billion yuan, Luxshare Precision’s car manufacturing is the real thing this time. Why does Luxshare Precision build cars?
I think the reason why Luxshare Precision has invested in Chery New Energy to build cars is still closely related to its own status. Although they are Apple's suppliers like Foxconn, their strengths are incomparable. Due to factors such as the epidemic, limited power consumption, supply chain chip shortage, and rising raw material prices, Luxshare Precision's current operating conditions are not good.
You should know that this is not an alarmist statement. For example, the previously famous representative fruit chain company Ofeiguang was removed from the Apple industry chain in March 2021, not only did its stock price plummet, but its revenue also fell directly from previous profits to losses. According to the 2021 annual performance report released by Ofilm, the net loss in 2021 is estimated to be between 1.9 billion and 2.7 billion yuan. There is no doubt that from the perspective of balanced operations, Luxshare Precision is very necessary to find other new revenue growth points. Why choose Chery?
I believe that with Foxconn's beauties and jade in the forefront, it should not be too surprising, but choosing Chery was beyond the expectations of many people. In fact, in my opinion, the cooperation between Luxshare Precision and Chery is more like a support between brothers and brothers.
Although some media revealed that Chery has been looking for a partner in the field of technology manufacturing since last year, hoping to seek help in software development and solve the problem of overcapacity. Even on the list of cooperation with it, Luxshare Precision's rival Foxconn, judging from Foxconn's car manufacturing direction, it did not think about going from behind the scenes to the forefront, but was still stubborn about its old business - OEM.
, while Luxshare Precision is different. It is more urgent to enter the car manufacturing market than Foxconn. Moreover, if we still follow the OEM route, whether it is time, capital or technology, Luxshare Precision does not have enough conditions. It can be said that compared to Foxconn, Luxshare Precision, which is weaker in strength, is more suitable for Chery. The relationship between the two can be seen from the shareholding ratio of the joint venture this time.
I believe many people are curious about the future direction of Chery New Energy and Luxshare Precision jointly building cars. Although the new cars they cooperate with have not been exposed at present, judging from the current public information between the two parties, it is still possible to explore their future direction of car manufacturing.
In addition, unlike Foxconn who has been seeking OEM to manufacture cars, this time Luxshare Precision Car Manufacturing obviously wants to make a gamble and have the idea of becoming successful if you fail. As for what results Luxshare Precision can achieve in the end this time, it depends on whether Chery New Energy is powerful this time. After all, Chery is not short of slutty operations.
