Suzuki and Subaru,which is likely SAIC

　　In recent days it is said that Suzuki, Volkswagen and SAIC plans to establish a joint venture together, which will be based on the original Shanghai Volkswagen. Since March 2010 people have been talking about the above rumor and at that time Suzuki moved its China headquarter to Shanghai from Beijing.

　　If wherever headquarters to be located, a joint venture will be established there, so Ford is going to establish a joint venture with SAIC? Toyota, Nissan and Mazda will all build joint ventures with SAIC, which is lack of evidence obviously. What's more, shareholding structure of Shanghai Volkswagen is 50 to 50, so whose share will Suzuki take? In accordance with domestic joint venture principle, it can only take share from Volkswagen. Scale of Shanghai Volkswagen is very vast, so just 5% of stake means a large amount of fund.

　　At present, registered capital of Shanghai Volkswagen is 10 billion yuan, and total asset of it is 36 billion yuan. As a result, Suzuki should spend 2 billion yuan in buying share of Shanghai Volkswagen, or it is meaningless.

　　Moreover, a tripartite joint venture established by three companies also has precedent in China, however, almost each turned out to be a failure. For instance, Changan Ford Mazda has to struggle for channel, say and product line within itself. Additionally, it still has contradiction with FAW Mazda. Now Mazda is planning to develop for itself.

　　Another example is Southeast Automotive, which is owned by Fujian Motor, Zhonghua Auto and Mitsubishi. Development situation of Southeast Automotive was known to all. Another example is the Beijing Automotive DaimlerChrysler. Now Chrysler has totally pulled out from the Beijing Automotive DaimlerChrysler. Strictly speaking in the early age the Beijing Automotive DaimlerChrysler was also a joint venture with two shareholders in essence, but it didn’t achieve a good performance.

　　To conclude, a joint venture with many shareholders is not always a good thing. Many shareholders mean many can make a decision, it need a lot of discussion to reach a agreement, and have to consider a variety of interests , so at last it is likely to be a failure.

　　It is not a wise idea to transfer Shanghai Volkswagen with two sides to a joint venture with three sides. Is it possible that Suzuki establish partnership with SAIC independently? Suzuki is known as the king of small cars. In March I asked people from SAIC about building partnership with SAIC, but they said hadn't heard of it.

　　As a matter of fact, SAIC is not lack of technologies to make small cars, and it showed MG2 on Beijing International Auto Show.

　　If we see titles of the following articles, we will know it is difficult for SAIC to build a joint venture with Suzuki: New Sail into India: GM and SAIC challenge Suzuki together. Suzuki planned to increase car production in India. Zuzuki Alto will reduce price substantially to compete against Tata Nano.

　　As the brand with the largest market share in India, Suzuki actually is a competitor against company set up by SAIC and GM in India. If SAIC wants to cooperate with Suzuki, why it wants to export Wuling with great effort and want to sell new Sail in India, SAIC why not build a joint venture plant with Suzuki in India directly.

　　In terms of a joint venture between SAIC and Subaru, I think it is possible. Since exited from SSANG YONG Motor Company, introduction of SUV technologies of SAIC has been cut off. Seen from its car sales in Chinese car market, SUVs made by Subaru achieve a good performance, and introduction of Subaru enables SAIC to develop its SUV technologies. In addition, Subaru hasn't been making in China, if both sides agree to build a joint venture, it is more ideal than three sides cooperation considering that Subaru and SAIC have clear need of development. The last factor is that SAIC hasn't cooperated with Japanese auto manufacturers so far. For an auto manufacturer with a high and far ambition, after learning from Germany, America, it is high time that SAIC should learn from Japan. (Translator: Qinghua Wade)

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　　http://amuhua.blog.sohu.com/157038866.html