Tag Archives: SAIC

China SAIC latest Business & Financial news .
Youngchinabiz by Doug Young, the Expert about China , (former Journalist and Chief editor at Reuters)

News Digest: July 24, 2014

The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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  • McDonald’s (NYSE: MCD) Sticks By Meat Supplier OSI After Yum Severs Ties (English article)
  • SAIC (Shanghai: 600104), Alibaba Partner In Internet Car Initiative (Chinese article)
  • First Foreign-Invested Hospital Approved, Obstacles Remain (Chinese article)
  • Phoenix Satellite TV (HKEx: 2008) Announces Profit Warning (HKEx announcement)
  • Lenovo (HKEx: 992) To Launch, Air Purifiers, Other Smart Devices (Chinese article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

New Beijing Clampdowns On Foreign Tech, Drugs

Foreign IT products come under scrutiny

Two news threads that started with relatively isolated moves are showing signs of becoming trends, with word that Beijing is taking new actions against overseas tech and drug firms. In the former case, media are reporting that China is preparing to roll out new security checks for all foreign IT products, in a move that looks aimed at the computing and telecoms sectors. The latter case has media reporting that investigators have visited the offices of Swiss drug giant Roche (Switzerland: ROG), which could auger more formal moves against the company for corrupt business practices. Read Full Post…

Nu Skin Falls Under Media Microscope

Nu Skin blasted by People’s Daily

It’s not too often that I agree with articles published in the People’s Daily, but for once I  have to say that a new attack by the newspaper on personal health products maker Nu Skin (NYSE: NUS) looks at least partly deserved. That said, I did find the language used to attack Nu Skin somewhat comical and exaggerated, even if it the basic ideas are probably true. I was also somewhat surprised at how big a market China has become for Nu Skin, reflecting how easily such companies can win over Chinese consumers and businesspeople who often assume that any product with a western name must be good and trustworthy. Read Full Post…

Advice To Dongfeng: Drive Away From Peugeot

Dongfeng nears Peugeot tie-up

Chinese firms’ addiction to distressed global assets was back in the spotlight last week with word that car maker Dongfeng Motor (HKEx: 489) is nearing a deal to purchase struggling French automaker Peugeot (Paris: PEUP). This pursuit of a global brand is consistent with Beijing’s call for Chinese firms to go global, and would certainly allow Dongfeng to quickly expand onto the world stage. Read Full Post…

Hesitant SAIC Eyes SE Asia 踌躇的上汽关注东南亚市场

Just a month after I accused SAIC (Shanghai: 600104) of having a weak stomach for overseas expansion, we’re getting word that China’s leading automaker may be preparing to move into Southeast Asia with its longtime US partner General Motors (NYSE: GM). If the reports are correct, this would look like a smart move for SAIC, taking it into a relatively straightforward region similar to its own home market in partnership with a globally experienced major partner like GM.

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News Digest: December 6 报摘: 2012年12月6日

The following press releases and media reports about Chinese companies were carried on December 6. To view a full article or story, click on the link next to the headline.
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  • GM (NYSE: GM) Hints At Joining With China’s SAIC (Shanghai: 600104) In SE Asia (English article)
  • China Mobile (HKEx: 941; NYSE: CHL) to Release Self-Branded Handsets (English article)
  • Yahoo’s (Nasdaq: YHOO) Jacqueline Reses Joins Alibaba Group Board (Businesswire)
  • Starbucks (Nasdaq: SBUX) Back On Expansion Path In Americas, China (English article)
  • Thai Group Buys $9.4 Bln Ping An (HKEx: 2318) Stake From HSBC (HKEx: 5) (English article)

SAIC’s Weak Overseas Stomach 上汽对海外投资风险承受能力弱

Domestic auto giant SAIC (Shanghai: 600104) may be the king of China’s car market, but it clearly has a sensitive stomach for overseas activity as reflected by its recent decision to largely abandon its wobbly India joint venture with longtime partner General Motors (NYSE: GM). I have to admit that I’m a bit mixed on my feelings about this latest news, which has seen Shanghai-based SAIC sell most of its stake in the 50-50 India venture back to GM just 3 years after the venture’s formation.

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Haier Breaks China Pattern of Sickly M&A 海尔打破中国并购旧模式

I have to admit that my first reaction was one of skepticism when I read earlier this week that Chinese home appliance giant Haier (HKEx: 1169) was weighing a bid for New Zealand’s Fisher & Paykel (NZ: FPA), as the bid appeared to follow a familiar and largely unsuccessful pattern for Chinese companies making overseas M&A. But a closer inspection of the financials reveals that after previously falling on hard time, F&P may actually be a company on an upward trajectory, giving this potential acquisition a much better chance of success.

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China Powers Up Aviation Drive With Hawker Bid 中国航空业迈向国际化

The recent expansion by Chinese aviation firms into international airspace is powering ahead with word of 2 more global deals, including a new aircraft parts joint venture involving Air China (HKEx: 753; Shanghai: 601111) and an even more intriguing bid for bankrupt business jet maker Hawker Beechcraft by a Chinese buyer. Both of these deals are just the latest in a series of outward moves by China’s aviation industry, a largely inwardly looking group which I suspect has come under recent pressure from Beijing to become more global.

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Dongfeng Joins China Own-Brand March 东风追逐中国民族汽车品牌复兴大潮

China’s domestic car makers are continuing their drive to develop their own brands in their search for bigger profits outside their foreign joint ventures, with Dongfeng Motor (HKEx: 489) the latest to join that march as it prepares to revive its mothballed namesake brand. But success for these new initiatives is far from guaranteed, and Dongfeng and the many other Chinese automakers to announce similar own-brand plans in recent months certainly aren’t preparing to abandon their lucrative foreign joint ventures anytime soon. Dongfeng itself recently launched another new brand, called Venucia, with longtime Japanese partner Nissan (Tokyo: 7201) (previous post); and more recently news has emerged that it is in talks for yet another foreign joint venture with France’s Renault (Paris: RENA). (previous post) According to a Chinese media report, Dongfeng is currently working on a plan to revive its namesake brand using technology from France’s Peugeot (Paris: UG), and could show the first models at the Shanghai Auto Show next spring. (English article) China auto buffs may want to have a look at this report, as it contains a detailed history of the Dongfeng name, which was China’s first self-developed brand with its launch in the late 1950s. But production of the car was short-lived, and the brand has been absent from Chinese roads now for more than half a century. Dongfeng’s plan follows a range of similar ones by other Chinese automakers, all of which also have successful joint ventures with major foreign automakers. News recently emerged that SAIC (Shanghai: 600104), China’s largest automaker which has joint ventures with GM (NYSE: GM) and Volkswagen (Frankfurt: VOWG), was planning to revive its Shanghai brand of cars. (previous post) At the same time, FAW Auto has been working on a 1.8 billion yuan plan to revive Hongqi, or Red Flag, a brand that was once synonymous with luxury cars in China but ceased production in the 1980s. Meantime, Beijing-based BAIC, which has a joint venture with Mercedes, is also rolling out its own brand cars based on technology it purchased from Swedish car maker Saab. Many of these plans have the common trait of using older foreign technology as their basis, which is probably a smart move as all of these Chinese companies are relatively inexperienced at developing their own new models. Still, launching a new brand is far from easy, as it requires new infrastructure to service such brands and also marketing campaigns to raise public awareness. What’s more, the market is already quite crowded and showing signs of slowing down. The Hongqi, Shanghai and now Dongfeng initiatives all look smart from a marketing perspective, as all will draw on well-known historical brands that should quickly grab attention from Chinese consumers. At the end of the day, I would expect some of these brands to succeed, with perhaps the Shanghai and Hongqi brands having the best chance for gaining some traction with domestic car buyers. The ones that fare worse will end up costing their developers big losses, and could easily see some of these older brands returned to the historical junk pile once again.

Bottom line: Dongfeng’s revival of its namesake brand is part of a trend by Chinese automakers to develop their own brands, with about half of these new initiatives likely to succeed.

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Nissan, VW Jump on China Brand Bandwagon 日产和大众进军中国低端车市场

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Nissan, VW Jump on China Brand Bandwagon 日产和大众进军中国低端车市场

A growing number of big foreign car makers are developing new low-end brands and models just for the China market, with Nissan (Tokyo: 7201) and Volkswagen (Frankfurt: VOWG) the latest to make moves in that direction. These new initiatives come as the foreign giants look to keep their growth alive in China’s slowing auto market, posing a major new challenge to domestic nameplates like Geely (HKEx: 175) and Chery, which have been rapidly losing share to their better funded, more experienced foreign rivals. These moves also follow on the phenomenal success of General Motors’ (NYSE: GM) 2010 launch of the Chevy Sail, its first low-end model developed just for China which has posted growth rates in the 50 percent range for much of the last year and is now one of the nation’s best-selling models. Let’s look at the latest news first, starting with Nissan, which last week formally began production of its Venucia line of cars developed just for the China market in its partnership with Dongfeng Motors (HKEx: 489). (English article) Nissan first announced Venucia just over a year ago, so the brand itself isn’t exactly news. But all eyes will be watching to see how quickly sales grow for the first model, the D50, which will be priced starting at around 70,000 yuan, or about $11,000, which is roughly comparable to the Sail’s starting price of about 60,000 yuan. Meantime, German media are quoting a Volkswagen executive saying the company is planning to launch its own new brand to make low-priced, high quality cars for developing markets, starting at an even lower 5,000 euros per car, or about $6,600. (English article) The reports indicate that China, already one of VW’s top global markets, would be one of the primary markets for this new initiative, and I would expect the German car maker could launch the initiative with its main Chinese partner, SAIC (Shanghai: 600104). These new initiatives follow similar ones by Honda (Tokyo: 7267), which last year launched a new brand called Everus with Chinese partner Guangzhou Auto; and GM’s launching of its own made-in-China brand, Baojun, with its China partners also last year. All of these big foreign names are hoping to capitalize on China’s auto market, now the world’s largest, to develop these new brands that will combine good quality with low prices, and then export those models and technology to other developing markets like Brazil and Russia. I would expect to see the handful of other major global automakers who haven’t joined the trend yet, including Ford (NYSE: F) and Toyoto (Tokyo: 7203), hop on this new bandwagon soon, turning up the pressure on what looks like an important new growth area for everyone. Of course that will mean a potentially difficult road ahead for Geely, Chery and other domestic names like BYD (HKEx: 1211), that have largely dominated the lower end of China’s car market to date while the foreign names focused on the higher end. Look for that competition to get hotter as these new brands start rolling out more new models, potentially sending many of the Chinese brands into the red.

Bottom line: Nissan and Volkswagen’s new forays into the low-end car space are part of a broader move by foreign automakers, putting growing pressure on domestic nameplates.

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