On October 21, at the Hefei Bus Factory on Ma'anshan Road, Hefei, Anhui Province, a dozen passenger cars with “modern†trademarks were parked on the roads of the factory. One year later, these buses will become the only products in Jianghuai that can also be linked to modern times.
Zuo Yanan, chairman of Jiangqi Group, said in an interview with the media that the 10-year technical cooperation between JAC and Hyundai will come to an end next year, and the “third way†of Jianghua Group’s self-owned vehicles has already achieved results.
Jiangqi will launch a new generation of Ruifeng Commercial Vehicle fully developed independently by the market during the year and begin to plan to expand its share in overseas markets. At the same time, at the Beijing Auto Show in November, Jiangqi will also launch some concept cars for passenger cars.
"Even even the bus cooperation, it is limited to purchasing parts from South Korea's Hyundai, and using the 'modern' trademark, but the annual output will be a few hundred." Jianghuai Auto told reporters.
With the expiration of Ruifeng's technical cooperation contract, JAC and South Korea's modern cooperation lasted for 10 years. In the future, Jianghuai Automobile will no longer be restricted when it enters overseas markets.
10 years cooperation
"Modernity is the most important source of technology for JAC. Our major products, such as passenger cars, heavy trucks, and Ruifeng commercial vehicles, are from South Korea's Hyundai," said a high-level JAC reporter.
The relationship between Jianghuai and the modern can be traced back to the middle and late 1990s. In 1998, Hefei Bus Factory signed a contract with Hyundai Motor to produce modern passenger cars through technology introduction. Soon, this passenger car that had been difficult to sell in China opened up sales in China. The sales volume was equivalent to 10% of the annual sales of Hyundai Motor Corporation. The product extension was also implemented outside the original chassis and light trucks.
The success of the bus has promoted further cooperation between the parties. In 2001, Jianghuai introduced the H-1 MPV of the Hyundai Motor Company and produced the Ruifeng Commercial Vehicle. On March 18, 2002, the first batch of Ruifeng went offline. In November 2002, it sold 3,915 vehicles throughout the year. In 2003, it sold 55,000 vehicles to the top three in the same industry. In the first quarter of 2004, the sales volume rushed onto the top spot in the industry. .
"At the beginning, Hyundai had doubts about whether this product could open the market, but the final performance of Koreans is still quite satisfactory."
In 2005, the two parties jointly developed Geerfa heavy trucks. According to the person in charge of the JAC Group, Geerfa will form an annual production capacity of 10,000 units, targeting the high-end heavy truck market of over RMB 450,000.
After the introduction of passenger cars, Ruifeng and heavy trucks, the two sides began to discuss further cooperation. Including joint ventures on car projects and commercial vehicle projects.
Dispute over control
The struggle for control over the sedan and commercial vehicle project eventually became an obstacle between the two sides and eventually led to the end of the 10-year cooperation between the two parties.
In 2003, Jianghuai’s car program was still in development and both parties also expressed “strong interest in cooperationâ€. JAC once hoped that Hyundai Motor could round its dream of the sedan. According to authoritative sources within JAC, when the Korean Hyundai sedan agreement came to China, it was originally placed in Jianghuai, but it did not want Beiqi Group’s strong involvement, which not only wiped Jianghuai and Sonata apart. However, it also caused the modern use of joint ventures in China and invisible interruption of the JAC.
The subsequent promulgation of the automobile industry policy has greatly reduced the possibility of joint ventures between modern and Jianghuai cars, because according to the new industrial policy, an international automobile company can only have two joint venture passenger vehicles in China, and Hyundai already owns. Beijing Hyundai and Dongfeng Yueda Kia.
In the commercial vehicle project that is most likely to have started and actually started, the two sides have already reached the point where they can talk about marriage, but because of GAC Group's semi-final defeat, it is at a loss.
In 2004, Jianghuai Automobile announced that the company and Hyundai Korea have reached an initial agreement, agreeing to expand the original technology cooperation between the two sides to a capital cooperation method, and establish a joint venture company with a ratio of 50% to 50%, and the total investment amount is tentative. It was 783 million U.S. dollars. The two parties will start with heavy trucks and continue to introduce and develop new products to achieve the production target of 100,000 units in 2010.
However, one year later, Hyundai Motor Co., Ltd. and GAC Group Lightning signed the "Guangzhou Modern Commercial Vehicle Project Cooperation Basic Agreement."
Although the size of the modern Jianghuai project is expected to be quite large, compared with modern Guangzhou, it is more spacious. According to the agreements reached between Guangzhou Auto and Modern, GAC Group and Hyundai Motor have established a new commercial vehicle production base in Huadu, Guangzhou. The overall scale of the project is an annual output of 200,000 commercial vehicles of various types, with a total estimated investment of 1.24 billion U.S. dollars, of which an initial investment of 430 million U.S. dollars.
"The main issue is the lack of control." The above person told reporters. The disagreement between the two parties mainly came from the issue concerning independent brands. She stated that JAC has always attached importance to independent research and development and independent brands. JAC hopes to introduce capital and technology, but it cannot lose control and thus affect independent research and development. This may be indistinguishable from Hyundai’s modern goals. Hyundai hopes to have full control over the production and sales of two key sectors, just like its other domestic joint ventures (such as Beijing Hyundai). "And on the other side of Guangzhou, it is entirely an attitude of not asking for everything, but seeking it."
Breaking up is a good thing
"The expiration of the technology contract is a good thing for Jianghuai." The above person told reporters.
The first is the expansion of the market. Due to the introduction of technology from South Korea’s modern time, the agreement had restricted the export of JAC. With the expiration of the technology contract next year, Jianghuai Automobile will no longer be restricted in entering overseas markets, and the company will plan to expand its share in overseas markets.
The second is the compression of costs. The above sources revealed that Jianghuai paid more than one million US dollars in transfer fees to South Korea’s Hyundai during the purchase of Ruifeng Technologies, and more importantly, according to the agreement, Jianghuai must pay approximately the same amount of money to South Korea’s Hyundai. RMB 1,500 or so commission.
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