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Good news: Shaanxi automotive heavy truck production localised in Mexico

Views: 0     Author: Site Editor     Publish Time: 2022-08-01      Origin: Site

Mexico goes into production! Baoji 2 billion refill! Shaanxi Auto's IPO "continues" to pave the way!

Shaanxi Automotive has officially localised its heavy truck production in Mexico while Baoji has signed four projects with a total investment of $2 billion.

The first SHACMAN X3000 tractor was successfully rolled out of the assembly plant in Hidalgo, Mexico, making Shaanxi Auto's localized production in Latin America again, following Peru.

"Shaanxi auto mine dump truck" intended for North America?

Two value points are evident.

1: Dazzling brand: As the exclusive export brand of Shaanxi Auto, SHACMAN has been exported to nearly 100 countries and regions overseas, with marketing outlets covering Africa, the Middle East, Southeast Asia, Central and South America and Eastern Europe. It also has more than 300 service outlets overseas, including subsidiaries, offices, 4S shops, large maintenance centres and assembly lines.

2: Product excellence: X3000 is the representative product of Shaanxi Heavy Duty Truck Delong series, the standard configuration is "Weichai engine + Hande axle + Faster transmission", this configuration is the top in the domestic heavy truck, which means the whole vehicle has strong power and towing capacity, and is equipped with a large capacity fuel tank and comfortable cab.

The first SHACMAN X3000 tractor successfully rolled off the production line in Mexico

Before Trump started the global trade war, Mexico's automotive industry had already shown some charms.

1: Accelerated shift of US production capacity to Mexico: In 2015, 19.5% of vehicle sales in the North American market were produced by Mexican plants. By 2023, the share of Mexican-made vehicles in the North American market is expected to grow to 26.9%.

2: Mexico attaches great importance to the automotive industry: it accounts for 17% of Mexico's industrial GDP and drives 20% of foreign investment and over 30% of exports.

3: Mexico already has a global presence: the world's 6th largest producer of vehicles (3.7 million), the 5th largest market for auto parts (US$99 billion) and the 4th largest exporter (US$50 billion).

In addition, our research shows that Mexico also has a relatively complete and diversified industrial system, with light industries such as food, pharmaceuticals, textiles, tanning, clothing and paper, as well as heavy industries such as steel, chemicals and machine building, a relatively developed energy industry, and a long history of oil and mining industries.shacman truck price -Shacmansx

More recent reasons for Shaanxi Auto motor tractor layout in Mexico

1: Zero tariffs for exports to the US: This is crucial. Although Shaanxi Auto exports very well, as we introduced in "Borrowing from Poly: An African country "orders" 300 million from Shaanxi Auto", Shaanxi Auto is steadily ranked No. 2 in domestic heavy truck exports. But a strong entry into the North American market, the world's No.1, would still be epoch-making for the brand.

2: Accelerated growth in Mexico: After Mexico became the 2nd largest source of automotive imports to the US in 2014, exports to the US have grown for 8 years in a row, with $30.947 billion in exports of "trucks, buses and special vehicles", ranking 2nd.

3: Labour costs have not risen significantly: the average hourly wage for an auto worker in Mexico, including wages and benefits, is $8; while GM's auto workers in the US earn $58 per hour and VW's minimum hourly wage in the US is $38.

As the century-long shift from "full globalisation" to "limited globalisation" is taking place, it is a key concern that Chinese companies are able to achieve global presence with an international perspective, and fortunately Shaanxi Auto seems to have taken a significant step forward.

Incidentally, the state of Hidalgo, where Shaanxi Auto is assembled, is a major auto parts hub in Mexico, and in 2017, JAC (600418) invested $1.45 billion in a plant there in conjunction with a local Mexican partner.

Shaanxi auto van truck in Baoji

While away in Central America, at the project cooperation signing ceremony for the Qin Chuang Yuan (Baoji) Innovation Promotion Centre in Shaanxi Province held on 10 August, Baoji City signed a contract with Shaanxi Auto for an investment of 2 billion yuan to start four projects with an annual output value of approximately 5.65 billion yuan after completion and commissioning.

1: Complete vehicle segment, Shaanxi Auto Group frame production base construction project and Hande Axle Baoji new base figure phase II project.

2: Special vehicle segment, Shaanxi Auto commercial vehicle cab painting production line construction project.

3: Components segment, the joint venture project of VOSS quick release couplings in Germany.

It is widely known to the Shaanxi public that Shaanxi Auto Holdings has long proposed a "two-wheel drive to recreate a Shaanxi Auto" strategy due to the split in equity of Shaanxi Heavy Industries, of which the town that carries the "Shaanxi Auto Commercial" is in Baoji.

In November 2017, the Shaanxi Automobile Group's Caijiapo commercial vehicle base was officially opened in Baoji.

In November 2018, Baoji Huashan Engineering Vehicle Co., Ltd. was officially renamed to Shaanxi Auto Group Commercial Vehicle Co.

In December 2019, the full range of Shaanxi Auto's commercial vehicles was officially announced to be put into production at the Caijiapo Commercial Vehicle Base.

According to the data, by the end of 2020, Shaanxi Auto recorded annual revenue of 26.4 billion yuan and net profit of 1.43 billion yuan, of which the commercial vehicle business of Shaanxi Auto Holdings, which produces mainly the "Xuan De" series, includes heavy trucks and new energy light truck products.

The latest inspirational information is that around October 2020 Shaanxi Auto Commercial Chairman Wang Yanhong said: "Shaanxi Auto Commercial Vehicle's production and sales from January to September were 27,300 units, up 53% year-on-year. In other words, the first nine months of Shaanxi Auto Commercial Vehicles have already surpassed the full-year sales of 2019."

The more significant vision is that Shaanxi Auto's layout around Shaanxi is increasingly taking on the shape of a "whole industry chain". In our article "Shaanxi announces "strong industrial base": 9 "provincial leaders" and "23 chain masters", we clearly mentioned that the "heavy truck industry chain "The core chain owner is supposed to be Shaanxi Auto. In the article, it was also revealed that the "chain master companies are encouraged to lead the upstream and downstream into the park", with Caijiapo, the base of Shaanxi Auto, naturally being the top priority.

In our article "Over 14.5 billion? Caijiapo defends its title as "Shaanxi's No. 1 town", mentioning that the GDP of Qishan County, where Caijiapo Town is located, was 19.3 billion yuan in 2018 and Baoji City's GDP was 226.5 billion yuan in 2019. 6.5% of Baoji's GDP.

A small town accounts for 6.5% of a strong industrial city! This is the contribution of advanced manufacturing to the city.

This is the contribution of advanced manufacturing to the city. The addition of Baoji, because of the presence of "Qin Chuang Yuan" has another meaning.

As Hui Jincai, secretary of the Baoji Municipal Party Committee, said at the event, the signing of the Qin Chuang Yuan (Baoji) Innovation Promotion Centre project marked a new stage of regional synergy and university-ground-enterprise cooperation. The future goal is "to build a regional science and innovation centre, take the Qinchuang Yuan (Baoji) Innovation Promotion Centre as a grip, promote the deep integration of the industrial chain and innovation chain, and further promote the construction of a famous city of equipment manufacturing".

This means that Shaanxi Auto, which has joined the "Qin Chuang Yuan" platform, may be a considerable pursuit of innovation.

After Deutsche Bank: A-share listing becomes increasingly urgent

On 12 March we published the article "Out of the woods! Shaanxi Auto's "Deyin World" gets H-share "small roadmap"", which aroused the market's concern as everyone was looking forward to the early listing of Shaanxi Auto's main business, but no one expected the "financial-like service provider "The company's IPO in Hong Kong was quietly accelerated.

In fact, Deyin World got listed on the conditions of relying on the flourishing of Shaanxi Automobile's "after-market business". As in 2019, Shaanxi Auto's after-market segment achieved an annual operating income of 2.367 billion, up 32.4% year-on-year. According to the national medium and long-term development plan for the automotive industry, the automotive after-market value chain will reach 55% of the entire automotive value chain in five years.

Main industry of Shaanxi Automobile actually bears double expectations

1. Official urging.

In August 2019, Shaanxi Provincial Government issued the "Three-Year Action Plan for Promoting Enterprise Listing (2019-2021)", requiring state-owned assets regulators at all levels to formulate a "development quality enhancement program" for state-controlled listed companies one by one, and to establish a roadmap and timetable for listing other state-owned enterprises that are eligible to be listed one by one On March 10, 2020, Shaanxi Province was awarded the title of "Quality Improvement Program".

On March 10, 2020, Shaanxi Province also issued the "Implementation Opinions of Shaanxi Provincial People's Government on Further Improving the Quality of Listed Companies", insisting on the equal importance of expanding the increase and upgrading the stock. It is required to support high-quality enterprises to go public and raise capital, and strive to "double" the number of listed companies by the end of 2025, etc.

2. Development needs.

Shaanxi will have the highest number of new listed companies in its history in 2020, which is also tempting for any company. After all, Shaanxi Auto has also unsuccessfully sought a shell listing several times, which proves its determination.

Together we look at the financing performance of listed commercial vehicle companies.

China National Heavy Duty Truck (000951): 5.9 billion yuan of direct financing through the capital market.

Dongfeng Motor (600006): 2.5 billion yuan of direct financing through the capital market.

If we take into account BYD's continuous spin-offs and the fact that the "new car makers" are seeking to go public at the first opportunity, it has been shown to the market countless times that the automotive industry needs a constant flow of capital investment and whoever gets the capital support first is likely to gain a competitive advantage.

1. Active adjustment of equity and assets.

In May 2021, Shaanxi Automobile Group has officially changed its name from "Shaanxi Automobile Group Limited Company" to "Shaanxi Automobile Group Co.

In June 2021, the Daily Economic News reported that a number of companies formerly owned by Shaanxi Automobile Holdings had been transferred to Shaanxi Automobile Group. In particular, both Shaanxi Auto Holdings and Shaanxi Auto Industry withdrew from Shaanxi Auto Commercial Vehicle, and Shaanxi Auto Commercial Vehicle added Shaanxi Auto Group as a shareholder, with a 58.42% stake.

2. Entered the Securities and Futures Commission (SFC) counselling process.

In April 2021, Western Securities announced that Shaanxi Automotive Group Co., Ltd. intended to make an initial public offering of shares and go public, and in April filed for counselling with the Shaanxi Securities Regulatory Bureau, with its core business stated as "complete vehicles, commercial vehicles and parts".

Based on today's information, we have come to the basic conclusion that "successful listing of the main business" should be the main focus of the current management of the company, whether it is the layout of overseas, or the additional injection of Baoji, constitute a "quality paving stone ".

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