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compared with the guangzhou factory that was quickly taken over by gac aion, the changsha factory of gac fiat chrysler automobiles co., ltd. (hereinafter referred to as "gac fca") has not yet waited for a "takeover". on september 18, a beijing business daily reporter found that the assets of the gac fca bankruptcy liquidation case failed to be auctioned again because no one bid. it is understood that the assets of the gac fca bankruptcy liquidation case (changsha factory) include current assets and non-current assets, among which non-current assets include land, buildings (structures), equipment, and projects under construction.

starting price reduced by 700 million yuan

this is the third time that the factory has failed to sell. on july 20 and august 5 this year, the gac fiat chrysler changsha factory was auctioned twice, with starting prices of approximately 1.915 billion yuan and 1.532 billion yuan respectively, but both failed because no one signed up. at that time, the wechat official account of the gac fiat chrysler manager announced that after two failed auctions, the manager had suspended the third auction and was once again actively contacting the local government's investment promotion department and a few potential investment companies. no investment company has been confirmed yet. it is understood that the starting price for the third auction was approximately 1.225 billion yuan, which was nearly 700 million yuan lower than the first starting price, but still no one took over.

in 2010, gac group and stellantis group established gac fiat chrysler automobiles with a 50:50 equity ratio; in 2015, the jeep brand under gac fiat chrysler automobiles was officially produced in china. subsequently, gac fiat chrysler automobiles launched models such as jeep cherokee, renegade, compass and grand commander, forming a product lineup covering small, compact and mid-size suvs. data shows that gac fiat chrysler automobiles sold 222,300 vehicles in 2017, but sales began to decline from 2018, and sales fell to 20,100 vehicles in 2021.

sales continued to be sluggish, and gac fiat chrysler's debt ratio continued to rise. gac group once issued an announcement stating that gac fiat chrysler's production and operations have come to a complete standstill. as of september 30, 2022, gac fiat chrysler (unaudited) had total assets of 7.322 billion yuan, total liabilities of 8.113 billion yuan, and an asset-liability ratio of 110.8%. in july 2022, the stellantis group issued an announcement stating that it would negotiate with gac group to terminate the local joint venture (ie, gac fiat chrysler), and will distribute jeep brand imported models in china in the future. in october of the same year, gac fiat chrysler applied to the court for bankruptcy because its actual assets could not repay all debts and it had basically ceased operations, and officially entered bankruptcy proceedings.

gac fiat chrysler automobiles has successively invested in the construction of two production bases in changsha and guangzhou in china. in september 2021, due to idle production capacity, the stelantis group announced the closure of gac fiat chrysler automobiles' guangzhou plant. since then, the plant has been taken over by gac aion for the production of pure electric models. regarding the failure of the gac fiat chrysler automobiles changsha plant to be auctioned again, yan jinghui, a member of the expert committee of the china automobile dealers association, believes that from the product point of view, the gac fiat chrysler automobiles changsha plant is mostly a fuel vehicle production line. in the new energy transition stage, the existing production line foundation of the factory may not meet the current intelligent and electrified manufacturing needs of automakers. many companies will comprehensively consider the purchase and operation investment costs.

the asset auction announcement of the bankruptcy liquidation case of gac fiat chrysler automobiles (hereinafter referred to as the "announcement") shows that since gac fiat chrysler automobiles has stopped production in 2022, some of the assets in the subject matter have been idle for a long time and may be lost or damaged. the details of the subject matter involved in the appraisal report are for reference only and cannot be used as the final basis for bidders to judge and weigh the value, nor as the basis for delivery after the bidding with the buyer. at the same time, it is shown in the subject matter column that the current assets are mainly spare parts such as screws, spindles, bearings, tightening shafts, encoders, visual sensors, laser marking machines, welding controllers, etc., which are in general maintenance and storage status due to the unsalable and discontinued production of related vehicle products.

in addition, the announcement mentioned that due to historical reasons, the red line map that gac fiat chrysler automobiles relied on when building the wall was incorrect, causing the land area within the scope of the wall built by gac fiat chrysler automobiles to exceed the actual land ownership area. the excess area is approximately 12.6 acres (8,411.13 square meters), located at the northern boundary of gac fiat chrysler automobiles, and is not within the scope of this auction and appraisal. any subsequent procedures and other expenses shall be borne by the buyer.

joint venture brands stall

looking back at the past development of gac group, it was basically based on joint ventures. in the era of fuel vehicles, due to the short development time of chinese automobiles, compared with overseas established automobile industrial countries, the brand power and technology were relatively weak. chinese auto companies introduced foreign brands and established joint ventures to make a living.

gac group is one of them, and it has reaped great rewards by virtue of its deep ties with well-known japanese automakers. from 2014 to 2021, gac toyota's annual sales increased from 370,000 to 830,000, and gac honda's sales increased from 480,000 to 780,000. driven by these two joint venture brands, the group's overall sales have grown rapidly.

during these eight years, more than 70% of gac group's annual revenue came from joint venture brands. the group's revenue and joint venture brand sales were deeply tied together, which also laid "hidden dangers."

in recent years, with the prevalence of new energy vehicles in china, the competitiveness of joint venture brands in the chinese automobile market has gradually declined, and some joint venture brands have been forced to withdraw due to the fierce competition in the domestic market.

however, compared to taking over factories through bankruptcy auctions, a more common method in the automotive industry is acquisition. vehicle manufacturers that need to expand production or have other needs can quickly increase production capacity by acquiring idle factories of other automobile brands, or they can acquire factories by acquiring companies.

at the end of last year, after obtaining independent production qualifications, nio acquired some factory assets of jac motors, which had previously manufactured for it, for 3.158 billion yuan. the gac mitsubishi factory, also located in changsha, was also taken over by gac aion to expand production capacity after mitsubishi ended its local production in china.

considering the current intensified competition in the domestic auto industry, auto companies may not seek to expand production blindly, and it is still unknown whether someone will take over the gac fiat chrysler plant at this time. however, it is worth noting that there are also cases where non-auto buyers have taken over the auctioned assets of auto companies.

last year, baoneng automobile, which attracted much attention, had its qoros automobile production line listed on the judicial auction platform at the end of 2022 at a price of 122.9 million yuan, but was later withdrawn. at the end of april this year, the asset was auctioned again at a price of 7.3863 million yuan, and was finally auctioned by shenzhen fengyu enterprise management co., ltd. at a price of 6.6476 million yuan in the second auction in may. according to tianyancha information, the company is engaged in software and information technology services and has invested in many automobile sales and supply chain companies in guangdong.

beijing business daily reporter liu xiaomeng