Great Wall Motor (601633): Proposed to acquire GM India factory for internationalization
Event: Recently, the company and General Motors reached an agreement on the acquisition of GM’s India Taligang plant. According to the letter of intent signed by the two parties, including the GM India company in the Tarigang plant will be transferred to Great Wall Motors.And approval from relevant regulatory authorities. Coinciding with the short-term downturn in the Indian auto market, the company’s strategic layout against the trend.The Indian auto market has a sales volume of about 3 to 4 million units, ranking among the top in the world. In 2019, the Indian auto market has shifted due to various reasons such as the economic downturn. Among them, the passenger car market has replaced about 20%.GM is considering the sale of the Taligan plant in India based on its global strategy. This coincides with the downturn in the Indian auto market and the company’s strategic layout against the trend. It is expected that the acquisition will have higher value.In February 2020, the company 杭州夜网论坛 will bring the Haval brand and Great Wall EV models to the Indian Motor Show in India, and announce the Indian market strategy to enter the Indian market.
The Indian auto market has huge potential and can take advantage of opportunities to enter the Middle East and African markets.India’s large and young population will continue to be in the demographic dividend period and the potential for rapid economic growth in the future. According to data released by the World Bank, the number of thousand people in the Indian market in 2019 is only 22, and the market space is huge.In addition, India is located at the northern end of the Indian Ocean. The factory is located in the state of Maharashtra, which attracts the most foreign investment in India. Its capital, Mumbai, is the financial center and one of the three major ports in India. This time, it can open the Indian market.Can expand the Middle East and African markets west. Make more efforts, and take internationalization one step further.Great Wall Motors has achieved global distribution in research and development, and has various research and development centers in the United States, Germany, Austria, India, Japan and other places.Pickup and SUV models have also been sold worldwide. At the same time, the China-Russia all-craftsmanship plant has been successfully put into production in 2019, and it has become the highest overseas plant for domestic car companies. The WEY brand was established in 2021 and will enter the European market.Internationalization has become more powerful, and the proposed acquisition of GM’s Indian plant is about to launch, which will take the company’s internationalization process one step further. Investment suggestion: After the Russian plant is put into production in 2019 to open the Eastern European market, the company’s internationalization road has further advanced to India, and it is worth looking forward to in the future.The current industry is at the bottom of certainty, and the company still has some flexibility when the industry recovers. Pacific Motors will continue to strategically recommend Great Wall Motors in 2020. It is expected that the company’s net profit attributable to its mothers in 19/20 will be 4.9 billion / 6 billion, respectively.Buy “level. Risk reminder: The sales volume of the automobile industry is lower than expected, and the price reduction promotion is larger than expected