The October 31 deadline will be broken down to the tenure of a private car company

October 17, 2013 the State Ministry of Industry issued the first batch of "special public vehicle manufacturers (Batch 1)" Notice 48 car companies, while 48 companies in this business in the proportion of private car is not low. According to the "Announcement", if these 48 auto companies still fail to pass the relevant assessment within two years, they will be suspended from the production qualification of auto products and completely withdraw from the auto industry.

Lifetime system for special car companies will be broken
Lifetime system for special car companies will be broken

Now, this two-year deadline has entered a countdown. On the other hand, Prime Minister Li Keqiang’s instructions on September 18th “to step up the handling of zombies” will undoubtedly speed up the automotive industry to retired the inefficient production enterprises and advance the pace of mergers and reorganizations.

In the list of the first round of 48 auto companies issued by the Ministry of Industry and Information Technology, there is no way for the official website to query, and the way to reserve contact information for downtime or space numbers abounds. The assets appraisal information made by Beijing Zhongyuan Zhengxin Assets Appraisal Co., Ltd. for a company in a "special public notice" shows that as of December 31, 2010, the company's net assets were only 34,600 yuan, and the asset-liability ratio was as high as 99.99%. The great contrast is that the company's appraisal value is as high as 159 million yuan, and the premium is more than 4000 times. The value of the "shell" is almost clearly priced. However, judging from the current announcement information, 48 companies have succeeded in getting rid of their fate through restructuring. Obviously, it is not an easy task to succeed with "shell".

Not selling shells, is there any other way? According to the "Notice on Establishing an Exit Mechanism for the Automobile Industry" issued by the Ministry of Industry and Information Technology, the annual sales of passenger cars during the two-year evaluation period shall not be less than 1,000, the number of large and medium-sized passenger cars shall not be less than 50, and the number of light passenger cars shall not be less than 100. The number of medium- and heavy-duty trucks shall not be less than 50, the number of light-duty trucks shall not be less than 500, the number of special vehicles for transport shall not be less than 100, and the number of motorcycles shall not be less than 1,000. Obviously, there is another way besides selling shells, but even in the market competition that has already become fierce, even the "resurrection conditions" that seem to be no lower than the threshold, have stopped production and have no effective operating structure and mechanism. For companies, achieving this requirement is also extremely difficult.

The slimming down and exit mechanism of the auto industry has become an irreversible trend in the future. It is not difficult to see from the merger and acquisition cases of many major groups such as the reorganization of Zhenjiang Automobile Factory by GAC Group and GAC Group’s reorganization of GAC Gonow in the past year. The auto companies have begun to take action in the “merger and reorganization boom” trend.

With the arrival of the deadline of October 31, 2015, how many dying companies that failed to reorganize or achieve relevant production and sales targets will be completely withdrawn and will soon be confirmed. The more cruel reality is that the number of "deaths" of car companies that were announced in the first round was just a beginning.

According to another report, the editorial personnel interviewed also confirmed from the side that for enterprises that are not up to the standard in "Special Publicity", they will resolutely retreat. The lifelong system of car companies will be completely broken.

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