China’s Automobile Enterprise Restructuring:Motivation,Situation And Countermeasures

The automobile industry has a long industrial chain, strong correlation, a wide range of employment and so on, which is the pillar industry of national economy. Its development has a significant impact on the whole national economy. To develop Chinese economy, not only can auto industry not drag, but also promote in advance and drive the development of other related industries. But long-term since, China’s auto industry has so many prominent problems, such as the small and the layout of China automobile industry scale, low industry concentration, weak the independent brand, that is seriously affected the development of the automobile industry. To overcome these problems and to seek development, auto companies has been explored in practice and found the reorganization is a fast road to development, which is in conformity with the world’s auto industry development path.To develop independent brands and to enhance the industrial concentration degree and the international competitiveness, China’s automobile industry started the restructuring activities. Since2009, our government has introduced policies to encourage automobile enterprises to carry out mergers and acquisitions activity. In January of2013, the Ministry of industry and information technology, the national development and Reform Commission and other10ministries jointly issued the "guiding opinions on promoting the merger and reorganization of enterprises in key industries ", which promotes the merger and reorganization of automobile enterprises with guidance of the market. Mergers and acquisitions history of the automotive industry is more than ten years, but restructuring process is slow and the effect of the reorganization is not ideal. There were many cases of reorganization failure because of bad cultural integration or management after reorganization. Even there were some instances in which the both were worn down after the reorganization. In addition, restructuring activities is not complete and restructuring thorough the industrial chain is not enough.With a standardized research method, a comparative analysis method and a case analysis method, the article researches on restructuring activities of China’s automobile enterprises. Based on the relevant theories of corporate restructuring, the paper studies restructuring of China’s automobile enterprises, focusing on motivation, present situation and countermeasures of auto enterprise restructuring,The article is divided into seven parts:The first part is an introduction. The article introduces the research background and significance, reviews literature on restructuring, shows the structure arrangements and methods of the article. The second part is the basic theory of corporate restructuring. Firstly, it introduces the concept of corporate restructuring and its classification, and then describes motivation theory of the corporate restructuring, mainly including the efficiency theory, transaction cost theory and the theory of market power. The third part is the motivation about corporate restructuring of China’s automotive. It analyses why automotive corporate reorganizes in external sight and in inner sight. External motivation is mainly restructuring inevitable trend, government policies to promote and foreign enterprises offensive pressure. Inner motivation includes a rich product line, the development of independent brands, improving industrial concentration and international competitiveness. The fourth part is analyzing the current situation of the automobile corporate restructuring in China. Firstly it reviews the course of China’s automobile enterprise restructuring, and analyzes its development trend. Then it analyses the way the car enterprise restructuring and the effect of reorganization. Finally it extracts the problems existing in the reorganization, including the slow process of cross-regional reorganization, complex restructuring integration, incomplete industrial restructuring, etc. The fifth part is a comparative analysis of China’s automobile enterprise restructuring cases. From two latest cases--Jiangling Automobile reorganizing Chang’an heavy truck and China heavy truck reorganizing Chengdu Ace, it gives a comparative analysis of reorganization motivation and restructuring results. Finally, it proposes problems existing in restructuring. The sixth part is our country automobile enterprise restructuring measures. Aiming at the existing problem of our country automobile enterprise restructuring, as well as the results of case analysis, it puts forward countermeasures and suggestions in the government sight and enterprise sight to promote China’s automobile enterprise restructuring. Strategies in government sight include the transformation of government functions, coordinating the interests of all parties. Suggestions in corporate sight include the combination of enterprise strategy, promoting cultural fusion, introduction of talents. The last part is a conclusion. It summarizes the main conclusion of this article, and points out the limitations of this study and the direction of further research in the future.