Economic Benefits Of Horizontally Integrated Industry Chain In Auto Parts Industry

As China's auto industry entered a period of steady growth,industry concentration increased,and the scale of industrial integration,mergers and acquisitions continued to increase.At this stage,the automobile industry chain has problems such as insufficient professional division of labor,low level of corporate cooperation,and scattered distribution of industrial chain links.In addition,the auto parts industry is late to start and has weak research and development capabilities.The main parts and components are concentrated in the low-end.The market cannot compete with foreign complete industrial chains,automotive core technologies and high-end products.Under the background of increasingly mature industry,fierce competition and unfavorable growth of enterprises,automobile companies mainly seek new economic growth points in three ways.First,through vertical mergers,extending the industrial chain,especially expanding customer resources and marketing channels;second,horizontal mergers,integrating core technologies and emerging industries to achieve economies of scale;third,blending mergers and acquisitions,achieving strategic transformation or diversification strategies,To occupy the market.In recent years,the auto parts industry has mainly achieved horizontal concentration through mergers and acquisitions,and through the acquisition of core assets or emerging assets to improve the industrial chain and release production capacity.At present,the academic research on M&A performance mainly focuses on individual M&A cases in the pharmaceutical and coal industries,and is less involved in the auto parts industry,and rarely studies a series of M&A activities of enterprises from the perspective of industrial integration strategy.Based on this,this paper selects the typical enterprise in the auto parts industry-Shuanglin as a case company,under the guidance of the theory of scale economy,diversified operation and synergy,combined with macroeconomics and industry characteristics,to build a research system of economic benefits.In an attempt to analyze the short-term market reflection,medium-term synergy and long-term industrial integration,Shuanglin has analyzed the value of Shuanglin's industrial upgrading through horizontal mergers since 2013.The results of the study:(1)Short-term market reaction: Taking the acquisition of three typical M&A projects of Hubei New Torch,Chengyi Shares and Shuanglin Investment as examples,using event research method analysis,the acquisition of Hubei New Torch will extend the industrial chain.To the automotive wheel bearing field and the acquisition of Shuanglin Investment,the strategic adjustment of the company to realize the layout of the automatic transmission business of the core components of passenger cars has been optimistic about the market and achieved more excess returns.However,when the company merged and earned its customers' resources,investors were skeptical about prudence and the market performance was relatively weak.However,after the rationality was restored,the market turned better.Using Tobin's Q value to analyze the change of Q value of Shuanglin's shares since its listing in 2010,it is found that the Q value of the company has increased rapidly after implementing the horizontal integration strategy,reaching 3.67 in 2016.Market investors have maintained a positive attitude towards the M&A activities of enterprises.(2)Medium-term synergy: From the three perspectives of operation,management and finance,it is found that the R&D investment intensity,R&D investment efficiency,profitability,development capability and cost control capability are improved,but cost control,operational capability,and debt service The ability has not improved significantly.(3)Long-term industrial integration: Starting from the asset integration motivation,the company realizes strategic transformation,enriches core business,improves customer structure,and creates industrial synergy,with long-term economic benefits.Finally,based on the results of the research on the benefits of Shuanglin's horizontal mergers and acquisitions,three inspirations are summarized,namely,selecting appropriate M&A targets,seeking complementary assets,and effectively integrating resources after M&A.Provide reference for other companies in the industry.