Qingtan | Seat decouples from JAC Volkswagen?

A few days ago, Seat sales chief Wayne Griffiths said in an interview with Autoweek that Seat will postpone its return to the Chinese market indefinitely. "The scale of China's new car market has continued to shrink in the past two years, and the small car sector has been particularly affected. Coupled with the current new coronavirus epidemic," it was decided to postpone Seat's return to the Chinese market. This is consistent with what Volkswagen Group CEO Diess said at the group's annual meeting. But in addition, Wayne Griffiths also said something ambiguous. He said that Seat will not participate in the joint venture between Volkswagen China and JAC Automobile, but "Seat will continue to cooperate with JAC Automobile on research and development projects" and continue to promote the production and sales of electric vehicles. He also said that Seat will now focus on deepening the European market and expanding the Latin American market. This passage shows that Seat has not only postponed its entry into China indefinitely, but will also not be introduced into the country by JAC Volkswagen. It will only maintain technology research and development cooperation with JAC. Last year, the "8:20" column of Ifeng.com reported that JAC Group's 2018 financial report showed that the JAC Volkswagen project has made no progress. 99% of the total assets of 2 billion yuan are still cash assets, with almost no land and factories. Large fixed asset investment. On March 19, 2020, JAC released its 2019 financial report. According to the financial report, there are three noteworthy numerical changes in the JAC Volkswagen project. First: a loss of 360 million yuan. The total assets of the JAC Volkswagen project shrank by approximately 300 million yuan. The reason was that JAC Volkswagen suffered a loss of 360 million yuan. Therefore, the "JAC Volkswagen" project in the long-term equity investment of both shareholders each incurred an investment loss of 180 million. Second: There is still no large fixed asset investment. 94% of the assets of the JAC Volkswagen project are still current assets such as cash, inventory and accounts receivable, and there is still no large fixed asset investment such as land and factories. Third: 440 million sales related transactions. JAC Volkswagen and one of its parent companies, JAC Automobile, generated sales related transactions of "cars and related services" of approximately 440 million, which is exactly twice JAC Volkswagen's operating income of 228 million. Considering that JAC Volkswagen does not have a factory, it is very likely that the amount generated from the sale of products produced by JAC is the incoming and outgoing amount. Despite this, JAC Motors' 2019 financial report still stated that "the cooperation project with Volkswagen continues to deepen, and the construction of the joint venture's R&D center is progressing in an orderly manner." This is also the only text in the financial report that mentions the progress of the JAC Volkswagen project. On November 28, 2018, witnessed by Chinese leaders and Spanish Prime Minister Pedro Sánchez, Volkswagen (China), JAC Motors and Seat signed a memorandum of understanding in Spain to jointly develop an electric vehicle platform. . According to the agreement, JAC Volkswagen will introduce the Seat brand before 2021 and plans to establish a new R&D center in Hefei, Anhui to jointly develop small electric vehicle products and components. However, after BMW expanded its joint venture shareholding in China to 75% in 2018, many multinational car companies began to re-examine their China strategies. For example, foreign media once reported that Mercedes-Benz had negotiated with its Chinese partners on this matter, but there has been no substantial progress. At the Volkswagen Group's annual meeting in March 2019, Volkswagen Group CEO Diess bluntly stated that he hoped to increase the shareholding ratio of joint ventures in China. After the news was reported, it caused a strong rebound from SAIC and other Chinese joint ventures. At that time, industry analysts believed that Volkswagen’s increase in its joint venture shareholding would most likely begin with the new joint venture project JAC Volkswagen. In the past two years, except for Professor Heizmann, the then President and CEO of Volkswagen Group (China) before his retirement, and Anjin, Chairman of JAC Motors, attended a groundbreaking ceremony in the depth of winter on December 10, 2018, JAC Volkswagen has made no progress. . The new car Sihao, which was launched in a low-key manner after many twists and turns, is also considered by most industry media to be a rebranded car based on JAC. There are many unconfirmed reports that the JAC Volkswagen project has reached a deadlock due to the game between the shareholders. Regardless of whether the news is accurate or not, it is true that the development of JAC Volkswagen projects is slow. Now the news that Seat has postponed its entry into China indefinitely and decoupled from JAC Volkswagen seems to respond to past rumors.