Private enterprise acquisition of private enterprises needs further integration

In the past two years, most of the mergers and acquisitions in domestic automobile circulation have occurred between two private enterprises. The participation of state-owned and foreign companies has been minimal, and Baoxin’s acquisition of Yan Jun is a special case. For successful mergers and acquisitions, the current integration effect is not yet obvious, and the depth of the integrated field needs further improvement.

Private companies have more potential to acquire foreign companies' integration effects

As for Baosight's acquisition of Yan Jun, some people in the industry are not very optimistic. The two companies, one south-north, one private-enterprise-foreign company, have very different cultural backgrounds and management concepts. The running-in process will be very long. After the settlement of assets is resolved, the two dealers in the merger and acquisition process must solve the financial management and remuneration system. In this process, the stability of the team, especially the management team, is crucial. As a foreign company, Yan Jun’s high-paying system is unique among its peers. Its main advantage is the income level of second-line jobs. Management’s income is similar to that of its peers.

“Yan Jun’s high salary fully mobilized the enthusiasm of the employees,” said a person in charge of a luxury brand dealer in Beijing. “But now, because the leadership and the middle tier have changed some, the previous management philosophy is difficult to implement. The level of income has dropped a lot. According to Jin Yongsheng, a channel research expert at Xinhuaxin, in fact, there is not much difference between private and foreign companies in the overall management level. There is not much difference in the level of brand marketing and sales, but only different focuses. Most of the private dealerships are flattened structures, so they are bolder in terms of decentralization of decision-making authority, and the level of foreign-funded groups is relatively complex, and more collective decisions are needed, and management efficiency may be lower.

In addition, the private dealership group is, after all, a local company, which has greater advantages in relation to local government relations, preferential policies, store approvals, and striving for good locations. While foreign companies are relatively more advanced in the business philosophy model, and innovative business development is more mature, it is possible to make up for the inadequacy of private companies' profitability at a relatively single point and derivatives business is still immature.

Joint ventures established to be independent of each other

Compared to Baosight’s strong acquisition of Yan Jun, the cooperation between Zhongsheng and Betterl gives both parties greater freedom and differs in form. Zhongsheng Group acquired 50% of the shares of the company in 2010. The two parties established Chartered (China) to invest in overseas companies, each holding 50% of the shares.

According to a person from the company, the owner of the company became the current investment company. However, the management team is still the original team of the company. The Zhongsheng Group does not participate in the operation of the company. It mainly passes the management committee. Responsible for supervision, some of the major decisions and projects of the company must be discussed collectively by the management committee of Zhongsheng Group and formulated through consultation.

For Zhongsheng, the acquisition of Bailey’s helped it accelerate its entry into the high-end market. Before that, it was mainly a mid-range brand, and nearly half were Japanese cars. However, the company will use this to accelerate its nationwide expansion goal. According to an industry insider of Betterride, the most intuitive experience after cooperation is that there are plenty of funds and the speed of building stores. It is expected that 4 or 5 4S stores will be added this year, basically all in the second and third tier markets, and before that, The network is concentrated in first-tier cities such as Beijing and Tianjin.

In addition, because Zhongsheng and Betterl have great differences in brand structure and corporate culture, they did not quickly and fully integrate themselves, but maintained their independence under the premise of mutual respect. “The brand culture of the two companies and the work of employees Requirements, the requirements for profit margins are different, and thus are still in the run-in. But we will not ask who should lead," said the above-mentioned Baileys. It is reported that after being acquired by 50% of equity, Suntory's salary system has not changed substantially, and the management team has remained basically unchanged, achieving a smooth transition.

Private enterprises acquire complementary advantages of private enterprises

Zhengtong Group and China Steam South have a more dominant position because of their acquisition relationship. The two sides integrated their management team and compensation system. An insider of the Zhengtong Group stated that after the acquisition, some senior executives of South China Steamship left the company, but 70% to 80% of the employees have left.

After the initial integration of the management team and the architecture was completed, the two car dealership groups entered deep integration of the brand and management concepts. According to the above-mentioned sources, “With the addition of Volvo and Jaguar Land Rover brands, Zhengtong Group's layout in the luxury brand area has become more comprehensive and reasonable, and the bargaining chips with manufacturers have been further enhanced, which makes it easier for Zhengtong to apply for these Land Rover Volvo brand names in the future. ”

At the same time, Zhengtong Group can also promote the mutual exchange between its different luxury brands. For example, copy Jaguar Land Rover's sales experience to Audi, BMW, involving sales, marketing, inventory control and purchase collocation and other fields. This has contributed to the improvement of the overall management of the two previous independent groups.

Jin Yongsheng said that the consolidation of the current domestic distributor group is still in its infancy, mainly in terms of scale and sales volume. There is still great potential to be tapped in the innovation of profit points and the integration of customer resources. “There is no significant change in the operating efficiency and decision-making efficiency of the merged group. However, after all, there is a need for a process that changes from quantitative to qualitative.”