After 9 years of car manufacturing, NIO Automobile finally obtained the qualification to independently produce cars. In the current era of overcapacity in automobile production and strict control of production qualifications by relevant departments, NIO Automobile may provide a path for later car manufacturers such as Xiaomi to emulate - prove sales capabilities and obtain independent production qualifications.
On December 4th, Interface News found that NIO Automotive Technology (Anhui) Co., Ltd. appeared in the credit information management system of vehicle production enterprises under the Ministry of Industry and Information Technology. This means that NIO has obtained independent production qualifications. At this point, the top three new car making forces have obtained independent production qualifications through acquisitions or asset transfers.
Interface News requested feedback from NIO Motors on this matter but did not receive a response. NIO President Qin Lihong told First Financial, "This is a normal production management procedure performed in accordance with relevant regulations. Currently, the company has no further information to release."
Screenshot of the Ministry of Industry and Information Technology
It is not surprising that NIO Automobile has obtained production qualifications. In October of this year, Jianghuai Automobile announced that the company plans to transfer some assets through public listing, involving inventory, fixed assets, construction in progress, buildings and land use rights of the third factory of the passenger car company, as well as the structure and equipment assets of the new bridge factory of the passenger car company. The proposed listing price is 4.498 billion yuan.
Qin Lihong responded to Interface News by stating that the transfer involved the production of two factories for NIO cars. A person familiar with the situation told Interface News that both factories were built by NIO Automobile, but their production qualifications are affiliated with JAC Automobile. The transfer of Jianghuai Automobile's factory is essentially a transfer of production qualifications.
Zhang Junyi, Managing Partner of Aowei Consulting, stated in an interview with Interface News that after NIO Automobile obtains its production qualification, it will not need to obtain subsidies through a third party and will have more say in negotiations with partners in the future.
The potential risk is that NIO Automobile will face short-term cash flow pressure. According to NIO's Q2 report, as of June 30, 2023, NIO's cash reserves were 31.5 billion yuan, a decrease of 6.3 billion yuan from the first quarter. After facing a crisis in 2019 and delaying the release of its financial report, NIO Automobile has once again postponed the release of its third quarter report this year, which has been interpreted by the outside world as poor financial data or performance.
In the past four years, Jianghuai Automobile has earned 3 billion yuan in revenue through outsourcing to NIO Automobile, but the improvement in its financial situation is not significant. In the first half of this year, Jianghuai Automobile had a net loss attributable to the parent company of 243 million yuan, and the net cash flow generated from operating activities was 582 million yuan, a year-on-year decrease of 5.37%.
For Jianghuai Automobile, selling these assets can recover cash and provide financial support for cooperation with Huawei and Volkswagen, which is the focus of Jianghuai Automobile's future business development.
Recently, Jianghuai Automobile announced the landing of its intelligent selection car business in cooperation with Huawei. According to market news, both parties will collaborate on a million yuan MPV model. The joint venture between Jianghuai Automobile and Volkswagen, Volkswagen Anhui, will also become the core of Volkswagen's intelligent electric vehicle business in China in the future.
After the rise of the "Internet car making" wave, the contract manufacturing model that can avoid qualification restrictions was widely used, and new car making forces such as Xiaopeng and Zero Run had early chosen the contract manufacturing model.
The new forces unanimously chose to give up contract manufacturing, mainly because the contract manufacturing model has drawbacks such as high costs, and contract manufacturing is also constrained by the production and quality control capabilities of traditional automotive companies. For manufacturers, taking the initiative in the entire car manufacturing process not only facilitates rapid iteration of vehicle models and cost control, but also improves efficiency if major and in-depth reforms are carried out in the future.
In addition, the government has stricter control over the OEM model. At the beginning of last year, the Ministry of Industry and Information Technology issued a document stating that both the OEM factory and the new energy brand must have production qualifications in order to mass produce new energy vehicles. The highly anticipated Xiaomi Motors will also be manufactured by BAIC.
NIO Motors has obtained production qualifications this time, which may provide a pathway for Xiaomi Motors to obtain production qualifications. After demonstrating a certain level of independent sales capability, there is a possibility of national special production qualifications.
Zhang Junyi pointed out that Xiaomi needs to prove its sales ability in order to obtain production qualifications. "At the very least, it is necessary to sell more than 30000 vehicles, and even have a sales capacity of more than 300000 vehicles, in order to prudently open up the issuance of license plates. This indicates the country's expectations for the scale and survival ability of new entrants."