The long-standing collaboration between Stellantis Group and Zero Run Automobile, which has been rumored in the industry, has finally been officially announced.
Zero Run announced on October 26th that Stellantis Group plans to invest approximately 1.5 billion euros to acquire approximately 20% equity; At the same time, Stellantis Group and Zero Run Motors will establish a joint venture called "Zero Run International" in a ratio of 51:49. Except for the Greater China region, the joint venture company has the exclusive right to export and sell to all other markets worldwide, as well as the exclusive right to manufacture Zero Run automobile products locally.
This is another new car manufacturing force in China that has received strategic investment from a multinational car company after Volkswagen acquired the equity of Xiaopeng Automobile. What is the intention of both parties to sign? From Xiaopeng Automobile to Zero Run Automobile, new forces of Chinese car manufacturing enterprises are gradually being seen, and cooperation between Chinese and foreign car companies is becoming a trend?
Stellantis Group will become the second largest shareholder of Zero Run Automobile and move towards globalization through cooperation
According to the announcement released by Zero Motor and its shareholder Dahua Group, Stellantis received 20% of its equity, in addition to subscribing for 194 million new H shares (with a subscription price of HKD 43.8 per share), the other part comes from Zero Motor's shareholder Dahua Group, which plans to transfer its 7.88% stake in Zero Motor to Stellantis Group for HKD 3.492 billion. After the transaction is completed, Dahua Group will no longer hold the shares of Zero Motor, and Stellantis Group will hold 14.53% of the shares of Zero Motor, second only to the single largest shareholder group formed by the founder of Zero Motor, Zhu Jiangming and his wife, and other individuals.
When discussing why we are partnering with Stellantis Group, Zhu Jiangming, founder, chairman, and CEO of Zero Run Technology, said, "Firstly, the two companies have a very similar culture. They are both frugal, emphasizing efficiency, simplicity, and efficiency, and focus on product technology. Secondly, they complement each other. Currently, most of Zero Run's sales are in China, and to expand into the global market, we need a good partner
Zhu Jiangming believes that the automotive industry is different from traditional industries. Only by going global through cooperation can China's good technology and products be brought to the world, and China's automobiles can achieve globalization. He stated that Zero Run Motors will utilize Stellantis Group's cooperation more through its "multi brand" business philosophy and channel resources, which can quickly seize the market; For Stellantis, it is possible to achieve greater scale by adding the Zero Run brand outside of China, based on the existing 14 brands, to gain advantages in terms of service, finance, and sales network.
Stellantis Group also needs to have a certain level of exposure to the Chinese market. We are not currently very successful in the Chinese market, so we are very inclined to rely on a successful company in China. When discussing why we chose to cooperate with Zero Motor, Stellantis CEO Tang Weishi said that the group had conducted a lot of research work on the Chinese market before and ultimately reached a consensus with Zero Motor.
In the view of Zhang Hong, Secretary General of the New Energy Vehicle Branch of the China Automobile Distribution Association, the above cooperation is a mutually beneficial and win-win choice for both parties. At present, Zero Run Automobile has not yet reached the profitability stage and its cash flow is tight. Therefore, the equity cooperation of Stellantis Group is undoubtedly a timely rain for it, greatly alleviating the difficulties of Zero Run Automobile's tight financial chain. For Stellantis Group, the "marriage" with Zero Run Automobile is also a valuable opportunity to return to the Chinese market.
So far, the business of Stellantis in China has almost declined, with the withdrawal of Changan PSA and GAC Fick, as well as the sluggish performance of DPCA, resulting in a significant decline in Stellantis Group's penetration rate in China. Therefore, Stellantis Group has adjusted its strategy in China to switch from a self operated entity to a light asset model. "Zhang Hong pointed out that although the capital chain of Zero Run Automobile has encountered temporary difficulties, it is still a brand with high activity in the Chinese market, By collaborating with Stellantis Group, one can directly enter the Chinese new energy vehicle market, which is undoubtedly a low-cost and high profit option.
Establishing a joint venture between the two parties is a relatively strategic cooperation model, "automotive industry analyst Zhong Shi said in an interview with a reporter from Beike Finance of the New Beijing News. For younger companies such as Zero Run Automobile, it is very difficult to" fight alone "in the international market solely on their own, and it takes a long time and effort to accumulate experience. By borrowing resources from international car companies, Zero Run can shorten its internationalization process. Risk sharing, resource sharing and collaboration, thus achieving benefit sharing
Zhong Shi stated that the cooperation between the two sides indicates that Zero Run automotive technology has been recognized by multinational car companies and the industry; Meanwhile, Stellantis Group's cooperation with Chinese car companies with a pragmatic attitude can complement its shortcomings in the Chinese market. For multinational car companies, in the fiercely competitive Chinese market, time, cost, and efficiency are all issues that need to be considered. Collaborating with Chinese car companies can achieve the effect of 'short, flat, and fast'
Zhu Jiangming revealed that after the investment funds are injected, more resources will be invested in intelligent driving and potential future technology research and development. At the same time, we will also invest more resources in domestic network expansion and global market expansion. Zero Run Motors stated that it is expected that the joint venture of "Zero Run International" will begin its export business in the second half of 2024.
Is cooperation between Chinese and foreign car companies becoming a trend? Analysis: Be wary of foreign light asset operation models
The cooperation between Stellantis Group and Zero Run Automobile is a strategic investment from a multinational car company, another new domestic car manufacturing force, following Volkswagen's acquisition of Xiaopeng Automobile's equity.
Volkswagen is holding hands with Xiaopeng in order to further its global single market in China. In this collaboration between Stellantis Group and Zero Run Automobile, Stellantis Group will leverage Zero Run Automobile's electric vehicle ecosystem to help achieve the electrification goals in the "Dare Forward 2030" strategic plan, with Zero Run Automobile more focused on the international market.
Will cooperation between international and Chinese car companies become a future trend, and will Chinese car company technology be more applied?
Zhong Shi pointed out in an interview with a reporter from Shell Finance that multinational car companies were originally promoting relevant strategies according to their ban on fuel consumption, but the rapid development of new energy vehicles in China has disrupted their original pace and started to pay attention to the pace of Chinese car companies; The cooperation between multinational car companies and Chinese car companies is more focused on the Chinese market, maintaining a share of the Chinese market, rather than seeking cooperation in the European domestic market or global market.
Especially in terms of intelligent and networked technologies, international car companies are more cautious and less likely to use Chinese products or technologies to empower their products due to issues related to big data and relevant laws and regulations.
The Chinese automobile market is currently the world's largest market, which is a territory that no international automobile company will give up. With the empowerment of intelligent and networked technology, China's new energy vehicles are also at the forefront of the world's automobile industry. Traditional foreign automobile companies, despite having a century of entrepreneurial history, innovative and iterative research and development capabilities, and tens of millions of loyal fans, still take advantage of the market's trends and dynamics, and make up for their shortcomings A realistic attitude towards development and progress Zhang Hong pointed out that it is optimistic to see that Chinese car companies have the opportunity to export new energy vehicle technology to the international market. But at the same time, we must also objectively and rationally consider how foreign brand car companies choose their partners, why they choose these partners, and the trend of emphasizing the light asset operation model