What did Baowo, which went bankrupt and liquidated, leave behind for the auto industry?

Auto Information Network, April 22nd. In recent days, there have been several major new car debuts or listings, including the all-new EQS SUV, the new-generation Range Rover, the new-generation BMW 7 Series, the Weimaraner E.5, the Zhiji L7, etc., showing the epidemic situation. Under the thriving side of the automotive industry.Behind this, the bankruptcy of a car company is also worthy of attention.On April 8, Foton Motor announced that it had decided to apply for bankruptcy and liquidation in accordance with the law due to Beijing Baowo’s financial depletion and insolvency.

From acquisition to bankruptcy, why did Borgward come to this day after 8 years of "scenery", and what experience and lessons did its bankruptcy bring to the automotive industry?According to "Automobile Talk", as a state-owned holding company purchased overseas assets and entered the passenger car market with small funds, it eventually caused a loss of more than 5 billion yuan, which sounded the alarm for domestic companies to acquire overseas assets. Be careful when overtaking.

Overtaking in corners of overseas mergers and acquisitions needs to be cautious

Eight years ago, Beiqi Foton acquired the German Borgward brand for 5 million euros. Less than a year later, the National Development and Reform Commission issued an announcement approving Beiqi Foton Automobile Co., Ltd. Beiqi Foton, a commercial vehicle company, entered the passenger vehicle field through overseas mergers and acquisitions.Such overseas mergers and acquisitions are not the first time among domestic auto companies.

In 2005, SAIC acquired the intellectual property rights of some of the original MG products for about 67 million pounds. Based on this, it launched Roewe to develop its own brand, and later acquired the MG brand through the acquisition of Nanqi.After years of development, SAIC Motor has successfully opened up overseas markets with MG brand products, becoming one of the classic cases of overseas mergers and acquisitions.Geely won Volvo in 2010 for 1.8 billion US dollars. After 12 years of development, it not only made Volvo better and better in the Chinese market, but also helped the Geely brand to go further and smoother, and successfully built Lynk & Co. and Extreme Krypton, two new high-end brands.

Going back to Beiqi Foton in 2014, although it was the least expensive among several companies, it acquired Germany's Borgward for less than 35 million yuan, but you must know that Borgward was a bankrupt company as early as 1961, until it was Acquisitions are all closed down. Except for this brand, there are basically no assets available. In the past 50 years, the auto industry has not been what it was in the past.

Although not as good as Geely and SAIC in the harvest of available product technology, Borgward still experienced a brief moment of glory.In April 2016, Borgward's first model, the BX7, was launched.In March 2017, Borgward launched the new SUV BX5.The cumulative sales volume has exceeded 100,000 units in three years, which is a good result for a new brand.

But then Borgward took a sharp turn for the worse, sales continued to decline, high-level changes, and equity changes followed one after another. Borgward, which entered the Shenzhou department, did not improve. With the collapse of the capital of the Shenzhou department, Borgward also gradually moved towards a dilapidated state. edge.As for Borgward's eventual bankruptcy, according to Zhao Yun, founder of SinoAuto, Borgward's initial hot sales stemmed from just catching up with the last bus of the SUV market. An agreement was reached, and as Wang Jinyu faded out of management, Futian's support was greatly reduced.

Cui Dongshu, secretary-general of the Passenger Federation, believes that Baowo's bankruptcy stemmed from "tossing". Seeing that Jayaquan had done a good job, he wanted to pick the fruit of "victory".

It is not difficult to see that internal friction is fatal to the development of an enterprise.As a shareholder, Futian did not reach an agreement on the development of the enterprise, and finally chose to sell 67% of Baowo's shares at the end of 2018. Changsheng Xingye (Xiamen) Enterprise Management Co., Ltd. took over, and behind it was the Shenzhou Department.

Capital is ferocious like a "beast"

It is understood that Changsheng Xingye spent 4.109 billion yuan to acquire 67% of Baowo's equity from Foton, which is indeed a lot higher than the original purchase price, but the three-year car-building investment in Foton cost a lot.In 2016, Li Bin, the founder of Weilai Automobile, said that building a car is a very expensive business, and a new startup needs at least 20 billion yuan of capital to build a car.

Although Foton is not a start-up company, its investment will not be too small.If it weren't for the different voices inside, I believe that Foton would not sell it.After all, 2018 is the year of the rapid rise of new cars, and it is a good opportunity for Borgward to transform into new energy.However, BAIC Group, the major shareholder behind Foton, obviously couldn't agree. At that time, BAIC New Energy was just popular, and it was a veritable new energy sales champion car company.

As the actual operator behind Changsheng Xingye is UCAR, and behind UCAR is the famous Lu Zhengyao.After winning Borgward, UCAR has actually created an ecological closed loop, and vehicles are self-produced, sold and used by themselves.If UCAR, a listed company, can run smoothly, it is indeed a perfect car ecology.

After UCAR took over, Baowo focuses on the asset-light model of separation of production and sales. Its stores are mainly composed of "one city showroom + multiple comprehensive brand dealers".Similar to Ruixing's model, Baowo recruits franchisees to focus on online sales.But at this time, more and more Borgward car owners came out to complain about quality problems, which caused vehicle sales to continue to decline.In 2020, Borgward’s annual sales fell to 8,740 units, which is difficult for dealers to make money, which has also triggered dealers’ rights protection.

Immediately afterwards, the financial fraud incident of Ruixing Coffee, the most important U.S. listed company in the Shenzhou department, triggered a chain reaction, which eventually led to the inability of Shenzhou UCAR to continue operating Borgward, and at the same time, the final payment for the acquisition was not paid to Foton in time, and the suspension of Borgward also As a listed company, Foton Motor suffered huge losses.

On April 8 this year, Foton Motor announced that due to the depletion of Beijing Baowo’s finances, it was indeed unable to pay off its due debts, and its assets were insufficient to pay off all debts, and an extraordinary general meeting of shareholders was held to resolve to apply for bankruptcy and liquidation in accordance with the law.Foton Motor stated that a large amount of impairment provision will be made for Beijing Baowo’s loans, current arrears, guarantees and the recovery of Beijing Baowo’s equity held by the company. The above impairment is expected to affect the total profit in 2021 -4.704 billion yuan In addition, considering the company's confirmation of investment income due to its holding of Beijing Baowo's equity, it is expected that the total profit in 2021 will be affected by about -5.326 billion yuan.

From this, it is not difficult to see that Foton entered the passenger car market with small capital overseas mergers and acquisitions, and subsequently introduced market capital into the market, which eventually resulted in huge losses, and the capital was as ferocious as a "beast".Even a good project will become a financing tool and a means of making money in front of capital, and it does not necessarily mean that you really want to build a car."Steam Talk" interviewed a person who had worked at Borgward to understand the reason for Borgward's bankruptcy, and only replied with two words: capital.

Ling Ran, a senior auto commentator, believes that Borgward's collapse in Germany is not without reason, and Foton, as a commercial vehicle company, has no relevant technologies and products to support it as a passenger car after acquiring Borgward. SAIC's mergers and acquisitions are fundamentally different, and at the same time, its car-making craftsmanship is difficult to improve in a short period of time.

In fact, a large number of subsequent complaints from Borgward car owners also proved this point. Borgward has done a very poor job in terms of product reliability.After Borgward went bankrupt, the users who suffered the most were those who supported the German "Big Four" Borgward with real money.

Consumers "trying early adopters" are at risk

At the beginning, Borgward Motor's advertising slogan "expensive can be good, good can be expensive, good! Expensive!", which made it gain more than 100,000 Borgward car owners.Many car owners value the quality of "German" cars, and of course there is a lifetime free warranty.

And this promise will also be a pain for these users forever. "Steam Talk" interviewed a Borgward after-sales service provider in Beijing. The other party said that it had terminated the contract with Borgward, related maintenance can be done, and the issue of free lifetime warranty You need to consult the Borgward manufacturer.

At present, Borgward has also posted an "Open Letter to the Owners of Borgward" on its official website, indicating that Borgward Automotive Technology (Beijing) Co., Ltd. will fully undertake the after-sales service of Borgward cars.To this end, “Steam Talk” also called the service hotline issued by Baogwo to inquire about after-sales maintenance of the vehicle, and the customer service staff recommended the above-mentioned after-sales service provider for us.Regarding the cancellation of the contract we raised, the customer service said that they did not understand this matter and would go to the above for feedback.

In fact, Borgward provides a lifetime free warranty for the vehicle. If the vehicle is transferred or not regularly maintained at an authorized dealer on time, this qualification will be lost.Afte r Baowo went bankrupt, the authorized dealers no longer exist, so car owners will naturally lose this qualification, and it is more likely that they will not be able to find repair parts in the future. This bankruptcy case also reminds consumers that buying a car is risky. .

In general, the Borgward case brought a lot of experience and lessons to the automotive industry.Of course, this does not prevent latecomers from entering the game. Internet companies such as Baidu and Xiaomi are still optimistic about the future of the automotive industry.However, after the "one place of chicken feathers", it is the consumers who are hurt, which requires the functional departments to truly take responsibility and not let the enterprise break it!