Cheng Yuan: Why does the autonomous car company “engage the sideline business”?

Cheng Yuan has something to say:

Recently, the media’s “advancement of sidelines” for self-owned brand companies is that, outside of the “professional business” of making automobiles, reports that they have entered other related or unrelated businesses related to the automotive industry are heating up, and they are referred to as “not doing business”. For example, Chery entered the field of shipbuilding, heavy machinery, and coal mining; JAC played securities and bank financing; Foton Motor extended its business to refined oil sales, heavy machinery manufacturing, and Internet of things, and financial investment.

Faced with the “multiple development” and “outside-the-border gain” of car companies, some people are worried that they will not be able to disperse their energy and dilute the main business of building cars.

The author believes that this diversification of business extension or transformation is more common in the corporate world and is not unique to the auto industry. Indeed, many companies have not succeeded in diversifying their businesses. Instead, they have lost their old business lines. “The case of stealing chicken and throwing rice away” is tilting up, so people’s concerns and concerns are justified; but at the same time There should also be no shortage of winners.

The “diversified management” of enterprises is commonplace in the international community. Some companies are at a stage where diversification is adopted because they do not see the direction. In fact, they are a space for themselves to choose; some enterprises are to achieve a certain scale. If you feel that you have excess energy, you want to expand your field; some of you are prepared to make a transition, and in particular you do not rule out the adjustment of the main business in the course of development. Now China’s leading real estate leader Vanke Group, when it was incorporated in 1984, was an importer of video equipment. He said that it is a small-scale trading company that has turned household appliances. Later, he developed into investment in chain retail, film production, and laser video discs. He also involved in medical research. At one time, he also operated mineral water. However, he actually entered the real estate industry later, and he was considered a “rising star”. The earliest flagship product of the French Peugeot was the gadget to grind the pepper noodles, while the Japanese Toyota started to do the textile machine. Let us take a look at the famous enterprises in the Chinese home appliance industry. The peony, Xoceco, and Panda of the TV set, and the Wanbao, Xiangxuehai and the stars of the refrigerator are in the market today. Today's leading companies such as Haier, TCL, etc. did not attract attention. Therefore, it is not impossible for the company to shift its main business to become a leader in the industry.

An industry should have its own instincts and there will be fresh blood supplements before it will be full of vitality. A company can also have a variety of choices in the process of growth, and it can continue to adjust until it finds the most suitable direction for its development. It does not have to be a lifetime at all, and it has to be with the industry.

From this perspective, Chinese auto companies can do something else. If they can be bigger and stronger in other areas, there is nothing wrong with leaving the auto industry. One of the major problems in the Chinese auto industry is precisely that it cannot enter casually, nor can it be arbitrarily opened. The barriers to entry are high and the threshold is higher. Therefore, only so many “zero-yield” companies will emerge. The phenomenon appears. Because of this, in a very long period of time, China's auto industry has almost no competition, and the strange phenomenon that the price of the vehicle is several times higher than that of the international market will emerge.

For Chinese auto brands, there is another reason for entering other industries. The profit margin of the auto industry is very thin. There are self-branded corporate executives who ridicule and quibble about “auto sales of cats” and “car prices for selling cabbage”. If a carmaker does not make money, it has to think of “strange moves” and enter some areas with relatively large profit margins. “To support the owners” is a last resort.

However, judging from the current situation, the "by-products" of automobile companies basically belong to the scope of industry, which is good for China's economic development, such as the sale of oil by Foton, Chery shipbuilding, and the capital of those who do business. Take out and invest a hundred times in speculation.

For a company, the first priority is to survive, to ensure the basic living conditions of employees, to ensure the operation of the upstream and downstream supply chain, and after-sales service ... In a word, the first enterprise must be able to live, the second is development, Therefore, entering an industry with high profit margins and earning money to back up a car is an idea.

As for the fact that someone corrects the name of a company to build a car, and it does so, it is a question of government supervision. It was originally for the enterprise to have a clear rule on the use of land, and it cannot be used for transfer. In addition, some local governments deliberately indulged in violations of laws and regulations by increasing their GDP in order to compete for investment.

If we really want to build a "car powerhouse," the government should provide independent brand enterprises with the conditions for peace of mind to develop their main business, so that they can focus on the car with one mind and one mind.

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