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Anhui Jianghuai Automobile Co., Ltd. (hereinafter referred to as "Jianghuai Automobile") signed a joint venture agreement for medium, heavy truck and engine in Beijing. Zuo Yanan, chairman of Jianghuai Automobile, said in his speech that this is "the highlight of Jianghuai Automobile's 12th Five-Year Plan structure adjustment and product upgrade."
Statistics from the China Association of Automobile Manufacturers show that from January to August this year, JAC's medium and heavy truck sales accounted for only 1/8 of its total sales. During the “12th Five-Year Plan†period, Jianghuai Automobile plans to develop R&D and manufacturing capacity for 1.5 million vehicles, while the production capacity of medium- and heavy-duty truck joint venture projects is only 80,000 units in a single class. So, how do you understand the "emphasis"? 
By analyzing these two joint venture projects in the overall situation of Jianghuai Automobile Development, we can easily understand the deep meaning of Zuo Yan'an's remarks.
â– "Ocean River" has seen the shape and strength of the show
To understand the weight of the medium, heavy truck and engine joint venture projects in Zuo Yan'an, two important backgrounds are indispensable. First of all, the product layout of “Ocean River†has been basically completed.
More than 10 years ago, Jianghuai Automobile was only a small-scale commercial vehicle company. It mainly produced two types of products: passenger car chassis and light trucks. For more than 10 years, they have continued to expand their business areas and have entered the MPV (multi-function passenger car), heavy-duty trucks, China Card, SUV (Sports Multi-Purpose Vehicles) and sedan market, and are similar to Nanjing Iveco and Jiangling Transit. Commercial vehicles will also be available soon. At the same time, its parent company, Anhui Jianghuai Automobile Group Co., Ltd. (hereinafter referred to as "Jianghuai Group") has successively entered large and medium-sized passenger cars and mini-vehicle manufacturing fields through asset restructuring.
Nowadays, JAC Group has become a comprehensive self-owned brand automobile group that has a full range of products for passenger cars and commercial vehicles, and has initially established a research and development, manufacturing, supporting and marketing system that supports the development of the entire product line. As its core business, from January to August this year, Jianghuai Automobile Co., Ltd. sold a total of more than 300,000 vehicles of various types, an increase of 52.6% year-on-year. The annual sales of automobiles are expected to reach 500,000 vehicles.
After the completion of the entire product line, how to become stronger has naturally become the highlight of the development of the JAC Group and JAC.
â– Product advantages are not prominent and need to focus on strengthening
Zuo Yan'an's next goal has been made clear: Let Jianghuai Group become a comprehensive automotive company with a self-owned brand of one million cars. In the domestic automobile industry, it will be the first time for its own brand integrated auto companies.
The problem is that although JAC Group can produce all kinds of automobiles, its overall strength is not strong, its core business advantage is not prominent, and it ranks behind in the domestic automobile groups. Jianghuai Automobile also has similar problems. This is another important background for joint venture projects of Jianghuai Automobile Middle, Heavy Truck and Engine.
JAC's MPV and passenger car chassis sales all rank first in the industry. However, these two market segments do not have a large capacity, and there is limited support for stronger companies. According to the statistics of China Association of Automobile Manufacturers, from January to August of this year, the sales volume of MPV in China was 274,000, which only accounted for 3.2% of the total passenger vehicle sales; the chassis sales of passenger cars were 55,000, accounting for only 1.9% of the total sales of commercial vehicles.
The light truck is the largest commercial vehicle variety in China. At present, Jianghuai Automobile has formed a series of high-, medium-, and low-end light trucks in the three major series of Shuai Ling, Jianghuai Bell and Jianghuai Fortune. Its sales volume ranks second in the industry, and its growth rate is also fast. However, the sales volume of JAC light trucks is one-half lower than that of Foton Motors. The development of high-end light trucks also lacks high-end light diesel engine resources, and the pressure to improve quality and increase the share is not small.
In other market segments, JAC Group has no obvious advantage. To be strong requires a lot of capital, technology, and human input. In the case of comprehensive operations and limited resources, the average force is obviously not able to do so, and the focus must be given.
At the signing ceremony of the joint venture project, Zuo Yan'an’s sentence also supported the above judgment. In response to the question “Why did Jianghuai Co., Ltd., which has always insisted on independent development, take the lead in Sino-foreign joint ventures in the medium and heavy truck sector,†he said: “We must concentrate on strengthening our core business.â€
It is not difficult to speculate that the limousine with a large market space and strong driving force, and the light truck with rich experience and rich accumulation of Jianghuai, are the core businesses referred to in the Zuo Yan'an dialect.
â– Take advantage of external forces to strengthen their own joint venture
The core business needs to be grasped, and other services cannot be lost. Otherwise, the goal of strengthening the "Ocean River" will not be realized. There is only one approach, integrate resources in a broader market, and strengthen the strength of “Ocean River†through mergers and acquisitions, joint ventures, and cooperation.
In this respect, Jianghuai Group has had successful experience. Through the reorganization of assets, the JAC Group will take the Ankai passenger car and the Jianghuai passenger car to the top, and the sales volume of large and medium-sized passenger cars will enter the top five in the industry at one stroke, and the limelight shall be equal to the “one pass and three dragonsâ€.
This medium-, heavy-duty truck and engine joint venture project also reflects this idea. After the introduction of the first-generation model in 2003, JAC Motors upgraded Gorefax Heavy Trucks three times, which resulted in a steady increase in product sales. However, under the background that domestic mainstream heavy truck companies have introduced foreign technologies one after another, it is more and more difficult for enterprises to rely on their own strength to strengthen their heavy truck business. Combining Navistar and Caterpillar two Fortune 500 companies, Jianghuai Automobile has many advantages. First, it acquires the high-quality light diesel engine technology required for the development of high-end light trucks, and secondly, it solves the follow-up technologies for medium and heavy trucks and heavy-duty engines. The third problem is that they can enter the off-highway market such as mining vehicles. Fourth, products can enter the international market through the two companies' global marketing channels.
In an announcement released on September 17, Jianghuai Automobile stated that the first general manager of the Zhongzhongka joint venture company and the general manager of the engine joint venture company were all served by foreign parties. The intention to rely on foreign investment, external technology, and personnel to strengthen related businesses is very clear.