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Roland Berger Shen Jun: parts industry should pay attention to opportunities overseas acquisitions

September 7, Roland Berger Strategy Consultants (Shanghai) Co., Ltd. Shen Jun, vice president of Greater China in the "5th (2011) China International Auto Parts Development Summit Forum" have spoken, the level of the overall development of China's auto parts industry or even much lower than China's own brand of vehicle manufacturers that together, so this is a big problem. Parts of overseas mergers and acquisitions of industrial development opportunities, but from the perspective of global research, mergers and acquisitions for more than 75% of which were unsuccessful, so the acquisition is subject to caution.

    The importance of parts industry

    The meeting, Shen Jun in the automotive parts industry for industry's role in the development of highly positive. Shen Jun that China's auto industry had the theme of "build their own brands." However, own-brand car companies, if not grasped the core technology components, profit margins will be very low.

    "We did a statistical, independent brands currently sold in the Chinese market share is roughly 1 / 3, but the share of sales accounted for 20 percent, ten percentage points less, why? Are more low-end models, high side rarely, if look at the profit contribution, the contribution of only 10%, 90% are international brands, it means that despite its own brand for 1 / 3 market share, but profits for only 1 / 10, largely affected to its own brand of sustainable development. the one with the industrial development of the weak parts are related. "Shen Jun says.

    Overseas M & A opportunities

    At present, China's auto parts industry's overall level of development, well below China's own brand of vehicle manufacturing industry standards. Aware of this, the state's industrial policies also tend to lead China's auto parts industry. It can be said that China's auto parts industry, not just bigger but also stronger, to master the core technology, and this, to strong overseas acquisition is a way.

    "A lot of the core technology is not in the vehicle assembly plant, but the core lies in the hands of the leading parts supplier International mergers and acquisitions in which the future will become increasingly popular, how to get through some of the leading international mergers and acquisitions of technology, how to find some favorable opportunity to find some potential targets, this will become a very hot topic of Chinese enterprises. "Shen Jun says.

    Care mergers and acquisitions to be successful

    Although aware of the acquisition is an important opportunity for development, but from the perspective of global research, mergers and acquisitions for more than 75% of which were unsuccessful. Merger failure, one strategic goal is not clear, the second is caused by over-bidding price was unreasonable overestimate, and the lack of effective post-merger integration initiatives, resulting in the loss of key personnel.

    In this regard, Shen J, from the perspective of strategic consulting, mergers and acquisitions for the parts made several recommendations. First of all, should be based on the actual situation in the different stages of development, choose the right integration strategy. Second, the integration of corporate culture for the failure of mergers and acquisitions play a key role in many merger and acquisition failure is largely due to failure to deal with cultural differences. Finally, effective human resources, are also key factors. Should pay attention to retain key personnel, active structure of the new organization and personnel re-adjustment, in addition, a kind of protection should be set exchange mechanisms to ensure continuity of management communication.

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