With the development of China's economy, more and more companies have gone abroad for overseas mergers and acquisitions. How to successfully integrate multinational companies and how to promote healthy business growth has become a problem that Chinese companies need to face when going abroad.
In March 2018, Wistron Group and Fangyuan Capital jointly acquired "Bosch Mahle Turbo System Co., Ltd." (the company was jointly established by the German Bosch Group and the Mahle Group in 2008, each invested 50%, and the headquarters is located in Germany Stuttgart), renamed it BMTS Technology, and began to expand globally. What are the stories behind this? A few days ago, in Gasco's latest "C Talk Struggle 2019" series of interviews, we interviewed Mr. Cai Fang, the director of Vivatron Group and the head of BMTS global market sales and strategic development.
Mr. Cai Fang, Director of Wistron Group, Head of Global Market Sales and Strategic Development of BMTS
Global expansion
With the overall decline of the Chinese auto market today, most companies in the automotive industry have been affected. BMTS has grown against the trend and is constantly expanding its production capacity worldwide. In the past year, it has successively invested in new plants and expanded production capacity in Ramos Arizpe, Mexico, NoviSad in Serbia, and Dongying and Jinan in Shandong, China.
Cai Fang said: "The expansion of production capacity itself is a market-driven behavior. In the past two years, BMTS has obtained a lot of new orders and will start to focus on the market in 2021. The company's existing business is also climbing and needs to invest in new production capacity. To meet the market order demand. On the other hand, when the economic cycle is down, it can more economically establish all aspects of production factors. In fact, we think it is a good opportunity for investment. "
BMTS Shandong Jinan Plant has commenced production on September 23, 2019
Cross-border M & A
Bosch and Mahler Group sold the turbocharger business in 2017, which is the core technology of internal combustion engines. With the rapid development of new energy sources such as batteries, what is the investment strategy behind buying this company at this time?
Cai Fang said, "BMTS is a German company with deep technical and genetic resources. We started negotiations with the original shareholders Bosch Group and Mahle Group in early 2017, but before that, we had a deeper understanding of its business. .This product has few manufacturers that can compete in the global automotive market because of strict working conditions. Both Bosch and Mahler are top companies we respect in the industry. In the past development, they A lot of research and development investment has been made, and many patents have been reserved in high-temperature materials, turbine bearings, aerodynamics, etc., and have been recognized by major customers in the automotive industry around the world. This is a solid foundation for the company's development. External market On the other hand, environmental regulations are also driving auto makers to increase turbo penetration on a large scale to ensure future market growth. These are the main reasons we decided to acquire. "
In short, the company has established product technology advantages, has been recognized by customers, and the overall market size has continued to grow, which provides good conditions for enterprise development. However, for investors, in addition to investing funds, a lot of intensive integration work has also been performed after the acquisition of BMTS. According to Cai Fang, BMTS faces many challenges after the settlement. About 65% -70% of the components in the value chain of turbocharged products are outsourced. The original supply chain cost of BMTS was high, which seriously affected the company's financial performance.
"After taking over, we took a lot of actions to promote the rapid cost reduction of existing suppliers and promote the shift of the supply chain from high-cost regions such as Europe and Japan to low-cost regions such as China and India. At the same time, for the purchase of the highest value turbine casings, We have integrated the Weichuang Group's stainless steel factory in Dongying, Shandong into BMTS to deeply integrate the supply chain. At the same time, we will continue to develop new suppliers while counseling existing suppliers to reduce costs through a professional technical team. "
In addition to supply chain issues, the previous governance structure of BMTS was relatively complicated in terms of management and operation processes, requiring a large number of internal approval and reporting processes, which took up a lot of time and energy of the management team. This undoubtedly brings some hidden costs. "We lead the global team directly, simplifying the management process, promoting simple, direct, and fast decision-making methods, which improves the efficiency of management and reduces internal management costs."
Based on such initiatives, the financial performance of BMTS has improved rapidly. It is understood that after 6 months of acquisition, BMTS turned a profit around the world. It was also after this that the BMTS opened the way for expansion.
Technical route
Today, global emissions regulations are being tightened. As far as China is concerned, the National Six A has been introduced. National Six B will also be launched next year, and National Six B is stricter than Euro 6 in terms of particulate matter and NOX. In this case, to meet regulatory requirements, small displacement turbocharging is the most important technical route.
Cai Fang said: "The technical advantage of BMTS is its small displacement, which has developed and put into production for Volkswagen, GM, BMW, PSA, as well as SAIC, BAIC, Great Wall, etc. These customers' demand for turbocharging is increasing. . At present, the penetration rate of turbocharging in the Chinese automotive market is about 50%, and after the emission of national six regulations, and the emission standards are further tightened, the future penetration rate of turbocharging will further increase to 75%. Above, the market has a lot of room for growth. "
The demand for turbocharging will further increase, to a certain extent, the capacity of BMTS needs to be further expanded. However, while capacity expansion, the ability to control future technology development trends is even more important.
As a technology leader in the field of turbocharging, BMTS has a deep understanding of the development trend of turbocharging technology. Cai Fang said that in the future, turbocharging needs to reduce fuel consumption, thereby reducing carbon dioxide emissions, driving pleasure, compliance with emission standards, excellent service life, and best operating characteristics. There are two major trends in technical solutions. :
First, Miller cycle + gasoline engine variable cross-section turbocharging technology. "By increasing the compression ratio, the Miller cycle combined with variable cross-section turbocharging technology can save 10% -15% of the oil on the existing basis. The corresponding emissions can be further reduced. BMTS is concentrating resources to cooperate with global customers to put this technology into production "In the next two years, the market will see the solution begin to be used in batches."
As far as BMTS is concerned, the company has developed a new generation of floating variable-section turbochargers. Compared with traditional turbochargers, the variable-section turbocharger floating design concept is suitable for gasoline engines. High exhaust temperature (up to more than 1000 degrees), good thermal stability, and can reduce the clearance of the guide vanes (about 30% compared to traditional designs), making the supercharger more efficient and effective Mitigate "turbo lag". With FNT technology, the internal combustion engine can reduce energy consumption and pollutant emissions while improving energy conversion efficiency and driving pleasure for users.
Second, 48V + E-turbo (electronically assisted turbocharging). "In the medium and long term, electronically assisted turbocharging is applied to 48V hybrid systems, which can drive some relatively large cars with higher output power. At the same time, the remaining energy of the turbine exhaust gas can also be used to charge the battery, which can meet the next generation Emissions regulations. Car companies will begin full-scale deployments around 2024 to 2025. "
BMTS has also invested a lot of resources in E-turbo technology. The newly developed E-turbo will further reduce the fuel consumption of small cars and medium-sized SUVs, and at the same time will be more fun to drive. It is said that its 1.5T electronic turbocharged engine has an output of 180KW and is capable of replacing the current 2.0T engine.