Shangchai shares: benefiting the revitalization of the automotive and equipment manufacturing industry

Shanghai Diesel Engine Co., Ltd. manufactures diesel engines as its main business, which is gradually developed from the construction machinery market to the automotive market and construction machinery market. At the same time, as an auxiliary producer of the automobile and construction machinery industry, it is expected to benefit from the national government's adjustment and revitalization plan for the automobile industry and equipment manufacturing industry.

In addition, after SAIC Motor became the controlling shareholder, SAIC Motor Co., Ltd. became SAIC Power Base, which complements SAIC Motor's products and creates a synergy effect. While maintaining the status of the major power supplier of construction machinery, Shanghai Diesel Engine Co., Ltd. will rely on SAIC Motor’s strong position in the vehicle field to become a diesel engine accessory company of Shanghai Automotive Co., Ltd., as well as a commercial vehicle series with independent intellectual property rights. The vehicle power platform provides a wide range of products for more vehicle manufacturers. In the field of automotive diesel engines, Shanghai Diesel Engines will focus on the development of research and development capabilities coordinated with the development of Shanghai Automotive Commercial Vehicles, with the goal of forming a series of commercial vehicle power platforms with independent intellectual property rights, and creating a power base for Shanghai automotive commercial vehicles.

1, included in the SAIC layout. Shanghai Electric’s shareholder, Shanghai Electric, transferred its 242 million shares (9.23 billion yuan, accounting for 50.32%) of the company’s shares to Shanghai Automotive. The Shanghai Automotive Industry (Group) Corporation, a SAIC shareholder, is one of the three largest automotive groups in China. It is principally engaged in the production, sales, development, investment, and related automotive service trade and financial services of passenger cars, commercial vehicles and auto parts. In 2006, SAIC Motor Group sold more than 1.34 million complete vehicles, ranking first in sales of the National Automobile Group. In July 2007, SAIC Group was ranked 402th among the Fortune Global 500 companies with consolidated sales revenue of US$18.01 billion in 2006.

2. To expand the market: After SAIC’s acquisition is completed, Shanghai Diesel Engine Co., Ltd. will shift from the construction machinery market to the automotive market and the construction machinery market. In the field of non-vehicle diesel engines, it will continue to be an independent supplier of multi-field diesel engines, provide various products for construction machinery, small and medium-sized ships and generator sets, maintain the status of major power suppliers for construction machinery, and develop into production and sales scale and technology level. Leading multi-field diesel engine suppliers; and focusing on the development of vehicle diesel engines and the coordination of the development of Shanghai auto commercial vehicles, becoming the power base for Shanghai auto commercial vehicles, forming a commercial vehicle series power platform with independent intellectual property rights.

3. Complementary self-owned brands: Shanghai Automotive Co., Ltd., which is committed to becoming a leading company in China's vehicle manufacturing industry, will have its own brand of engine after the acquisition and will complement the existing products of Shangchai to meet the needs of the comprehensive development of commercial vehicle business. To build a core component system for the commercial vehicle sector. It is beneficial to the development of SAIC Motor’s own-brand commercial vehicle business; it is conducive to the rapid development of engine research and development capabilities, and integrates Shangchai’s existing comprehensive sales service system, parts manufacturing system and supplier network into Shanghai Automotive’s own-brand commercial vehicle service system. , improve competitiveness.

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