What risks do auto companies need to avoid when investing overseas?

At present, there is a lack of specialized overseas investment risk assessment institutions in China to help overseas investment enterprises analyze and evaluate the feasibility of overseas investment projects, and it is difficult for enterprises themselves to correctly judge whether a project has development prospects abroad because of factors such as information channels and their own evaluation or judgment ability. Because some overseas investment enterprises did not fully and scientifically investigate the investment projects in the early stage, it led to operating losses after the project investment. Managing Risks In recent years, although some progress has been made in the transnational operation of enterprises in China, it is still very backward compared with developed countries. According to incomplete statistics, 55% of overseas enterprises in China are profitable, most of which are unproductive enterprises; The balance of payments accounts for 28%; Losses accounted for 17%, mostly for productive enterprises. China enterprises lack the experience of transnational operation, and the management system has not yet adapted to the needs of international operation, which often makes enterprises encounter unexpected risks in the process of "going global", which is more obvious in state-owned enterprises. From the perspective of management system, some overseas state-owned enterprises have not yet established a sound corporate governance mechanism, and the supervision of owners' representatives is not in place, so there is a serious phenomenon of "insider control". In the implementation of transnational business decision-making, there is a lack of risk awareness and risk control mechanism, and there is a lack of sufficient scientific demonstration in investment projects, environmental analysis, location selection, partner selection, formulation and implementation of business strategy, which often leads to major decision-making mistakes and serious loss of state-owned assets. The "China Aviation Oil" incident is the best example. From the training of management talents, China enterprises also lack a set of human resource management mechanism to meet the needs of international market competition. Many enterprises engaged in transnational operations have not yet established the concept of modern human capital, and their understanding of human resource management is still at the level of personnel system management, which leads to the low professional ability and enthusiasm of expatriates, which is far from meeting the needs of today's international market competition. Decentralized operation and vicious competition risk The phenomenon of decentralized operation of overseas enterprises established in China is serious, which not only makes it impossible for enterprises to share and complement resources in capital, technology, market, information and production, but also leads to more and more serious internal excessive competition. This shows that there is a lack of contact and cooperation between the investment matrices of these enterprises. On the other hand, under the current trend of economic globalization, multinational enterprises all use mergers or strategic alliances as development means to achieve scale effect, while China enterprises have obviously failed to keep up with this trend of transnational operation. Because the main body engaged in international operation in China is state-owned enterprises, there is still a fragmented management system, which makes it difficult for overseas branches of state-owned enterprises to carry out effective cooperation and information exchange even if there are similarities and overlaps in their business. There is a big gap between the self-mechanism of state-owned enterprises and the internationally accepted multinational corporation system, which restricts and fetters the business vitality and business philosophy of overseas enterprises, making it difficult for overseas Chinese-funded enterprises to conduct mergers and acquisitions and alliance operations in various ways like subsidiaries of multinational corporations. In the competition of the same project, China enterprises often compete for price reduction and vicious competition, so it is difficult to establish strategic alliances, which further increases the risk of transnational operation of enterprises from the inside. Facing the risks of overseas investment, what measures should enterprises and governments take? I. Measures to be taken by enterprises 1. Correctly evaluate the political and economic situation of the country where the investment is located. Enterprises should make a comprehensive evaluation of the host country's economic development, political stability and preferential policies for foreign investment before investing. After the establishment of overseas enterprises, overseas managers should also be required to provide timely information on various local policy trends for analysis by specialized agencies. The evaluation work is very professional. If the strength of an enterprise is limited, it is necessary to attach importance to the role of intermediary institutions such as consulting companies. 2. Improve the corporate governance structure. Enterprises need to strengthen and improve corporate governance, strengthen internal incentive and restraint mechanisms, actively cultivate talents, and improve the level of talent management. Developing international management requires not only professionals in finance, law, finance, technology and marketing, but also managers with strategic thinking and familiarity with modern enterprise management. At present, China lacks talents who are familiar with international rules and the laws of the host country's market. We can make up for the lack of self-cultivation by recruiting excellent international talents. 3. Give full play to the comparative advantages of enterprises. It is an important strategy for China enterprises to actively develop industries and products with comparative advantages. Through independent development, joint venture development, strategic alliance and other forms, we will vigorously promote scientific and technological innovation and strive to form the core technology of independent intellectual property rights and a strong corporate brand image. Through mergers, acquisitions, strategic alliances, etc., we will enhance the strength of equal dialogue with foreign multinational companies by means of marketization and internationalization.