Automotive Author：EqualOcean News , Boying Ji Editor：Tao Ni Mar 17, 2022 09:22 PM (GMT+8)

After completing the acquisition of Zungfu China, Zhongsheng Group has become the largest dealer of Mercedes-Benz in southern China and perhaps even the largest auto dealer in all of China

Benz

Zhongsheng Group Holdings Limited (881.HK), a top national car dealer in China, announced on March 13 that it had acquired 100% equity of Zungfu Motors China, the largest dealer group of Mercedes-Benz in southern China, for USD 1.314 billion.

Zhongsheng said it bought the equity from Jardine Matheson Holdings Limited (SGX: J36), and the final purchase price is USD14 million lower than previous estimates. 

This acquisition includes 37 stores and 10 distribution networks under construction in cities such as Guangzhou, Shenzhen, Changsha, Chongqing and Chengdu. 

Following the deal, Zungfu China will retain its working capital, 345 mu (230,000 square meters) of land, nearly 200,000 square meters of real estate, and other high-quality assets, Zhongsheng added in the announcement.

According to the data released by China Automobile Dealers Association (CADA) on the top 100 auto dealerships in China on May 28, 2021, Zhongsheng ranked second, after China Guanghui Automobile Group.

According to the financial statements of China Guanghui Automobile Group and Zhongsheng Group in 2020, when data was last available, Guanghui sold 1.02 million cars in 2020, ranking first among Chinese car dealers with a revenue of CNY157.281 billion (USD24.796 billion). Zhongsheng came in second, with 610,000 units sold, generating CNY148.348 billion in revenue.

 "As the scale of network and revenue will further increase, Zhongsheng Group is expected to surpass Guanghui to become China's largest dealer group in 2022," Song Tao, deputy secretary-general of CADA, said in an interview with Jiemian, a business news outlet.

Zhongsheng Group’s announcement shows that in January 2022, the sales  of Zungfu Mercedes-Benz segment increased by 35% year-on-year, with revenue up  38% and total profit jumping 78% over the last year. Zungfu is a major distributor of the Mercedes-Benz brand.

Zungfu China's parent company, Jardine Matheson, is the second largest shareholder of Zhongsheng. After the acquisition, Jardine will hold more shares of Zhongsheng, while Zhongsheng will also become the only listing platform for Jardine's dealer assets in China, Jiemian reported.

According to Jiemian, this acquisition will further strengthen the position of the Zhongsheng in southern and western China, helping to expand the market share of the Mercedes-Benz brand in the two major regional markets for luxury cars in China.