【Big Talk About Cars】The reconstruction of the automobile industry system will bring unlimited opportunities

Since the outbreak of the international financial crisis in 2008, the global economic recovery has been difficult and tortuous, and the trends of major economies have diverged. The downward pressure on China's economy continues to increase, and multiple difficulties and challenges are intertwined. At the same time, the technological revolution brought about by the emergence of computer information networks is giving birth to the third world-wide industrial revolution. Industry insiders generally believe that under the background of major changes in the world economy and industrial revolution, the traditional automobile industry has entered the process of system reconstruction. With the concentrated emergence of various new technologies, new ideas, and new models, confusion and attempts, subversion and integration are constantly connected, which will bring unprecedented opportunities to the automobile industry.

New energy and smart interconnection as the starting point

When the number of cars in use reached a bottleneck, and the pressure on transportation, environment, safety and energy brought by cars increased, cars were once considered a sunset industry, but the fact is that the development of global cars has never stopped. Wang Xia, chairman of the Automotive Branch of the China Council for the Promotion of International Trade, believes that the automotive industry is experiencing a historic transition from a sunset industry to a sunrise industry.

The reason is that the market has shifted from developed countries to developing countries, which has continued the development space of the global automotive industry. Emerging markets led by China have provided new possibilities for the sustainable development of the automotive industry. Secondly, the transformation of automotive technology and the extension of its functions have provided a new engine for the global automotive industry. The rapid rise of new energy vehicles and smart connected vehicles will allow cars and humans to build a more harmonious social ecology.

When modern automobiles have the dual attributes of both the technology industry and the fashion industry, their development potential must be re-evaluated. "As one of the most important components of the automobile industry, China not only has the world's largest automobile market to rely on, but also has more than 100 years of automobile civilization to learn from, and has epoch-making tools such as new energy vehicles and smart connected vehicles to use. It can be said that we have caught up with the best era. China's manufacturing industry should seize this rare historical opportunity to realize the transformation of the automobile industry from big to strong.

Chinese automakers need to make up for their manufacturing shortcomings

China's auto industry can borrow strength, but it cannot be powerless. Take interconnected intelligent technology as an example. The more powerful functions and performance extensions it brings to cars, the higher the requirements for the basic manufacturing quality of cars will be. Otherwise, failures will increase exponentially.

The blueprint "Made in China 2025" proposes that industrialization is the core of modernization, and that expanding and strengthening the manufacturing industry is the only way to complete industrialization. Wang Xia said, "Developed countries have launched 're-industrialization' strategies, and emerging economies are also dreaming of becoming manufacturing powers, so China must rapidly expand and strengthen its manufacturing industry under such double pressure."

In this process, the new generation of information technology must be deeply integrated with the manufacturing industry. In addition to contributing to product functionality and user experience, it must also be deeply involved in the manufacturing process, contribute to intelligent manufacturing, contribute to improving product quality, and contribute to improving the efficiency of R&D, production, management, marketing and services. While embracing the Internet, Chinese automobile companies must make up for their shortcomings in manufacturing in order to better integrate with emerging technologies, enjoy the upgrading momentum brought by new technologies, and build automobiles into a representative industry of high-end manufacturing.

Xu Heyi: New energy is a development opportunity

The automotive industry has now reached a critical node: a turning point from quantitative change to qualitative change, from gradual change to sudden change. Xu Heyi, chairman of BAIC Group, believes that "the traditional automotive industry has entered the third development stage where it has invested a lot but is difficult to make progress. If the traditional development model is still used, the road will become narrower and narrower. The third technological revolution represented by new energy and electrification has provided a new development direction for the automotive industry, which is two huge development opportunities."

In May this year, the State Council released the "Made in China 2025" strategy, which mentioned that by 2020, the annual sales of pure electric and plug-in new energy vehicles of domestic brands will exceed 1 million, and by 2025, the annual sales of new energy vehicles will reach 3 million. "The spring of China's new energy vehicles is just around the corner." Xu Heyi is convinced of this. "Pure electric drive, as the main technical route of China's new energy vehicles, is more worth looking forward to in the future. The two goals proposed by "Made in China 2025" are more than enough to achieve."

Change is an inevitable challenge, but also an opportunity to break the old and establish the new. According to reports, BAIC Group is currently making every effort to promote strategic transformation. We will take the reform of the R&D system as a breakthrough point to achieve the transformation from a traditional automobile enterprise driven by general factors to an innovative enterprise driven by intellectual resources.

Xu Heyi asserted that at least 20% of China's automakers will be eliminated in 2020, some through natural elimination and some through mergers and acquisitions, and a new round of mergers and reorganizations among domestic companies will definitely accelerate. "If we are more radical, this proportion may reach 1/3. As for what kind of automakers will be eliminated? From a macro point of view, companies with slow technological progress and poor innovation capabilities will definitely be eliminated," Xu Heyi said.

Focusing on the topic of "Innovative Thinking, Win-win Cooperation", Zeng Qinghong, General Manager of GAC Group, said, "With the deepening trend of economic globalization, the equity ratio of my country's automobile joint ventures will be liberalized sooner or later, and the original joint venture model may change. But under the current situation, independent brands and parts companies should enhance their core competitiveness."

Under the guidance of industrial policies over the past 30 years, joint ventures have achieved remarkable results. In 1985, both the number of cars in stock and the number of cars sold were only 280,000, while now the number of cars in stock is more than 110 million. Parts, after-sales services, and financial upstream and downstream have all developed through joint ventures. At the same time, joint ventures also have problems with market exchange for technology and brand strategy.

Zeng Qinghong pointed out, "At the beginning of the cooperation, China wanted to give up the market and hope that foreign capital would come in to exchange technology, which is difficult to achieve. Now the joint ventures are facing the problem of whether to relax the equity ratio. Some car companies, whether Volkswagen, General Motors, or Japanese and Korean companies, more than 50% of the profits of the head office come from China. Relaxing the equity ratio can only relax the interests."

The market is definitely the dominant factor in resource allocation. The liberalization of joint venture equity ratios is a trend, but based on the current development situation, it is not the right time to do so. He further explained, "The key to liberalizing joint venture equity ratios is how to improve market mechanisms and laws and regulations. In addition, after independent brands have been absorbed and digested by joint ventures and developed in all aspects, it is time to liberalize equity ratios."

In addition, Zeng Qinghong also pointed out that the cooperation between Chinese auto enterprises and foreign enterprises should be based on capital, and resources should be shared and complemented to achieve win-win results, including mutual shareholding, strategic alliances, capital cooperation, etc. In addition to cooperation in production, operation and technology, domestic and international resources should be utilized to master core technologies and strive to create a group of enterprises and well-known brands with international competitiveness.