From "Car City" to "Smart Car City" | Research on the Development of China's Automobile Industry (Guangzhou Edition)

Guangzhou is an important automobile manufacturing center in South China, with a complete automobile industry chain. As one of the leading cities in the domestic automobile industry, Guangzhou has gathered well-known vehicle manufacturers such as GAC Passenger Car, GAC Honda, GAC Toyota, and Dongfeng Nissan, with an annual output of nearly 3 million vehicles. In the new wave of changes in the automobile industry, Guangzhou seizes the key opportunity period for the development of intelligent networking and new energy vehicles, strives to create an innovative gathering place for the automobile industry with extensive influence, and accelerates its progress towards the goal of a trillion-level "smart car city".

1. Complete vehicles and supply chain

The production of passenger cars has ranked first in the country for seven consecutive years. Since 2017, the production of passenger cars in Guangzhou has been above 2.5 million, ranking first in the production of passenger cars in cities across the country. According to the data of Gasgoo's Gaia system, Guangzhou's passenger car production in 2023 will be 2.956 million, a year-on-year increase of 5.9%, accounting for 11.3% of the country's passenger cars, basically reaching the level of "one out of every 10 cars is made in Guangzhou". At the same time, the scale of development of Guangzhou's new energy vehicle industry has continued to expand in recent years. In 2023, the production of new energy passenger cars will be 632,000, a year-on-year increase of 1.1 times, of which GAC Aion's production will contribute 79% and Xiaopeng Motors' production will contribute 12%. The penetration rate of new energy passenger cars in 2023 will be 21.4%, an increase of 10.7 percentage points year-on-year, but it is still far below the national average of 34.8%.

Looking back at the development of Guangzhou's automobile industry, it can be roughly divided into four stages: independent exploration, joint venture trial, joint venture rise, and independent brand rise. In the independent exploration stage, Guangzhou's automobile industry was mainly based on the manual workshop production model, mainly producing passenger and freight vehicles, mainly to meet the needs of urban public transportation, with small scale and low technology. With the deepening of reform and opening up, Guangzhou's automobile industry entered the joint venture trial stage and actively introduced foreign capital and technology. On March 15, 1985, Guangzhou Automobile Factory and five other companies including French Peugeot Automobile jointly established Guangzhou Peugeot Automobile Company. During this period, Guangzhou's automobile industry tried to adopt the Ford system production method and actively carried out Sino-foreign joint ventures and cooperation, becoming the "one small" among the "three big and three small" automobile bases in the country. Overall, the industry was driven by foreign capital and mainly assembled parts from abroad, with relatively backward technological innovation, small production and sales scale, and an annual output of up to about 20,000 vehicles.

After 13 years of development, Guangzhou Peugeot Automobile Company went bankrupt, but Guangzhou's automobile industry began to enter the third stage of "joint venture rise". In 1998, 2001 and 2004, the Sino-Japanese joint ventures GAC Honda, Dongfeng Nissan and GAC Toyota were established in Huangpu District, Huadu District and Nansha District of Guangzhou respectively. In 2005, GAC Group was established. In 2006, GAC Honda Zengcheng Factory was officially completed. During this stage, Guangzhou actively introduced Japanese brands, joint venture car companies emerged, and lean production methods (Toyota production methods) were generally adopted, ranking among the top "six major automobile production bases" in the country. The automobile industry chain continued to extend, technological innovation continued to break through, and the scale of production and sales rose rapidly. By 2009, Guangzhou's automobile production capacity reached 1.164 million vehicles, accounting for 8.4% of the country, ranking first in the country.

After experiencing the success of the joint venture, Guangzhou began to pay attention to the development and innovation of its own brands. GAC Group actively promoted the construction of its own brands and launched competitive brands such as GAC Trumpchi and GAC Aion. In 2010, GAC Group built the GAC Research Institute, and GAC Trumpchi was completed and put into production in Panyu; in 2012, the BAIC project settled in Zengcheng, Guangzhou; in 2017, GAC Aion set up a factory in Panyu; in 2020, Xiaopeng settled in Huangpu. During this stage, Guangzhou's automobile industry invested a lot of resources in technology research and development and brand building, and its own brand models gradually occupied a place in the market. At the same time, Japanese brands are not active in the electrification transformation, and their own brands are accelerating the pace of industrial transformation. The upgrading of Guangzhou's automobile industry depends entirely on its own brands.

Data source: Gasgoo's "2024 China Mainstream Automotive Enterprises Layout Map"

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At present, Guangzhou has gathered seven passenger vehicle manufacturers, including GAC Honda, GAC Toyota, Dongfeng Nissan, GAC Passenger Vehicle, GAC Aion, Xiaopeng Motors, and Beijing Auto. According to the forecast of Gasgoo Automotive Research Institute, the passenger vehicle production capacity of Guangzhou is expected to be close to 3.5 million in 2024, of which Dongfeng Nissan Guangzhou has a planned production capacity of 600,000, GAC Honda Guangzhou has a planned production capacity of 890,000, GAC Toyota has a planned production capacity of 1 million, GAC Aion Guangzhou has a planned production capacity of 400,000, GAC Passenger Vehicle Guangzhou has a planned production capacity of 350,000, Xiaopeng Motors has a planned production capacity of 120,000, and Beijing Auto Guangzhou has a production capacity of 100,000. It is estimated that the production of passenger vehicles in Guangzhou will exceed 2.45 million in 2024, of which the production of new energy passenger vehicles is expected to exceed 550,000. It is expected that GAC Aion will contribute 61% of the new energy production, Xiaopeng Motors will contribute 21%, and GAC Passenger Vehicles will contribute 10%.

Production capacity planning of passenger car manufacturers in Guangzhou in 2024

Data source: Gasgoo Automotive Research Institute forecast database

From "Car City" to "Smart Car City". Guangzhou implements the strategy of "manufacturing first, manufacturing city", promotes the transformation and upgrading of the automobile industry, creates a trillion-level automobile industry cluster, and accelerates the transformation from a manufacturing city to a "smart manufacturing" city. Guangzhou is one of the three major automobile production bases in the country. It is also a national foreign trade transformation and upgrading base (automobiles and parts), a national energy-saving and new energy vehicle demonstration and promotion pilot city, a national demonstration area for intelligent networked vehicles and smart transportation applications based on broadband mobile Internet, and the first batch of "smart city infrastructure and intelligent networked vehicles coordinated development" pilot cities. At present, Guangzhou has formed a complete industrial chain with vehicle manufacturing as the core, parts companies gathering, and start-up companies constantly nurturing.

However, for a long time, Guangzhou's automobile industry still has the structural contradiction of "strong complete vehicles and weak parts". In 2022, the ratio of complete vehicles to parts in Guangzhou's automobile industry will be only 1:0.47, which is far lower than the ratio of 1:1.7 in developed countries with automobile industries. In order to accelerate the layout of the core automotive parts industry and promote the stability, supplementation and strengthening of the automotive industry, Guangzhou has focused on optimizing the regional industrial layout and building strategic emerging industrial clusters such as intelligent network and new energy vehicles. From the perspective of spatial pattern, Guangzhou's intelligent network vehicle industry cluster has initially formed a "one core and three poles" situation. Among them, the "one core" is the GAC Intelligent Network New Energy Industrial Park, which has the advantages of the entire industrial chain such as research and development, design, manufacturing and testing, and demonstration application of complete vehicles and key parts; the "three poles" include three industrial clusters in the east, north and south, with an output value of more than 100 billion yuan. As the "chain leader" enterprise in the intelligent network and new energy vehicle industry chain, GAC Group uses the GAC Intelligent Network New Energy Industrial Park as a development engine to actively promote the localization of core parts. GAC Aion has an annual production capacity of 400,000 new energy vehicles, playing a leading role in the whole vehicle industry, and has promoted the operation of multiple industrial chain projects in the park, including GAC Aisin, GAC Times, GAC Parts Industrial Park Phase I, GAC Yanfeng Plastic Omnium, etc. By strengthening and optimizing the "chain leader" enterprises, it has not only driven the vigorous development of upstream and downstream industries, but also successfully built a development pattern of "one enterprise leads one chain, and one chain forms one area".

According to statistics from Gasgoo Automotive’s supply chain platform, there are a total of 31,844 automobile industry chain-related enterprises in Guangdong Province, of which 4,405 are in Guangzhou. Among the automobile industry chain-related enterprises in Guangzhou, the largest proportion is electronic and electrical enterprises, with a total of 922, accounting for 20.9%; followed by general process enterprises, with a total of 465, accounting for 10.6%; there are 387 electrification enterprises, accounting for 8.8%, etc. The number of raw materials, intelligent manufacturing and intelligent networking enterprises all exceeded 300, ranking fourth, fifth and sixth respectively.