From high speed to high quality: How many upgrades does the automotive industry need?

On the one hand, the market is vast, the world's largest automobile production and sales country, the world's largest new energy vehicle market and other multiple auras, the scale and prospects attract companies to enter; on the one hand, the competition is intensifying, the market slowdown, the joint venture stocks are clearer than the release schedule, new Concentration of challenges such as energy subsidy policy adjustment...

On the one hand, the market is vast, the world's largest automobile production and sales country, the world's largest new energy vehicle market and other multiple auras, the scale and prospects attract companies to compete; on the one hand, the competition is intensifying, the market is slowing down, the joint-stock ratio is clear, and the new energy is clear. Challenges such as subsidy policy adjustments have come to the fore, and the Chinese auto industry is entering a subtle and profound era of change.

In this era of more open change, the market has moved from incremental to stock, and the mode of low-quality and low-cost arrogance and extensive growth has ended. However, the crisis is at the same time, and the market is turning negative, which is also a good opportunity for enterprises to reshape. From high-speed growth to high-quality development, providing more competitive products on the supply side is the only way for China's automobile transformation and upgrading.

How to upgrade? From what aspects? Chinese car companies continue to explore and explore the correct path of transition. At the 2018 Chinese Entrepreneur Boao Forum, the heads of many car companies and experts and scholars combined their own experience to portray the future direction for the high-quality development of the automotive industry.

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Brand upgrade, break through the ceiling to have real skills

After years of development, new technologies and new products of Chinese auto companies have emerged, but at the same time, core technologies are relatively insufficient, product homogeneity is serious, and local brands are in urgent need of “from big to strong”. Among the global first-line brands, China's auto companies are hard to find.

"From the perspective of high-quality development requirements, upgrading the brand is a top priority for China's auto companies." Jiang Zili, member of the Standing Committee and deputy general manager of the BAIC Group, said that the Chinese auto industry has made great progress in the past few decades, but it is currently the largest. The gap is in the brand.

The industry generally believes that some of China's auto products can be compared with joint venture brands in terms of technology and services, but consumers do not buy much, largely because companies do not break through the traditional brand image of price wars.

It is timely to focus on improving the image of independent brands. Behind the brand, it embodies the values ​​of many modern market economies such as quality, innovation, culture and service. To build a Chinese automobile brand, it is necessary to identify the market positioning, not to be luxurious and high-end, but also to create value, with quality and technology as support.

After years of market polishing, changes are taking place. The consumption atmosphere that supports the upward development of Chinese auto brands is growing, and the competitiveness of local autos in the domestic market is getting stronger and stronger. Numerous original models and design concepts have emerged intensively, constantly breaking through the price "ceiling".

Geely and Great Wall launched Lynk & Co (Leike), WEY (Wei), and explored the price range of joint venture car companies, while SAIC Roewe and GAC Chuanyi listed on the market, which is higher than the price of traditional independent brands.

Today, these products are selling well and continue to grab market share in joint venture brands. Take Guangqi Chuanqi as an example. In the first ten months of this year, the cumulative sales volume exceeded 440,000 units. In the context of the decline in passenger vehicle sales, the trend rose by 4.5%.

How to establish a Chinese car brand? Wang Guoqiang, member of the Standing Committee and Deputy General Manager of China First Automobile Group Co., Ltd., believes that it is necessary to use the technology of “global first, new initiative”, “fantasy charm, pleasant experience”, “extreme standard, ultimate quality”. The service of “reaching the mind, moving the user” and the ecology of “open sharing, free willingness” are empowered by the powerful red flag brand.

As the birthplace of the Republic's automobile industry, China FAW has always been committed to the strong Chinese automobile industry. “Red Flag” is the most historical and cultural automobile brand in China. For FAW, to enhance the brand image, the red flag brand revival cannot be avoided. Wang Guoqiang said that it is necessary to firmly establish the "Red Flag" as the "China's No. 1 and World Famous" new high-end brand, so that the Hongqi brand will reach 100,000 vehicles by 2020 or earlier, and strive to achieve 350,000 vehicles and 2025 by 2023. 500,000 vehicles a year.

Upgrade the concept, change the road to overtake the car should be down to earth

The difficulty of upgrading local auto brands is hard to find in technology. The core technology of fuel vehicles such as transmissions and engines is still far behind.

And electrification has become a symbol of the transformation and upgrading of the global automotive industry and a recognized development direction. Coupled with relatively low technical barriers, new energy vehicles have become a good opportunity for China's independent automobile brands to “change lanes and overtakes”.

Wang Dongsheng, Anhui Jianghuai Automobile Group Co., Ltd. and deputy secretary of the party committee, said that when the new technological revolution comes, there will be opportunities for “curve” to transcend, and “changing the road” is for everyone to stand at the same starting line. The key is to better understand the trends of future technologies. "For the cross-border perception, the debate over the 'who subverts who' has been replaced by today's 'deep integration' concept."

New energy vehicles have taken on the expectation that China's auto industry has seized the global strategic commanding heights. A large number of funds, manpower and technology have invested in this boom, and many companies have seized opportunities and even fought back.

The independent brands of BAIC and Changan are preparing to abandon the fuel vehicles. The former has split the new energy into the market. In 2020, the fuel vehicles were stopped in Beijing, and the scope was pushed to the whole country in 2025. The latter launched the “Shangri-La Project”, which completely stopped the traditional fuel vehicles. The sale time is also 2025.

In the first ten months of this year, the production and sales volume of new energy vehicles were 879,000 and 860,000 respectively, up 70% and 75.6% respectively, and the growth rate is still rapid.

However, China's new energy automobile industry still presents obvious characteristics of policy pull. The core technology has shortcomings, charging and supporting services are still not perfect, the reliability of the whole vehicle has a large room for improvement, and the brand premium ability is not strong and so on.

Collaborative innovation and international cooperation can help break through the industrial bottleneck. Jianghuai Automobile and Volkswagen, SEAT recently signed a memorandum, the three parties will jointly develop an electric vehicle platform for the global market based on their respective technical strength and product reserves.

"Cooperation allows us to have a deeper understanding of the upgrade, and to promote the upgrade in quality, technology and business model. Under the principle of complementary advantages, joint development, and win-win cooperation, we believe that we can promote new energy vehicles in China and the world. The development of intelligent networked vehicles will further promote the transformation and upgrading of the automobile industry and achieve new leapfrogging." Wang Dongsheng said.

Mechanism upgrade, reform is not improvement but change

On November 18, Chongqing Xiaokang Group (hereinafter referred to as “Xiaokang Shares”) announced that the company intends to issue a price of 4.83 billion yuan to Dongfeng Motor Group Co., Ltd. (hereinafter referred to as “Dongfeng Motor”) to issue additional shares to acquire the shares it holds. 50% Dongfeng Xiaokang equity.

Dongfeng Xiaokang was established by Dongfeng Motor and Xiaokang Co., Ltd., each of which holds 50% of the shares. Upon completion of the transaction, Xiaokang will wholly own Dongfeng Xiaokang and Dongfeng Motor will hold a 26.01% stake in Xiaokang.

Mixed reform is the general trend of state-owned enterprise reform. Under the dual promotion of the cold weather and policies of the automobile market, through the introduction of private capital and technology, strong alliances, exploring new governance and development paths, and becoming a breakthrough in the reform of state-owned enterprises in the automotive industry.

On May 25 this year, the National Development and Reform Commission announced the "Regulations on Investment Management of the Automobile Industry", which stated that it supports the reform of the mixed ownership system between state-owned auto companies and private auto companies, and join forces to form a world-class auto enterprise group. This is regarded by automobile companies as an important signal for speeding up the change.

Yang Qingbing, vice president and secretary of the board of directors of Xinhuanet, believes that as China's auto industry continues to open to the outside world, China's own-brand vehicles will face more intense external competition, and China's auto industry will enter the brand management stage from product management. Deepening reforms will push China's auto industry to a new development peak.

Recently, a number of state-owned auto companies have been moving frequently, and the heat of mixed reform has been rising all the way. Chery and Futian have successively listed their shares for sale and introduced new strategic investors. Hafei shares also intend to sell 38% of the shares. GAC and BAIC have further expanded their dynamism by exchanging shareholdings, managing shares, or attracting capital from various ownership systems.

Mixed reform is not for “mixing” but “mixing”. “Reforming” must be true and deep, and on the basis of mixing various types of capital, activate institutional mechanisms, improve corporate governance, and improve operational efficiency.

In Wang Dongsheng's view, the meaning and requirements of change and improvement are completely different. “The 19th National Congress report proposes quality change, efficiency change, and power change. Improvement is a process of continuous progress, and change is a revolutionary change. This requires us to further emancipate our minds and solve the problem of conceptual breakthroughs. This will enable the Chinese auto industry to have a greater chance of moving from a big country to a strong country in the next round of competition."

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