Opening Speech by Executive Chairman Wang Xia at Opening Ceremony of GAF2011

Honorable President of China Machinery Industry Federation Mr. Wang Ruixiang, Mayor of Chengdu Mr. Ge Honglin, Distinguished Guests, Ladies and Gentlemen,

I am pleased to see that world elites are gathering in Chengdu, the land of abundance, for extensive communication and exchange on automobile innovation. It is a grand event for the world automobile industry, and even a gold opportunity for China’s automobile industry. As the host representative, I would like to extend my heartfelt tribute and sincere thanks to all distinguished guests present at GAF2011.

The year of 2011 is of great historic significance, inheriting the past and ushering a better future.

In the past decade, China has joined the WTO and China’s automobile industry has experienced rapid transition. With our continuous efforts and struggling restructuring, China’s automobile industry enjoyed fast development and became the largest market in the world, making China an important vehicle manufacturing power in the world.
China’s automobile industry will no long enjoy rapid expansion since 2011. The industry must consider how to transform from a vehicle manufacturing base into an innovation base. The transformation will determine whether China’s automobile industry can make historic leap in the next decade.

Development is deeply rooted in innovation. The innovation we are talking about is not traditional innovation, such as design and development of new products, application of new technologies, etc. In my opinion, innovation is everywhere. Innovation is for the entire product chain of the automobile industry. Innovation is the powerful engine driving continuous enterprise development. Innovation also maintains sound operation and constant growth of the entire automobile industry. Innovation endows enterprises with necessary advantages to stand out from fierce competition.

In the twelfth five-year development outline, the Chinese government pointed out that taking a new road to industrialization depends on China’s capacity building on independent innovation. It is also an opportunity for China’s automobile industry to take off after 50 years’ accumulation of industrial infrastructures and the road China must take as the leading vehicle manufacturing country in the world. After all, entering the late-mid period of industrialization, China can hardly maintain rapid development simply by technological introduction and cooperation. Innovation is the only way out.

China is endowed with long-standing history and civilization, and Chengdu is regarded as the beginning of the South Silk Road and an important hub between the South and North Silk Roads. This year is also the 125th anniversary of the world-changing machine, automobile. Therefore, having such a grand gathering in such a modern city filled with ancient civilization and strong characteristics of West China to discuss the status quo and development of the world automobile industry and the future of the world largest automobile market fully demonstrated communication among various times and spaces and inspired our responsibility, which will encourage our constant innovation and development.

With the opening of GAF2011, I believe you will share your extraordinary insight and foresight to promote the development of China’s automobile industry and point out the future direction of the world automobile industry. Therefore, I would like to express my sincere thanks again and I wish GAF2011 great success and wish you all good health.

Thank you.

Wang Xia
Executive Chairman, Global Automotive Forum Organizing Committee
Chairman, China Committee for Automotive Exhibitions
Chairman, China Council for the Promotion of International Trade Automotive Industry Committee
Secretary-General, Beijing, Shanghai, Guangzhou Auto Show Organizing Committees
 

Global Auto Forum: China’s 12th five year plan and how it affects the auto industry
 

October 11th 2011, What does China’s 12th five year plan mean for the auto market? This topic has been a major issue across the auto industry since the new plan was announced because the Chinese auto market is at a critical junction in terms of sales owing to a market slow down and push to export greater volumes of cars. Ma Xiao Wei, the president of leading automotive website iAutos.cn, was on hand in Chengdu at the Global Auto Forum to chair a panel with several industry figures, including Zhang Xiang Mu from the Ministry of Information and Technology, Chen Lin from the Ministry of Commerce, Zhou Yong Jiang who is the Vice President of First Automobile Works and also a respected economist and also Jay Kunkel the President of Continental’s  Asia Pacific Region.

During the session Zhang Xiang Mu was eager to point out that the Chinese car industry is at a critical point and the industry should be more eager to introduce new energy infrastructure and to boost the development of new energy vehicles and also increase exports whilst working on a global export strategy. Mr. Zhang revealed intentions for a 10 year plan to boost the new energy car industry which his Ministry is working on and will see the development of standards across the market, which ultimately will lead the new energy market in China. Mr Zhang commented: “The Chinese car industry needs to undergo internal and external changes if it is to become more globalized, we need to increase the innovation of local car manufacturers, increase competiveness, improve cutting edge technology, improve the supply chain to become more modern, these are the foundations of a strong automotive nation”.

Mr Chen Lin from the Ministry of Commerce hoped was that more Chinese car manufacturers would export greater volumes of cars from China. Mr Chen commented: “In a draft version of the 12th five year plan we have already pointed out that Chinese manufacturers should seek partnerships inside and outside of China to improve their technological ability in terms of research and also increase investment in overseas companies. Auto manufacturers should also aim to build global sales networks and also build global brands”. Mr. Chen also went on to give the local car industry three suggestions if they are to become international manufacturers:“Set win-win goals, promote development ideals, continue with rapid development and also work well with your partners and smooth out any issues you might have. Secondly you most devote attention to the speed of development and also quality levels, when working on exporting models you should pay greater attention to quality, when you run into risks or dangers you should continue without hesitation. Thirdly, you should work on developing an internationalized strategy and work on a long term plan to achieve your goals whilst limiting your exposure to risks”.

During the session Mr. Chen singled out Geely’s purchase of Volvo as an example of a successful buyout of a foreign car company despite the massive cultural differences between the two companies. In his closing remarks Mr. Chen said: “With the change in the global economy I hope that more Chinese companies can move beyond China”

Zhou Yong Jiang, a noted Economist and also the Vice President of First Automobile Works was eager to share his thoughts. Outlining his vision for the future car industry in China he believes that energy saving vehicles and new energy vehicles must be at the forefront of car development in the Chinese market. Mr. Zhou believes: “the Chinese economy under the 12th five year plan has revealed several issues, firstly the structure of the industry and also the issue of energy saving cars and the environment.”He went on to talk about First Automobile’s strategic plan which will focus on traditional gasoline engines and also on new energy vehicles, both of which have been pushed to the forefront at the company. Mr. Zhou believes that FAW should work on developing new technologies and bringing them to maturity whilst also improving quality.

Jay Kunkel, president of the Asia Pacific region for Continental put forward Continental’s plan to be focused on developing new technologies and furthering innovation. As a tier one supplier to the Chinese automotive industry Mr. Kunkel is in a unique position to talk about the difficulties and the opportunities the industry faces going forward under the new plan. Mr. Kunkel believes that the next five years offer great chances for companies in China, he outlined that Continental has more than 70 customers in the Chinese market, which makes for some difficulties as every customer has unique demands. As the market continues to consolidate in China the development of new technology and further innovation cannot be ignored, Mr. Kunkel commented: “We need a strategic plan, we need to be more forward looking, we need to bring technology to China”Mr. Kunkel went on to point out which regions in China will be of great importance over the next five years: “We will put a greater importance on the Western, Southern and South Western markets in China”