Distinguished Chairman Wang Ruixiang, Mayor Mu Huaping, dear guests, ladies and gentlemen,
Today marks the opening of the seventh Global Automotive Forum. Let me begin by offering my warmest welcome and express my sincerest appreciation, on behalf of the organizers, to automotive industry leaders and experts from all over the world, who concern themselves with the development of the industry, and to the media.
In 2015, we held the sixth Global Automotive Forum here and developed mutual understanding on many key issues, for example: on the historical transition of the automotive industry into the “New Normal” economy, and new challenges that will speed this transition; and on the welcoming of the opportunities of electrification, and smart and network technologies into the conventional automobile industry. We are glad to see some of our conclusions already in effect in rising automobile developments.
The macroeconomic environment has not changed greatly in the last year. In 2015, the total sale of Chinese automobiles exceeded 24 million for the first time, and China has led the global automobile market for the past seven years. However, last year’s growth in sales was only 4.7 percent, lower than that of the GDP. Automobile production and sales growth has stood at about 6 percent during the first four months of this year, proving again that the lower growth rate of Chinese automobile market is aligning with the global automobile industry growth norms.
In the first quarter of this year, a majority of transnational automobile corporations saw growth in North America and Europe, however the emerging markets in Brazil and Russia are still weak. China still plays a leading role among the transnational automobile corporations. The sales volume of two of these automobile corporations in China occupies 40% of the global sale volume, and the next five companies occupy the next 20%.
Following the trend of technological innovation and transition, we see some new characteristics in the global automotive industry. Here are some of my thoughts that I would like to share with you.
Firstly, I think it is promising that new energy vehicles will be the leaders in the Chinese market first.
The Beijing Auto Show in April proved that new energy vehicles have had major breakthroughs in their technology such as their range, battery, weight and “zero emission” standards, making the industry even more competitive.
In 2015, sales of new energy vehicles in China reached 330,000, with a year-on-year growth of 3.4 times, which exceeded the United States for the first time making it the new leader in the world. From January to April of 2016, sales of new energy vehicles achieved a year-on-year growth of over 130%. Furthermore, we are seeing increased differentiation within the products in the marketplace. Electric vehicles in China have stepped over the primary stage of “borrowing” in some core technologies, and have headed toward the stage of “leading development” in which we now have independent intellectual property rights and new technological routes for further innovation.
No matter what attitude other nations and enterprises hold towards new energy vehicles, I believe that the Chinese market itself, as the biggest one in the world, can prop up the survival and development of the new energy vehicle industry.
Secondly, the popularity of smart technology creates a new valuable opportunity for the automotive industry.
As we anticipated during the last global forum, the speed of development of smart connected automobiles is much faster than we often think.
In the past year almost all new cars are centered on the concept of being connected and this function of “being plugged in” is growing evermore strong. Many companies have already begun testing their self-driving cars with dynamic displays. Numerous debuts this year featured smart, connected electric vehicles. The trend of integrating the three continues to become more and more prevalent. This integration is not only helpful to improve the car’s performance and functionality, but also is helpful in reducing the cost of automobiles to society which allows us to see cars as more than just a mode of transportation, but a cornerstone of society.
Thirdly, the Internet not only brought us new power in manufacturing automobiles, but has also promoted the socialization of automobiles.
In the last year, the integration of the Internet and auto industry has reached unprecedented levels. Once the Internet just played the role of marketing, now it has launched its first car model.
Automobiles were once just considered a means of transportation in society. The further technological innovation in smart cars with internet capabilities will change the position of automobiles in society. Cars will one day serve more functions than just transportation including entertainment, logistics, energy creation, transformation and communication.
The integration of the Internet with the auto industry might not change the sales of cars, however it will provide society with a higher quality of service, this being what made cars the greatest contribution to society in the first place.
Fourthly, the success of Chinese brands will benefit the global consumer.
The automobile brands of China are finally showing stability after consecutive rough periods. The market share leapt to 44.3% from January to April. The direct cause of this is that Chinese auto companies have rapidly responded to the SUV. But the deeper reason for this is the expertise and technology that has been accumulating in China for the past 20 years. This has allowed many Chinese auto companies have been producing higher-end products. In recent years, Chinese auto companies have bought a lot of valuable international automobile technology and shares. This has positioned Chinese auto companies as important players in the global stage.
Following the strategy of “Made in China 2025”, the enhancement of the automobile industry is an important issue. The so-called enhancement is in hopes to develop internationally competitive enterprises, with patented technology to allow them to hold onto a significant share in the global market. To face the important problem of continued reduction in exports, we need to seize the “One Belt, One Road” opportunity, and continue to enhance strategic design, localization, system construction. To allow this car manufacturers and component manufacturers will need to work together and develop as one team.
I believe that the rise of Chinese brands will change the dynamics of the global automobile industry and will further benefit consumers globally.
I have a hunch that the changes of the automobile industry in the next ten years will surpass the past fifty years. The new round of industry development needs new supporting power, of course. But what is this new power? And how do we get it? That’s the issue we need to discuss in this forum. I hope we all can brainstorm and share our views freely and without any reservation.
Finally, I hope that you all have a fantastic time in Chongqing. Thank you for your time!
On June 7th, the Global Automotive forum was coming to a close. As the last meeting of the forum, this discussion was highly attended and anticipated.
Currently both the global and domestic Chinese automotive industries are slowing down as demands decease. Expected profits are falling year on year. The entire automobile industry is facing problems including the environment, oil consumption, future energy resources, safety and traffic management. Cooperation and competition among policy makers, industrial organizations, vehicle manufacturers, component suppliers and relevant stakeholders will continue to play an increasingly crucial role.
What challenges will automobile industry face in the future? How can we build a community in the industry based on mutual interest? What are the trends that will arise from the international and domestic markets?
Ho Leongleong, host of Phoenix Satellite Television, discussed solutions to sustainable development of the Chinese automobile industry with Chen Zhixin, President of SAIC Motor Corporation, Roland Krueger, President of Infiniti Motor Company and Li Shufu, Chairman of Volvo Car Corporation.
by Mark Andrews
“We’re going to gradually phase out the old platforms. Geely will gradually transition to CMA” said Li Shufu founder and chairman of Geely Holdings speaking at the 2016 Global Automotive Forum held in June in Chongqing.
On June 6th Luo Zheng, the President of Transportation Finance at Ping An Bank, Xu Sitao, Chief Economist and Partner of Deloitte China, Ashvin Chotai, Managing Directo of the Intelligence Automotive Asia and the moderator, Chen Yudong, President of Bosch Investment discussed the challenges and opportunities presented to the automotive market after China enters the “New Normal”.
Since China’s Economic Reformation 30 years ago, the industries of China have constantly been doubted. These doubts however have never slowed down the evolution of the auto industry. As China begins its 13th 5 Year Plan, things are looking bright for the industry yet again.
by MARK ANDREWS
CHONGQING, China -- Sales of alternative energy vehicles are rising quickly in China, but questions remain about whether volumes will be sustained once the government begins promised cuts of subsidies and other support.
Some 331,082 alternative energy vehicles were sold in China last year, more than quadruple the 2014 count. This surge nearly enabled the country the meet a goal set by the State Council in 2012 for such sales to hit a half million by the end of 2015. The cumulative count hit 502,572 on March 31.
The “New Normal” makes the old development style – focusing on scale and speed – difficult to sustain, and provides China’s industry, especially the automotive industry, with the opportunity to transform and upgrade. Made-in-China 2025 reinforces this initiative. At the seventh Global Automotive Forum panelists discussed how to deepen the structural reform and speed up the transformation of government’s functions, how to make a breakthrough for OEM reform, how to provide a mechanism for smoother Chinese automotive manufacturer development, and how to build an industry innovation mechanism.
At the plenary meeting on the morning on June 7, Dong Changzheng, Executive Deputy General Manager, Toyota Motor (China) Investment Co.; Shu Youxing, General Manager of BYD Auto Sales Co.; BVR Subbu, Director, Beyond Visual Range - Strategy Consulting, and former President, Hyundai Motor India; and Li Peng, Deputy Editor-in-Chief of Sichuan Daily Press Group, President of West China City Daily, CEO of Cover Media held deep discussion of the topics from various angle.
On June 7, 2016, a brainstorming session, titled “China’s ‘Internet Plus’ Vision: How Will it Impact the Auto Industry,” was held at the seventh annual Global Automotive Forum. Panelists, Ma Jun, chief expert of Changan Automotive; Qin Zhi, CEO, Auto Home Inc.; He Yi, vice president of Le Holdings, CEO of Le Auto Link, chairman of Le Share; Marco Hecker, Managing Partner, Deloitte China Auto Consulting; and Yang Dehong, Chairman, Hangzhou Miya Information Technology Co., expounded the auto industry’s new form under the vision of Internet Plus.
China’s Internet Plus vision, announced by Premier Li Keqiang in 2015, aims to integrate mobile Internet, cloud computing, and big data into manufacturing and promotes the development of e-commerce. In the automotive industry, “Internet Plus” has the potential to raise efficiency and productivity across all functions and across the value chain. Automobile manufacturers, as well as IT and Internet companies, are making significant investments to meet the challenges and opportunities offered in the plan. Discussion at the session focused on the interaction between IT, Internet and other services providers with automobile manufacturers; changes in the marketing and development of products; and changes brought to every day life by the prospect of an “Internet Plus Car.”