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On June 7th, the 2017 Global Automotive Forum was successfully opened in Chongqing. The Session under the topic: “Made in China 2025: From Workshop of the World to Manufacturing Powerhouse “has attracted a lot of attention.

“Made in China 2025” is a state-level development strategy for China’s future economy. It’s also the first step for China to grow from the biggest manufacturer to the best manufacturer.  “Made in China 2025” is brought out under the trend of transforming the industrial structure. It aims to optimize resource allocation, improve production efficiency through advanced technologies, innovation and intelligence, improved infrastructure, upgraded structure and environmental-friendly requirements. Private companies are the major force of innovation.

What’s the difference between “Made in China 2025” and Germany “Industrial 4.0”? What are the outlooks and opportunities for automotive industry along the way to “Made in China 2025”? In regard to these questions, Gong Daxing, Chainman of SWM Motors – Shineray Holdings, Xu Daquan, Executive VP, Bosch (China) Investment Ltd., Guo Gang, Vice President of Engineering School of Chongqing University, Fan Wentang, VP of Nanjing King Long Bus Manufacturing Company and General Manager of Large Bus Department, Li Jie, Senior Sales Manager of FAW Sales Management Department, gathered at this session and discussed the road for China automotive industry in the “Made in China 2025” strategy and shared their insights.

 

Fan Wentang: A company can seize the opportunity of the future only when it can create products with vitality and intelligence

Fan Wentang, VP of Nanjing King Long Bus Manufacturing Company and General Manager of Large Bus Department, expressed that it was easy to make a success in automotive industry before 2008, and the market was growing rapidly. From 2009-2012, the entire industry still looked positive because of the supporting policies. However, since 2013, the automotive industry manufacturers have been confronted with huge pressure especially from lower profit margin.

“If we look back, Nanjing King Long is a subsidiary factory contract producing middle and small size bus with low value added. It has not broken even. It got orders when business was good and lost money when business was bad.” Fan said frankly, “I realized that the product, whether it’s with good quality or new technology, determines the destiny of a company.”

Therefore, “Made in China 2025” is a very good opportunity for traditional manufacturers to seize and transform it’s development pattern.

For him, the key of success from world workshop to world manufacturing powerhouse is to create innovative products with dynamic position in the value chain. In nature, a good product is rooted in “producing” – producing an innovative and intelligent product. That’s the future of a good company.

 

Gong Daxing: In a best era, companies should treat their product as their life.

In the past ten years, China automotive industry has experienced dramatic change. The output and sales both have grown to the No. 1 in the world. However, in the rapid development, we’ve ignored a lot of important problems. It’s time to stop and take a look at what we have missed. Now it’s the best timing and best ear.

Gong Daxing, Chainman of SWM Motors – Shineray Holdings believes after 30 years of rapid growth, it’s time for companies to cool down and start to think supply-side structural reform and how to formulate their strategies toward “Made in China 2025”.

He said that “Made in China 2025” and Germany “Industrial 4.0” are going hand in hand. In his opinion, Germany “Industrial 4.0” has the same logic on being profitable and controlling risks. The essence of so-called “Spirit of Craftman” is to treat your product like treating your life.

When answering how the automotive industry find the road toward “Made in China 2025”, Gong Daxing said, “Automotive industry personnel have to keep the same step with the 2025 strategy. We have to get ready for a long-term plan and focus on the users. We have to believe that the road toward ‘Made in China 2025’ is the right way and we have to be fully confident and passionate. We have to keep this belief to achieve a great success in the new era of manufacturing.”

Xu Daquan: The key of Germany “Industrial 4.0” is talent.

With the development of Internet of Things and Internet, the traditional market is reforming. Personalized products are more desired. Lifecycle of a product is shorter. 24 hours global service and emerging business models are changing the whole environment. All of these changes bring higher requirements to the manufacturers.

Xu Daquan, Executive VP, Bosch (China) Investment Ltd. said, “First you have to improve the production capability to a more flexible level for small-lot production. Improve the quality. Provide continual services and contingency services. Control the stock. Reduce the dependence on employees. Those are the new requirements from the changing market. Manufacturers have to be well prepared for more challenges.”

Xu Daquan added that, as the pioneer of Germany “Industrial 4.0”, Bosch has implemented programs to adapt to the new changes. Bosch are connecting the physical world to the virtual Internet. Digitalized management and open standards are adopted to achieve quick allocation and flexible production. When promoting the Industrial 4.0 to its world production system, Bosch is also providing solutions to help other companies build 4.0 factories.

Xu Daquan believes that the core of the entire system is talent. People are the designer, the managers and innovators. So talent is the key to Industrial 4.0.

 

Guo Gang: China auto companies should improve the manufacturing capability to provide better products.

The GDP of China has become the second largest in the world. 28 million units cars were produced and sold last year, far ahead other countries. However, the more important perspective is how to transform from world workshop to world manufacturing powerhouse.

Guo Gang, Vice President of Engineering School of Chongqing University said: “It’s a very forward-looking strategy to integrate industries and transform from low-level workshop to high-level manufacturer nationally. In current auto market, most high end cars are still foreign. On the way of transformation, China auto companies should focus on improving manufacturing capability and providing better products.”

The third-generation high-quality cars made by China self-owned companies can be tagged as intelligent, fashion and healthy. Technologies adopted include smart driving and smart interaction. To build such a car, the company must improve their design capability and manufacturing process and finally resolve the key issues -- quality and efficiency. That’s how a user desired car is produced.

 

Unique catching-up industrial strategy of China

As for the entire manufacturing industry, the real challenge around the corner is transformation, including new energy, intelligence, unmanned driving etc. However, the biggest challenge is for China self-owned brands. How to create successful domestic brands, how to occupy market, how to improve reputation – those are the questions challenging all companies. With the growth of China self-owned brands, China’s manufacturing has gradually built up a new look featured by higher quality and better brand. Internet Plus is bringing new challenges and opportunities to traditional auto companies and driving them to reform.

German formulated the Industrial 4.0 strategy based on its own advantages. They will further improve their manufacturing capability and build up new competency of its industries. This will inspire China companies on their way of upgrading. Different from German, China faces many problems on the supply-chain. China has overcapacity of low-quality products, while the market is demanding higher quality. The focus of structure reform should be on the supply-chain, which is an unavoidable road for China to go through to transform from low-end manufacturing to high-end manufacturing. It’s also a great driving power to help China achieve the goal of “Made in China 2025”.

Documentary of GAF2016