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The automotive industry is rapidly becoming more digitized as traditional firms partner with IT giants. China appears to be the most vibrant auto market in this new era with all kinds of car start-ups popping up. These start-ups not only have diverse backgrounds and experiences, but they also have different understandings and perspectives towards the auto industry. Where are the OEMs from? Why do automakers pioneer new energy smart cars ? How do they compete with the traditional car ? Who will lead this next wave?

Many industry related people gathered at the 2017 Global Automotive Forum on the afternoon of June 7th  including Qin Lihong, the Co-Founder and President of NIO, Cao Zhong, Chairman of Hangzhou Changjiang Auto Holdings Company, Daniel Kirchert, Co-Founder and President of FMC, Lu Qun, Chairman of Beijing CH-Auto and Qiantu Motor, Lin Mi, Deputy General Manager YUDO New Energy Automobile, Freeman Shen, Chairman and CEO of WM Moto, Gary Gu,  Co-Founder and CEO of AI-WAYS  and Tiger Shen,  CEO of Zhiche Auto. They had a passionate discussion on the topic of "electric new forces: rise, definition and reconstruction".

 

The Existence is more Important than Origin

Mr. Qin , the Co-Founder and President of NIO, held that the Chinese automotive industry has experienced three stages: First, in the early days of reform and opening up, the automobile industry made many innovations; Second, a dozen years ago, some main brands such as Chery, Changan, Geely and Brilliance Auto showed up and since then Chinese domestic auto companies were written into history; The third stage is happening now. The Chinese market, the global biggest market, enjoys new strength and also experiences the consistent failure of new companies . This process has never stopped. Qin Lihong explained that the appearance of new manufacturing in China turns out to be a satisfactory outcome. Mr. Qin also said that: “Everybody has to start somewhere. As for traditional and newly-emerging auto companies, the origin is not important. What is more important for them is to go through difficulties and survive.

FMC President and Co-Founder Mr. Kirchert said explained that global vehicle population is now over 1 billion and people on averagestay in a car 90 minutes a day. To make full use of this time, cars in the future will not be limited to the transportation as we define it today, it will become more intelligent and more fun. At present, the biggest challenge that traditional car companies face is not lack of resources, its the mechanical research and development of DNA, not Internet DNA, , it’s a problem with the way of thinking. Mr. Kirchert believes that there will be two to three Chinese Internet car companies enjoying prosperous development and a world-renowned reputation like Tesla.

 

Electric Vehicles Have a Unique Advantage

Why do most automakers pioneer new energy smart cars? Lin Mi, Deputy General Manager of YUDO New-Energy Automobile Co., LTD (Fujian Motor Group), explained that in the current auto market, if consumers are willing to accept a new energy-driven car, they will be able to accept any brand. This opens a window for the new forces to build a new period. Lin concludes, "So, I think the emerging new energy automotive industry is easier to develop." In Lin’s eyes, electrification, automation and sharing will be the future direction for development of passenger vehicles, as long as new vehicles companies can make progress on R&D and the manufacturing sector, it can breakthrough as soon as possible.

Freeman Shen, Chairman and CEO of WM Motor, also thinks that, “Whether in terms of environmental protection and resources, electrification, automation and sharing are the future direction of cars. As for products, electro mobiles have its own advantages: good power, environmentally friendly, easy control and other advantages, which are very popular with users. To some extent, the accumulation of traditional cars turns to be a burden. As long as enough effort is given to the electro mobile, it is possible to realize differentiation, and therefore slowly development.”

Co-founder and CEO of SAIC, Gary Gu agrees with the above opinions:“Compared to the 130-year history of the entire automotive industry, new energy smart cars can be said to have just begun. The global automotive industry production is probably more than eighty thousand, but the new energy smart car is about one million, thus the increasing potential is very large. The traditional car companies are also in the market, but their action may not be so fast under the premise of the traditional power models of the huge market, which is an opportunity for new car companies. While faced with all kinds of difficulties, the future of new energy smart cars is bright and wonderful.”Gary Gu also expresses that though facing opportunities, the new energy smart car companies also face all kinds of difficulties:Production supply chains needs to be guaranteed, sales needs more innovation, even more sales, charging, usage and after-sales links still need to be perfected, which all need the new car companies to analyze and solve the problem from a higher and farther perspectives.

 

Not Just "Catfish" (Awareness of Unexpected Development)

Co-founder and CEO of Zhiche Auto (CEO of Singulato), Tiger Shen claims himself to be "a barbarian of the car industry that came from the Internet industry”. “I am an internet deserter. Internet industry competition is very intense, only the first can survive. But in the automotive industry, the market is not like the winner-take-all”.

Technology, business models and subscribers are all changing. How can one survive in this intense external environment without change? Tiger Shen thought that old auto brands and state-owned enterprises have less chances of mutation, while newly-emerged companies and private enterprises much easily adapt to the time and achieve self-change: “During this period with rapid changes, there will be more challenges if we refuse to use a new way to deal with traditional things. Compared to traditional companies, we are more thoughtful. This is a change for the better in terms of thought.”

“We have noticed the ability of traditional auto manufacturers when we researched and developed new cars, such as new energy cars and internet concept cars. If traditional auto manufacturers were determined to compete in this new market, then the competition for us would be great.” From the perspective of Cao Zhong, chairman of Hangzhou Changjiang Auto Holdings Co., Ltd., China, the service life of traditional models depends on the speed of the R&D of new energy vehicle technology. Although the market is prosperous, newly-emerged companies ought to seize this valuable chance and always spur themselves, continue to be innovative, and keep tense.

Many insiders describe the entry of newly-emerged enterprises, for the traditional companies, as a catfish effect which utilize their own stirring to activate the vitality of traditional enterprises. Lu Qun, Chairman of Qiantu Motor, China, objected and thought that: “ the newly-emerged companies is not a catfish which stirs the pond, but a shark which poses challenges to traditional automotive companies.” Lu Qun said at the same time that traditional automotive companies are not out of date, new energy vehicles will be the competitive domain for those traditional automotive companies to fight for in the future. What the newly-emerged companies should consider is how to seize the transient opportunity to reform, and keep careful when looking ahead into future trends.

Documentary of GAF2016