World-class Chinese car brands or new energy vehicles can bring opportunities

In recent years, the scale of the Chinese auto market has continued to lead the world. The China Association of Automobile Manufacturers recently predicted that in 2017 China's auto market will reach 29 million vehicles, which will lead the world for nine consecutive years. The German Automotive Industry Association predicts that China will continue to maintain its position as the world’s largest market in 2018. In this regard, experts pointed out that after successively reeleving the world’s largest auto market for many years, the Chinese auto industry has begun to enter a period of strategic opportunities that are becoming stronger and stronger. The proportion of sales of branded cars in China continues to increase. The pace of “going out” continues to accelerate, and market acceptance has increased significantly. In particular, the development of new energy vehicles and smart networked vehicles has brought the Chinese car industry an opportunity to “carry over”. .

Independent brand in beyond

The huge market has provided a broad space for the development of domestic and foreign car companies. China has become the largest global market for many multinational car companies and their joint ventures in China. The data shows that China has become GM’s largest global market for many years. In 2017, the retail volume of General Motors and its joint ventures in China exceeded 4 million for the first time, an increase of 4.4% year-on-year.

Not long ago, Porsche opened its 100th sales center in China. Feng Peide, an executive board member of Porsche’s sales and marketing strategy, said that China is its largest single market in the world. The Porsche four-door sports car is particularly popular in Asia, and the demand for two-seater cars is also growing rapidly. He said that China has become the most important market for Porsche 718 models. In the first three quarters of 2017 alone, Kaman and Bockster had sales of 5,100 vehicles.

Regarding the development pattern of the Chinese auto market, industry insiders pointed out that in the traditional fuel vehicles, especially in the high-end auto market, multinational car companies and their joint ventures in China still have a greater advantage. However, a number of Chinese brands such as SAIC, Chang'an, Geely, and Great Wall have achieved comprehensive improvement in their overall competitiveness through brand, product, technology, and manufacturing upgrades. Today, Chinese auto brands are gradually gaining a foothold and accumulating their own advantages. Chinese consumers' recognition of Chinese brand cars is also rising.

According to the statistics from China Association of Automobile Manufacturers, from January to November in 2017, a total of 9.579 million branded passenger vehicles were sold in China, an increase of 3.5% year-on-year, accounting for 43.4% of the total passenger car sales, which was 0.7% higher than the same period of 2016. .

While sales volume has increased steadily, 2017 has also been a breakthrough year for the high-end of its own brands. Great Wall Motors and Geely Automobile launched high-end brands WEY and Lingke, respectively, and were listed in April and November 2017 respectively. Among them, the two products of the Great Wall WEY, VV7 and VV5 have been listed since its launch, and the sales volume has exceeded 60,000 vehicles.

It is worth mentioning that the product quality of independent brands is getting better and better. Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Association, previously introduced that from the perspective of the failure rate of new cars, the failure rate of self-owned brands and joint venture brands in the past was more than 100 points, and in 2016 this figure has narrowed to 14 points. The gap is minimal, and the quality of some independent brands has actually surpassed that of joint venture brands.

"The good performance of Chinese auto brands in recent years has benefited from many factors: First, the implementation of innovation-driven development strategy has promoted the improvement of China's overall level of innovation. In this process, the automotive industry's technological level and innovation capability have improved significantly. The second is in the automotive design, talent introduction and core technology breakthroughs, the independent brand car companies continue to grow; Third, the pressure of international competition has played a certain role in promoting.” Beijing University of Science and Technology Dongling School of Economics and Management professor He Weida in An interview with this reporter said.

Chinese car companies go to the world

While deepening the domestic market, Chinese automakers are also accelerating overseas. According to the data from the China Association of Automobile Manufacturers, from January to November in 2017, automobile companies exported 777,000 vehicles, a year-on-year increase of 26.6%. By model, passenger cars exported 564,000 vehicles, an increase of 34.6% year-on-year; commercial vehicle exports were 232,000, an increase of 10.5% year-on-year.

The vehicle exports have driven Chinese brand cars to more places around the world. At the same time, Chinese car companies are also accelerating the transition from export trade to investment, technology, and management.

Today, setting up factories overseas has become a popular choice for Chinese auto companies to “go global”. In March 2017, Geely’s London Taxi Company was completed at the Coventry-Ansti factory, which was the first factory in the UK to focus on electric vehicles. In September, Geely’s Volvo announced that it would double its investment in its first US factory, bringing the total to US$1 billion. In November, the final assembly line of the Geely “Baijiji” factory was formally put into operation. The factory plans to produce 25,000 and 35,000 vehicles in 2018 and 2019 respectively.

In February 2017, JAC Motors established a plant in Mexico; in April, Beijing Foton Motor Group and Algeria KIV Group signed a strategic cooperation agreement, deciding to cooperate to build a factory to produce automotive development local market; in June, SAIC announced that it will establish a wholly-owned company in India. The subsidiary company will introduce its MG brand into India. The factory will be officially put into production in 2019 with an annual production capacity of between 50,000 and 70,000 vehicles.

In addition to building factories, a large number of Chinese auto brands such as the Great Wall, Geely, Chang'an, SAIC, Chery, Jianghuai, Beijing Automotive, Zhongtai, and BYD have established R&D centers overseas. For a long time, Changan has placed great emphasis on R&D investment and has established R&D centers with a focus on each other in Turin, Italy, Yokohama, Japan, Birmingham, United Kingdom, Detroit, USA, and Silicon Valley, USA. For example, Detroit and Silicon Valley in the United States are mainly responsible for chassis development and smart car development. Yokohama, Japan is responsible for interior design. Turin, Italy, is responsible for design. Birmingham, UK is responsible for power system research and development. Changan now has more than 11,000 R&D personnel from 17 countries around the world, including more than 7,000 overseas R&D personnel.

At present, Zotye Automotive has established technology R&D centers and modeling centers in Japan and Italy respectively, and has implemented comprehensive R&D layouts for powertrains, vehicle platforms, new energy sources, and intelligent gridlinks. It also has several independently developed engines. .

He Weida pointed out that the “going out” of Chinese car companies now presents a more gratifying phenomenon: While export trade continues to maintain rapid growth, “going out” has more new measures and new progress. Through independent overseas establishment of plants, mergers and acquisitions, and the establishment of research and development centers, Chinese car companies have fully integrated the needs of the local market and the needs of localization, and have opened the door to overseas markets better, while also technically benchmarking international standards and narrowing down with mainstream car companies. The gap has attracted more talented people to join and continue to strengthen their own strength.

World-class brand or period

US Bloomberg reported recently that the Chinese government is vigorously advancing transportation reforms to control pollution and reduce China's dependence on oil imports, which may bring an unexpected benefit to the development of China's automobile industry. Environmental regulations and production incentives will eventually promote electric vehicle production, which may ultimately give China an opportunity to build a world-class car brand.

Data show that from January to November of 2017, the production and sales of China's new energy vehicles increased by 49.7% and 51.4%, respectively, from the same period of 2016 to 639,000 and 609,000 vehicles, respectively, which accounted for about 50% of the world's new energy vehicle production and sales.

“China has already led the world in sales of electric vehicles.” Xu Haidong, Assistant Secretary General of the China Association of Automobile Manufacturers, said that the sales of new energy vehicles, plug-in hybrid vehicles and fuel cell vehicles are expected to reach 700,000 by 2017, and by 2018 Reached 1 million vehicles. These cars are almost all Chinese brands.

With the continuous growth of China's new energy vehicle market and the rise of independent brands, multinational car companies have set off a new round of joint venture boom in the Chinese market. In August 2017, Renault Nissan and Dongfeng established a new joint venture to jointly develop pure electric vehicles; Volkswagen said in November that it will invest more than 10 billion euros in cooperation with local Chinese partners to build 40 new energy vehicles; in November, Ford Motor Co. Zhongtai Ford Motor Co., Ltd., a new joint venture company with Anhui Zhongtai Automobile Co., Ltd., was formally established. The new company will create a series of economical pure electric passenger car products using the joint venture's own brand; in December, Brilliance and Renault will form a new brand. The joint venture, the new company's business mainly involves light commercial vehicles and new energy vehicles...

The industry believes that behind the new round of joint ventures is a major manifestation of the rise of independent brands. In the field of new energy, data from the China Association of Automobile Manufacturers shows that the top ten car companies with market share have been hard to find foreign investment, and their own brands occupy the major market share of the new energy automobile market. Zhang Junyi, a partner of Weilai New Energy Industry Development Fund, believes that “Individual brands have invested much earlier and developed faster in new energy fields, and these companies have also gained a certain market position and stock advantage, accumulating certain users and experience.”

Zhu Hongren, executive vice president of the China Enterprise Confederation, stated that after many years of reelection in the world’s largest auto market, China’s auto industry has ushered in an important turning point. He believes that "under the guidance of the 'Made in China 2025' direction, new energy vehicle technology and intelligent network-linked technology will become the two most important breakthroughs for China's autos to mid-to-high end."

“The development of new energy vehicles has provided the Chinese auto industry with an opportunity to “carry over”, and Chinese car companies will likely take the opportunity to build high-end brands of Chinese automobiles. While paying attention to the development of new energy vehicles, the smart network car is also An important direction of development, if we can fully integrate the two, then the Chinese automobile industry will usher in a broader space for development in the future." He Weida that.