Success of Chinese brands will benefit the global consumer


Opening Speech by Mr. Wang Xia, Chairman CCPIT-Automotive Committee

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. 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, and 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!

-Published on pages#10-11, June-2016 edition of MOBILE WORLD Magazine