Shaping the future of auto industry with innovation

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Shaping the future of auto industry with innovation: The Automotive Committee of China Council for the Promotion of International Trade has taken eight years to create this great meeting comprised of global auto industry elites. The forum takes initiative to discuss the structural changes and challenges in the auto industry and to study and evaluate the latest progress in auto-related fields, such as technology, economy, and society. Let us see the major topics and new changes the forum brought to us this year.

At the opening ceremony, the highlight event of the forum, marvelous introductory speeches were made by Wang Xia, Chairman of the Automotive Committee of China Council for the Promotion of International Trade and Chairman of the Chamber of International Commerce Automotive Chamber, and Wu Cunrong, Member of Standing Committee of Municipal Committee and Executive Vice Mayor of Chongqing.

Wang Xia
Chairman of the Automotive Committee of China Council for the Promotion of International Trade and Chairman of the Chamber of International Commerce Automotive Chamber

How Technological Reform Has Made the Market More Competitive.

How can we shape the future of the automobile industry in this changing age?

Although this poses as a difficult question, Wang answered it with only one word – innovation. He said, “The industry reform occurs because of the collection of abundant creations, but if we want to conduct this reform smoothly, we need more high-quality and durable creations.”

Wang expressed, “the wave of technological reform is sweeping the whole world. No longer facing a simple technological reform, we now are facing simultaneous technological changes across multiple industry sectors. With the reform’s outbreak focused on internet technology, new energy, and new material technology, and biotechnology, the whole ecology of technology, business, and society is making a profound change at the same time. The automobile industry has become the expert of technology.”

For the concept of innovation, Wang gave his interpretation from three different perspectives. First, may be most of you are familiar with the innovation mode: from e-commerce to the new retail, from crowd funding to sharing, we have witnessed various changes in the common business model. Now, the corporate cooperation model and industry combination model must also be constantly innovated. For example, the fusion of new entrants and traditional automobile enterprise and the integration of automobile enterprise and platform operators, as well as the competition and cooperation of domestic and foreign automobile enterprise after the stock ratio opening, all need an innovative mindset. Restructuring has transformed the entire automotive industry chain from its origin to its entire framework Automobile companies are also transforming from automakers to travelling providers. We need to structure the industry into a newer, more scientific, and more efficient industry combination model by way of innovative thinking.

Secondly, reform is about the innovation and the break-through in core technology. The tide of reform that the automobile industry is undergoing is led by technical change, and thus, technological innovation should be placed as the core issue. Without the break-through in technology, no model can exert its strong vitality, regardless of its advantages. Whether new-energy automobiles can succeed in reform depends on whether or not their technological improvements in battery, electric motor, and electronic control can provide people a better experience than fuel automobiles. The success of automatic driving depends on if sensor technology and data processing technology can truly surpass human eyes and the brain. Fuel automobiles experienced an evolution of more than 100 years to show its technological content today; therefore, a long-term evolution is also required for the development of new-energy automobiles and automatic driving. For example, the energy model may evolve from hybrid to blade electric and fuel batteries, and it may evolve into the solar-power era. The technological exploration is not a plain path.

President Xi pointed out that “China must strive to become the world’s major science center and innovative highland.” He also discussed the “focus on the world science and technology frontier, catching the main trend and making a good start” as stated in the recent Chinese Academy of Sciences Academician Conference. However, we should also be aware that many core technologies have plenty of gaps or no foundation at all. At present, the whole industry seems to have no mode of innovation, strong industrial integration, or eye-catching atmosphere for core technologies, which should be highly valued by the industry.

Lastly, innovation in industrial and social governance is also of great importance. The innovation of mode and technology inevitably brings new issues for management. These issues include the legal problems of car sharing and driverless cars, the access administration and energy policy adjustment issues of new energy automobile enterprises, the coordinated development issues of new energy automobile enterprises and traditional automobile enterprises, the coordinated management issues of cross-domain and cross-industry, etc. When the boundary of the industry is broken, the boundary of management also needs to be reconstructed. The old management model of block division cannot meet the requirements of the new situation and urgently needs the targeted management innovation. Only when the reform of management mechanism keeps pace with industrial innovation can the model innovation and technological innovation form synergetic and strong forces.

Wang Xia said, “The first 100 years of the automobile as an unparalleled mechanical product solved the basic needs of people to travel. In the second 100 years, automobiles are being upgraded to the smart synthesis of travel tools, entertainment vehicles, and fashion pioneers. The relationship between humans and automobiles, as well as automobiles and society as a whole, will change radically. The automobile is becoming a new structure of social ecology; hence, the automobile industry will usher in a new golden century. In the last Global Automotive Forum, many automobile business managers candidly disclosed that the real hard times for the automobile industry have not yet come, and today’s market will be missed five years from now. A year of market change has vindicated these bosses’ wise predictions in that technological change has not made the market less competitive, but rather more competitive.”

Wu Cunrong
Member of Standing Committee of Municipal Committee & Executive Vice Mayor of Chongqing

The Global Automobile Industry Facing Unprecedented Challenges

According to Wu Cunrong, the global automobile industry will face unprecedented challenges in its technological system, product system, value system, and business model formed over the past 100 years. On one hand, a new round of technological revolution represented by information technology is surging, promoting automatic driving to gradually become a reality. Now, car products are being defined as smart mobile terminals, storage units, and digital spaces. On the other hand, the concept of environmental protection has been deeply rooted in people’s minds, and new energy automobiles have been accelerated to replace fuel vehicles in thousands of households.

Wu Cunrong states that in the next five to ten years, the automobile market will undergo tremendous changes, and the transformation of the future of the industry has become the common theme in the development of the global automobile industry.

Introduced as the only direct-controlled municipality in western China and the largest automobile industry base in China, Chongqing, with its good industrial base and vast market hinterland, is trying its best to accelerate the transformation of the automobile business into an intelligent and green business. Chongqing is driving to build an important base for China’s new energy automobile industry and establish a pioneer industry for the international intelligence auto network. Chongqing has the compelling belief of occupying a place in the future automobile world.

-Published on pages#35 to 38 June-2018 edition of MOBILE WORLD Magazine