Comments on hot events in the automotive industry in 2016

2016 was a year of both good and bad for new energy vehicles. At the national policy level, industrial policies supporting new energy vehicles were introduced one after another, and the production qualification of new energy vehicles was issued in less than a year. However, the fraudulent subsidy behavior of some car companies led to a joint investigation by relevant national departments. The direct consequence was that local subsidy policies were delayed and central subsidies were also at a "halt" stage due to the fraud investigation.

A new energy passenger vehicle company told reporters that for companies like them that did not commit fraudulent subsidies, 2016 was a tough year, as subsidies were delayed and the company's funds were tight, "every car sold was a loss". Due to various factors, the sales of new energy vehicles in the first 11 months of 2016 did not grow 3-4 times as fast as last year, but only increased by 60.4%.

On the one hand, existing new energy manufacturers are having a hard time, while on the other hand, a large number of "outsiders" are pouring into the new energy car manufacturing army. They include Hong Kong Wulong, a capital giant, Internet companies LeTV Auto and Weilai Auto, Dong Mingzhu, the head of the home appliance giant who just announced the car manufacturing at the end of the year, and ZTE, a communications equipment manufacturer. Without exception, these new car-making forces have chosen new energy vehicles with a much lower technical threshold than traditional cars, but how many of them will survive in the future has become a new problem.

Even though the growth rate of new energy vehicles is much higher than that of traditional vehicles, the current sales of new energy vehicles only account for 1.6% of the automobile market, and traditional vehicles will still dominate the market in the next few years. Paradoxically, in order to protect the environment and solve congestion, many cities have implemented restrictions on the use and purchase of traditional vehicles, but the policy has opened a loophole, and traditional vehicles below 1.6L will enjoy a 50% purchase tax reduction policy until the end of 2016.

The policy of halving the purchase tax had an immediate effect, ending the tragic situation of the auto market in 2015 and ushering in good times for the auto market in 2016. In the first 11 months, China's auto sales reached 24.948 million units, a year-on-year increase of 14.1%, 10.8 percentage points higher than the same period last year.

Just when the purchase tax was about to expire, the government extended the purchase tax preferential policy, but the intensity was weakened. Some people think this is a crisis, while others think it is an opportunity. Domestic automakers with small displacement are also taking advantage of the situation to market. Among them, SAIC was the first to announce that it would make up for part of the state's reduced subsidies and still enjoy the purchase tax halving benefit.

Thanks to the "halved purchase tax", domestic brands have achieved explosive growth this year. What about next year? In fact, the country gave domestic brands a big gift as early as March this year. Hebei, Liaoning, Henan and Yunnan provinces took the lead in launching a pilot project to relax restrictions on pickup trucks entering cities. For domestic brands that have already occupied a dominant position in the low-end SUV market, the lifting of the pickup truck ban in more and more cities in the future will undoubtedly become a new explosive growth point for domestic brands.

The country has always spared no effort in supporting domestic brands. After years of development, domestic brands have also achieved transformation, and a number of national brands such as Chery, Great Wall, and Changan have been born. When Changan Automobile's driverless car achieved a 2,000-kilometer test in April this year, the industry discovered that driverless cars are so close to us, and Chinese people can also occupy a place in the "trend" of the global automotive industry.

Unlike the rapid growth of domestic brands, many foreign brands have felt pressure from all sides this year. Audi, which has entered the Chinese market for 28 years, has always been a leader in the luxury car market. When the sales growth slowed down in the past two years, the Germans tried desperately to break the convention that luxury passenger car brands only have one joint venture in China. This not only hurt the feelings of the original joint venture partner FAW, but also damaged the interests of FAW Audi dealers. Therefore, the collective attack from FAW Audi dealers once put the Germans in a dilemma. The low-key SAIC Audi project came to an abrupt end after 19 days of "seeing the light". It is unknown whether there will be a turnaround next year.

If the dealers' backlash only embarrassed Audi, then the Takata airbag incident has caused a lot of headaches for many global auto brands. Since the Takata airbag recall incident, more than 60 million affected vehicles have been recalled in the global market. How can Takata afford the cost of such a large-scale recall? The airbags that were originally designed to protect passengers have become "murder weapons". How can such a product pursue "zero deaths"?

2016 is coming to an end and 2017 is about to begin. Perhaps the Takata airbag incident will continue to ferment, but we hope that the recall can be quick to minimize the damage caused by Takata airbags; we hope that the Chinese automobile market will continue to thrive, and we hope that the development of new energy vehicles will give Chinese automobile companies an opportunity to stand at the commanding heights of the global automobile industry; we hope that vehicle manufacturers can respect dealers and resolve disputes between manufacturers and dealers in an equal partnership.

The reduction of purchase tax incentives has touched the nerves of the auto market

Just when the auto market was in turmoil, in September 2015, the State Council decided to implement a preferential policy of halving the vehicle purchase tax for the purchase of passenger cars with a displacement of 1.6L or less from October 1, 2015 to December 31, 2016. The effect was immediate, and since October, sales have swept away the previous haze, and the sales of auto companies have generally increased significantly, and the hot sales of small-displacement models have made great contributions.

The same trend continued in 2016. In the first 11 months, 15.628 million passenger cars with engine capacity of 1.6 liters or less were sold, up 22.5% year-on-year, accounting for 72.1% of passenger car sales, 3.8 percentage points higher than the same period last year. This year, the sales targets of major automakers were in line with previous expectations. Most automakers achieved sales of more than 90% in the first 11 months. Changan Automobile and Chery Automobile also achieved their annual sales targets ahead of schedule.

As the deadline for the purchase tax reduction policy for passenger cars with a displacement of 1.6L and below is approaching on December 31 this year, the industry generally expects that passenger car sales may have an explosive growth in December, but there is a general concern that the purchase tax reduction policy will overdraw the auto market next year. You should know that in 2010, the country implemented a policy of halving the purchase tax for models below 1.6L, and domestic auto sales increased by 32.37% year-on-year, and passenger car sales increased by 33.17%. However, in 2011, after the policy ended, the growth rate of auto sales was only 2.45%, the lowest level in 13 years.

Peng Bo, partner of PwC Strategy&, said that with the withdrawal of stimulus policies, the risk of a cold auto market in 2017 is relatively high, and with the rapid growth of vehicle ownership, the overall market will gradually enter a mature track. It is precisely because of the risk of a "cold auto market" that the state has not completely withdrawn the purchase tax preferential policy, and has introduced a new policy on the purchase tax of small-displacement vehicles. From January 1 to December 31, 2017, the purchase tax rate for passenger cars with a displacement of 1.6 liters or less will be reduced to 7.5%.

In order to cope with the adjustment of the purchase tax policy, which may significantly overdraw sales in the next quarter, automobile companies have paid out of their own pockets to subsidize consumers. SAIC Passenger Car, GAC Passenger Car, FAW-Volkswagen and others have introduced measures such as continuing to enjoy 50% reduction in purchase tax and extending the subsidy period for 50% reduction in purchase tax.

New energy subsidy fraud companies harm "honest car companies"

In addition to the decline in subsidies for traditional cars with a displacement of 1.6L and below, the subsidy policy for new energy vehicles in 2017 was adjusted to "raise technical thresholds, set upper limits for central and local subsidies, and prevent the phenomenon of excessively high local supporting subsidy standards." The original intention was to prevent "subsidy fraud" for new energy vehicles and give full play to the guiding role of subsidy policies in supporting the best and strongest.

The most eye-catching event in the auto industry in 2016 was the “subsidy fraud” of new energy vehicles. At the beginning of this year, relevant national departments began to jointly investigate the phenomenon of subsidy fraud of new energy vehicles and announced a list of subsidy fraud in September. However, many problems surrounding new energy vehicles still exist.

On December 20, the Ministry of Industry and Information Technology announced penalties for new energy vehicle "subsidy fraud" companies, and "revoked the vehicle production qualification" for Suzhou GMS Bus Manufacturing Co., Ltd., which had the most serious "subsidy fraud"; on December 21, the Ministry of Industry and Information Technology issued an administrative penalty decision, and Shenzhen Wuzhoulong Automobile Co., Ltd. (hereinafter referred to as Wuzhoulong Automobile) had serious "subsidy fraud" problems with two new energy vehicles. It was ordered to stop producing and selling problematic models, suspend its qualification to apply for the recommended new energy vehicle catalog, and ordered to carry out rectification for a period of 6 months.

At the same time, the Ministry of Industry and Information Technology and the Ministry of Finance have further improved the fiscal subsidy policy. First, adjust the fiscal subsidy policy, appropriately adjust the subsidy method for passenger cars and special vehicles, raise the technical threshold, encourage technological progress, set the upper limit of central and local subsidies, and prevent the phenomenon of excessively high local matching subsidy standards. From 2016, the purchase subsidy funds for new energy vehicles will be changed from pre-allocation to post-liquidation, and strengthen the review of local funding application reports and promotion status verification.

Secondly, the new regulations raise the entry threshold for enterprises. The new regulations raise the entry threshold in terms of enterprise design and development capabilities, production and manufacturing capabilities, after-sales service capabilities, product technical performance, quality assurance capabilities, etc., and strengthen safety supervision requirements, which can effectively improve product quality and safety levels.

Secondly, improve the supervision and management mechanism, improve the three major guarantee mechanisms to strictly prevent the recurrence of "subsidy fraud" incidents.

As the saying goes, when the city gate is on fire, the fish in the pond will be affected. A new energy passenger car company told the reporter of Securities Daily that for companies like them that did not commit subsidy fraud, 2016 was a very difficult year. Subsidies were delayed and the company's funds were always tight, "every car sold was a loss."

Diversified transformation, betting on cross-border car manufacturing

Even though the government strictly regulates the new energy vehicle market, it still cannot stop the influx of "outsiders" into the new energy vehicle manufacturing industry. The Securities Daily reporter noted that unlike the car manufacturing movement ten years ago, the cross-border car manufacturing companies this time include not only manufacturing companies such as Gree and Hanergy, but also Internet companies such as Tencent, LeTV, Weilai, and CHJ Automotive, as well as communications companies such as ZTE.

Generally speaking, there are roughly five types of companies currently planning to cross-border car manufacturing: the first type is parts or design companies in the industrial chain of traditional car companies, such as Xiaokang Shares and Wanxiang Group (the National Development and Reform Commission has previously approved their annual production of 50,000 extended-range pure electric passenger vehicles); the second type is Internet companies or people with Internet backgrounds who invest in them with capital, such as Tencent and LeTV; the third type is personnel from traditional car companies who start a new business; the fourth type is manufacturing companies represented by Gree and Foxconn; the fifth type is new energy companies represented by Hanergy.

Industry insiders pointed out that the emergence of so many new car-making forces is mainly because the technical threshold of electric vehicles is much lower than that of fuel vehicles. In the future, it is not just about manufacturing, but also about electronic technology, rental services, etc. In the future, cars can have standardized and modular power systems, and personalized and networked vehicle configurations, just like smart phones. Companies like ZTE have advantages in electronics and intelligence, which are also not available in traditional car companies.

However, "although the R&D threshold of electric vehicles is lower than that of traditional vehicles, the centuries-old heritage of the automotive mechanical part is not something that cross-border companies can master. Building a good car is not as simple as assembling a mobile phone. If there is no breakthrough in electric vehicles and service transformation, cross-border car companies will soon be unable to hold on." The above person believes.

In fact, Gree and Foxconn want to build cars because they have become more and more sophisticated in their respective fields, and cars, which are at the crossroads of smart connectivity, are undoubtedly the most attractive choice. However, in the view of many industry insiders, the biggest challenge for cross-border car companies is that they require huge financial support and time accumulation, while the "diversification" of traditional car companies is based on specialization and can share existing technology and production systems.

In addition, some car company executives also said that car manufacturing has extremely demanding requirements in terms of both processing technology and ergonomics. Many cross-border car companies are accustomed to "short, flat and fast", but the special requirements of cars for safety and performance determine that car manufacturing requires a certain amount of accumulation, which may sow certain contradictions and crises.

Cross-border car companies, in addition to solving the funding problem, must also hurry up and come up with a model that can meet the travel needs of consumers. The reporter learned that although SAIC Group has teamed up with Alibaba Group to launch the first Internet SUV in June this year, the first batch of vehicles on the market are still fuel vehicles.

In addition, before actually manufacturing cars, cross-border car manufacturers need to obtain new energy vehicle production qualifications. So far, only seven companies, including BAIC New Energy, Changjiang Automobile, Qiantu Automobile, Chery New Energy, Minan Automobile, Wanxiang Group and Jiangling New Energy, have obtained the qualification to produce pure electric passenger cars.

As Fu Yuwu, chairman of the China Society of Automotive Engineers, stated, the future of automobiles is not about one company subverting another. Automotive products are shifting towards electrification, intelligence and lightweighting, requiring cross-border and traditional automakers to leverage their respective strengths and work together for mutual benefit.

Peng Bo believes that the development trajectory of disruptive technologies in new energy vehicles (such as solar energy) shows that once the ownership of new technologies exceeds 1%, their development will achieve non-linear and explosive growth, far exceeding general predictions. The network effect of future consumption will help the further rapid development of new energy vehicles.

Autonomous driving becomes the trend of the global automotive industry

Similar to the fact that new energy vehicles are unlikely to become mainstream in the short term, "driverless" autonomous driving technology, which has become a hot topic in the global automotive industry, is actually still far from mass production.

On April 17 this year, Changan Automobile pushed the public's enthusiasm for driverless driving to a climax. On that day, Changan's driverless car completed a 2,000-kilometer road test after 6 days. This ultra-long-distance actual road test also made it the first automobile company in China to achieve long-distance driverless driving.

The reporter noticed that, benefiting from the progress of camera sensor technology and smart traffic planning, driverless technology is accelerating the transformation from theory to reality. Many car companies have set 2020 as the time node for realizing autonomous driving. Haitong Securities Research Report believes that consumers and investors are rapidly recognizing driverless cars, industrial confidence is increasing, and industrial investment has already started. According to Baidu's plan, the commercialization of autonomous driving cars will be realized in 3 years and mass production will be realized in 5 years. If everything can be realized, the application and popularization of driverless cars in China will not be far away.

It is worth mentioning that some experts have pointed out that China's driverless technology lags behind that of the United States by 5 to 10 years. The gap in core components and core technologies has restricted the autonomy of China's driverless car development to a certain extent, which has pushed up the R&D costs. Li Yusheng, chief engineer of Changan Automobile Engineering Research Institute, also admitted in an interview with the Securities Daily reporter that there is still a gap compared with foreign advanced companies, and Changan's road test is mainly achieved through central integration.

In fact, in the field of autonomous driving, American and European companies are indeed one step ahead. Currently, major developed countries have taken various measures to support companies in the development and testing of autonomous vehicles, including approving autonomous vehicle road tests and building autonomous vehicle test sections to promote the development of the autonomous vehicle industry.

Even so, Chen Chaozhuo, director of the Sino-Swiss Traffic Safety Research Center, believes that the progress of autonomous driving in China is still worthy of recognition, and it is not objective to simply measure the amount of technical content by suppliers. "Just like good ingredients do not necessarily make good dishes, after all, the adjustment and integration of the vehicle manufacturer is not a one-day job."

"Domestic driverless cars are just getting started, and most of them are still in the research and development and testing stage. Take sensors for example, there is still a blank. It is not accurate and ambiguous to define the current tests as driverless cars. Autonomous driving will be the breakthrough direction and focus for some time to come," Chen Chaozhuo told reporters.

In addition, the unmanned driving field is also facing problems such as network technology security, regulatory supervision, and traffic responsibility. Peng Bo predicts that by 2020, the automotive industry will begin to truly shift to autonomous driving; by 2025, 20% of new cars sold will have obvious autonomous driving functions; by 2030, people will even see autonomous driving vehicles without steering wheels. Even conservative estimates predict that by 2030, the market penetration rate of autonomous vehicles will be 15%-20%.

Audi breaks tradition of having only one joint venture for luxury passenger cars

Whether it is new energy vehicles or driverless technology, the mainstream is still traditional vehicles. Even when traditional car companies are shouting about how many new energy vehicles they will produce, their eyes are still on the traditional car market. The most typical example is that Audi, whose sales are still in the growth stage, took the risk of negotiating cooperation with SAIC in order to maintain its high market share in the past.

On November 11, SAIC Motor and Audi signed a cooperation framework agreement in Germany, where the Volkswagen Group is headquartered. The agreement plans to introduce the Audi brand to Shanghai Volkswagen for production and sales, and the cooperation model is the SAIC Volkswagen Skoda model. It is reported that the first product of the cooperation between the two parties is scheduled to be released in April 2017.

A single stone stirs up a thousand waves. The FAW Audi dealers, who were the first to feel the loss of their interests, united to question Audi: "How to establish the sales channels of the new sales company?" "How to balance the rights and interests of FAW Audi dealers and SAIC Audi dealers?" It can be seen that after Audi and SAIC successfully signed the cooperation agreement, the trade-off between dealers has become imminent.

On November 21, 19 dealers collectively opposed the cooperation between Audi and SAIC Volkswagen, and demanded that Audi give a clear answer before December 1, otherwise further boycott measures would be taken; on November 30, the day before the "deadline" for dealers to refuse to pick up cars, representatives of the Audi Dealer Association of the China Automobile Dealers Association sat down at the negotiation table again with representatives of Audi AG and FAW-Volkswagen Audi Sales Division. In the end, after an 8-hour meeting, the parties reached a temporary "settlement". Audi said it would negotiate with SAIC Group after reaching a consensus with the Dealer Association, and would start negotiations with Audi, SAIC Group and FAW Audi Dealer Association before the end of March 2017. If necessary, FAW Group will also be invited to participate.

From the internal documents produced after the meeting on November 30, it can be noted that Audi and SAIC Group have only temporarily suspended negotiations on dealer networks and sales channels, not canceling the project. This part of the work will only be carried out after reaching a consensus with the Audi Dealer Association. An analyst who did not want to be named told the reporter of Securities Daily that FAW has been holding the Audi brand for many years and has no worries about food and drink in the high-end market, so SAIC is inevitably jealous. In fact, compared with Audi, Porsche, which has had frequent sparks with SAIC before, may gradually come into people's view.

"If FAW Audi dealers, Audi, SAIC Group and FAW Group still cannot reach a consensus on the SAIC Audi cooperation within the next three months, SAIC's cooperation with Porsche and the FAW Audi joint venture model will remain unchanged, which will undoubtedly resolve the current embarrassing situation," the person said.

Takata incident: life-saving airbag turns into murder weapon

If the situation between Audi and SAIC can still be resolved, then Takata has undoubtedly been sentenced to death. It is understood that Takata airbags have a safety hazard of metal pieces flying out of the gas generator container, which has caused 16 deaths and 184 injuries worldwide. However, the problem of Takata airbags is not only the quality of the gas generator container itself, but there are other more serious reasons that lead to safety hazards of airbags.

In fact, Takata had already had a series of incidents in 2008 where its airbags had safety hazards and caused casualties. The use of ammonium nitrate in its airbags was exposed by the media. However, for eight years, Takata continued to do its own thing and continued to sell airbags made of the same material, which eventually led to the exposure of the incident and a global recall in 2016.

As the world's second largest manufacturer of automotive safety parts, Takata's customers include not only Japanese Toyota, Honda, Nissan, Mazda, etc., but also German BMW, Mercedes-Benz, Audi, American GM, Ford, and South Korean Hyundai. Since the Takata defective airbag surfaced in 2008, by the end of 2014, major automakers around the world have recalled more than 24 million Takata airbag vehicles. Including the number of recalls this year, Takata has recalled more than 60 million affected vehicles in the global market. Honda is the most affected among automakers, with a total recall of 19.6 million vehicles. This is also the largest recall in the automotive industry in history. From January to August this year, Dongfeng Honda has launched four recalls due to the "Takata airbag door" incident, involving more than 1 million vehicles.

It is reported that the recall costs of Takata's airbags are expected to be as high as 1 trillion yen (about 65.4 billion yuan), and its recall and litigation costs in the United States are still increasing. Filing for bankruptcy protection will enable Takata to determine the amount of debt as soon as possible so that it can quickly carry out restructuring. Therefore, Takata may apply for out-of-court restructuring to reduce the impact on customers.

Some industry insiders believe that it is precisely because of the industry monopoly and the lack of effective supervision that Takata's years of pampering have led it to take risks on a moral level. For the sake of profit, it is willing to gamble with the interests of its partners and even the safety of the passengers in the car, which ultimately leads to large-scale safety incidents.

Can the lifting of the ban on pickup trucks become the next growth point in the auto market?

When Takata and the automakers affected by Takata airbags were all in a state of panic, the Chinese government brought a "spring breeze" to the automakers. In March this year, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Public Security jointly issued the "Notice on Launching a Pilot Program to Relax Restrictions on Pickup Trucks Entering Cities and Promoting Pickup Truck Consumption". The "Notice" stipulates that in order to boost urban and rural pickup truck consumption, it is decided to launch a pilot program to relax restrictions on pickup trucks entering cities in Hebei, Liaoning, Henan, Yunnan and other provinces. The pickup truck market, which has been banned from entering cities for 30 years, has seen a relaxation of policies.

The pickup truck market, which has been dormant for many years, has received widespread attention. According to previous data, due to policy restrictions, pickup truck sales have been relatively sluggish in the past 30 years. In 2015, 16 major pickup truck manufacturers in China sold a total of 329,000 pickup trucks, a year-on-year decline of 16.2%. With the lifting of the ban on pickup trucks entering cities, whether the pickup truck market can become the next growth point after the booming SUV market has quickly become the focus of discussion.

Immediately afterwards, eight departments including the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Environmental Protection, the Ministry of Transport, the General Administration of Customs, the General Administration of Quality Supervision, Inspection and Quarantine, and the National Certification and Accreditation Administration issued the "Several Opinions on Promoting the Pilot Program of Parallel Importation of Automobiles", which clearly proposed to optimize the customs declaration, clearance, inspection and other processes of parallel imported automobiles, improve customs clearance efficiency, reduce customs clearance costs, accelerate the implementation of policies and measures for the pilot program of parallel importation of automobiles, and promote the effectiveness of the pilot work.

In fact, the continuous favorable policies have brought new development opportunities for luxury pickup trucks. Coupled with the downward profit margins in the now crowded SUV market, automakers have begun to target high-end pickup trucks.

The reporter observed that since the beginning of this year, the pilot program of pickup trucks entering cities in Hebei, Liaoning, Henan and Yunnan provinces has made companies including Jiangling, SAIC Maxus and JAC regard pickup trucks as an opportunity to open up the passenger car market.

However, data shows that pickup truck sales still fell by 1% in the first half of this year, while in 2015, 16 major pickup truck manufacturers in China sold a total of 329,000 pickup trucks, a 16.2% decline. "In recent years, the decline has mainly been in the pickup truck market below 80,000 yuan," a commercial vehicle market expert told reporters, "but the market growth rate of 80,000-100,000 yuan and above 100,000 yuan is still relatively fast." In his opinion, there is indeed demand for pickup trucks for private consumption, but the lack of products in the 80,000-100,000 yuan, above 100,000 yuan and 150,000 yuan range is a factor that suppresses this market.

"Automobile consumption demand has shown a diversified trend, while the pickup truck market has been suppressed for a long time. With the liberalization of the market and the increase in products, the pickup truck market may be activated due to the entry of private consumption." The above expert said.

However, there are different opinions on the claim that lifting the ban will boost sales. "The pickup truck market is unlikely to be truly accepted by ordinary consumers." Cui Dongshu, secretary general of the China Passenger Car Association, believes that there are two main limitations on pickup trucks in the passenger car market: most pickup trucks do not meet the city's road and parking standards and are not suitable for urban consumption; and it is difficult for large and medium-sized cities to truly lift the ban on pickup trucks due to environmental protection and safety issues.

Although pickup truck sales rebounded in May and June this year, Cui Dongshu believes that this is just a cyclical fluctuation of the pickup truck market itself, not driven by the lifting of the ban pilot policy. With the company's product layout in place, the main consumer market for pickup trucks may still be concentrated in third- and fourth-tier cities and township markets, and it is difficult to break through to the first- and second-tier markets.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.