Experts discuss: The future development path of Chinese brands

Innovation drives the rise of independent brands

China's passenger car market has grown rapidly in recent years, especially after the policy of halving the purchase tax for vehicles with a displacement of 1.6 liters and below was introduced in October 2015. In the past year or so, China's passenger car market has maintained rapid growth, driving the rapid rise of Chinese auto brands.

"From the market perspective, China's passenger car market has grown rapidly in recent years and has entered a medium-to-high speed stage. Two major changes have taken place in the market: First, the growth rate of joint venture brands has slowed down, and Chinese brands as a whole have risen rapidly, ushering in excellent development opportunities. Last year, overall joint venture growth was only 2.3%, while Chinese brands grew by 15.3%. Chinese auto brands grew by 20.08% year-on-year and now reach 42.%, with a market share that has increased by another 1.66 percentage points. Second, the structure of independent brands has undergone profound adjustments. Excellent independent brands have accelerated their growth, while weak independent brands have declined." Wu Song, deputy general manager of GAC Group and chairman of GAC Passenger Vehicle, said at the forum.

According to statistics from the China Association of Automobile Manufacturers, from January to October 2016, China sold 19.0958 million passenger cars, a year-on-year increase of 15.40%. Among them, Chinese brand passenger cars sold 8.1295 million units, a year-on-year increase of 20.08%, accounting for about 42% of the total passenger car sales. During the same period, the sales of German, Japanese, American, Korean and French passenger cars were 3.6987 million, 2.9834 million, 2.3234 million, 1.3627 million and 493,100 units respectively, accounting for about 58% of the total passenger car sales. After years of catching up, Chinese independent brands have made great progress in the automobile market, with a market share close to half of the country.

In-depth analysis shows that there are many reasons. The first is innovation-driven, including innovation in products, technology, brand, management and business models of independent brands... The global automotive industry is currently facing three major changes: energy conservation and emission reduction, new energy vehicles and intelligent networking, which have led to earth-shaking changes in the definition, design, manufacturing, production and even sales and use of automobiles. "The automotive industry has entered a special period of comprehensive change. The automotive industry, enterprises, products, technology, as well as automotive society and culture are all being redefined," said Zhao Fuquan, dean of the Institute of Automotive Industry and Technology Strategy of Tsinghua University. If automobile companies still rely on the previous model at this time, it will be difficult to continue to gain a foothold in the market. Only innovation can achieve breakthroughs.

In the past two years, some independent brands have gradually explored ways to survive under the background of industrial transformation. They no longer closely follow joint venture brands and rely on government promotion, but independently build brand core competitiveness to improve the overall level of the enterprise. They may benchmark international standards and carry out strategic innovation, such as global talent strategy, introduce a large number of high-end foreign scientific researchers, and use high-tech talents to drive product and technology upgrades; or start from the R&D and production system, continuously innovate R&D and production concepts, improve processes, and provide platform support for product and technology innovation; or absorb and learn from the successful experience of excellent domestic and foreign brands, and carry out production and marketing methods with their own brand characteristics under a deep understanding of the Chinese automobile market environment and the characteristics of their own brand development; or build independent high-end brands, and align with international standards in terms of product quality, technical standards, safety, etc.; or innovate in management mechanisms and corporate culture, build simplified and standardized working methods and processes, and create brand characteristics. In addition to the above, another very important change is to actively embrace emerging industries such as new energy and intelligent networked vehicles, and seek new opportunities for brand development, with remarkable results.

At present, excellent domestic brands such as Geely, Great Wall, Changan, and SAIC have become more and more mature in terms of technology, quality, safety, etc., and the gap between them and joint venture brands is getting smaller and smaller. In particular, some domestic high-end brands have made breakthroughs, such as Trumpchi GS8, Changan CS95, Roewe eRX5, and the recently released Great Wall luxury SUV Weipai, which have continuously surpassed joint venture brands in terms of styling, interior, workmanship, quality stability, engine performance, and driving experience, refreshing the inherent views of domestic consumers on domestic brands, driving Chinese people to consider domestic brands more and more in the process of automobile consumption, and giving domestic brands new development opportunities.

Opportunities and challenges coexist, and there is still a long way to go to achieve self-improvement

With the rise of China's independent automobile brands, although Chinese automobile brands have gradually occupied a place in the domestic and even international automobile markets, independent brands still face many challenges if they want to truly compete with joint venture brands, or even go abroad to compete with international automobile brands.

First, there is a lack of good products. This does not mean that Chinese independent brands do not have good products. In the just-concluded November, the sales of Great Wall Haval H6 exceeded 70,000 units, setting a sales record for independent brand SUVs. Among the top ten passenger car models, there are 5 independent brand models, and among the top ten SUV models, independent brand models occupy 6 seats, which fully explains everything. However, there are too few such good products at present, especially in the sedan market, where product competitiveness is still quite limited. For example, there were no independent brand products in the top ten sedan market sales in November, indicating that the competitiveness of independent brands is still very limited and needs to be further improved in the future. In addition to seeking survival space through the cost-effective and differentiated route of SUVs, the improvement of sedan technology, quality and management cannot be ignored.

Secondly, the manufacturing technology is relatively weak and lacks core technology. Although the current domestic independent brands "have rapidly improved their independent level and have also grown greatly in volume, their independent development capabilities in manufacturing technology are relatively weak," said Zou Hengqi, director of the Manufacturing Branch of the China Society of Automotive Engineers, when talking about the "Energy-Saving and New Energy Vehicle Manufacturing Technology Roadmap." In fact, not only new energy vehicle manufacturing technology, but also traditional automobile manufacturing technology, especially some core technologies, are still in the hands of international automobile companies. However, many places abroad have very strict protection of patents. Even if there is a cooperative relationship, these key technologies cannot be accessed and can only be purchased at a high price, let alone mastered. Therefore, if domestic independent brands want to rise, in addition to working hard to develop good products, it is also important to master one or more core automobile manufacturing technologies, and this technology is best to ensure that independent brands are "super competitors" in the market and dominate the market competition.

Furthermore, the ability to introduce, train and reserve high-tech talents needs to be improved. This point was mentioned by many experts at the forum, such as Minister He Guangyuan's "talents gather, industries prosper", GAC General Manager Wu's "talent internationalization", and Shanghai International Automobile City (Group) Co., Ltd. Deputy General Manager Yang Haibing's "innovation is inseparable from talents, and the reason why automobiles gather in this way is also inseparable from various high-end talents". Zhu Mingrong, Executive Vice President and Secretary General of the China Automobile Talent Research Association, bluntly stated that "the development of China's automobile industry is the core of technology and the key is talent". He said that although the number of talents in my country's automobile industry has increased significantly in recent years, there is still a general lack of talents as the "first productive force". It is estimated that by 2020, the talent gap in the entire automobile industry will reach more than 1 million, especially in the fields of new energy vehicles and intelligent networked vehicles. The gap is even greater in emerging markets. This requires domestic brands to formulate appropriate talent strategies based on current trends in industrial change, optimize the talent structure of the automotive industry, increase investment in R&D talent, actively build a talent training platform for the automotive industry, encourage independent innovation among automotive talents, increase the introduction of high-tech talents and encourage automotive talents to go global, etc., and cooperate with multiple companies and institutions to cultivate and reserve automotive talents from multiple aspects, providing talent support for domestic brands to break through.

In addition to the above points, the coordinated development of vehicle companies and parts companies is also an important aspect. As Minister He said, "Only when independent parts are strong can China's automobile industry be strong", which is the core idea of ​​the development of my country's automobile industry. For a long time in the past, both the central and local governments paid more attention to the main engine manufacturers and ignored the parts companies. Whether they were policy support or financial support, they were more inclined to the main engine manufacturers, resulting in an imbalance in the development of parts and main engine manufacturers. "There is a dependence on key parts. A large part of the whole vehicles of independent brands depends on imported parts." From the market level, foreign-funded and joint venture enterprises in the domestic automobile market account for more than 50% of the industry's profits with less than one-third of the number of enterprises and output, while most of the independent parts companies rely on low-price competition to survive.

Fortunately, in recent years, some domestic brands have begun to support the development of their own parts companies. Although overall, there is still a big gap between domestic parts companies and foreign-funded or joint venture companies, China's automobile industry, including complete vehicles and parts, has made great progress in recent years. Today, against the backdrop of major changes in the global automobile industry, independent companies have gradually found a direction to break through. In time, China will surely be able to make the leap from a "big automobile country" to a "strong automobile country"!

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.