Transformation and High Quality Development: Second Half of China's Automotive Industry China | Intelligence | Second Half
From June 8th to 9th, the 2023 China Automotive Chongqing Forum was successfully held at the Chongqing Yuelai International Convention Center with the theme of "Shaping the Future of the Industry in the Era of Change".
Two days, 16 forums, led by 12 industry leaders, attended by over 70 guests, witnessed by over 100 companies, over 150 journalists, and nearly 600 attendees. The topics covered covered include the implementation of intelligent driving, the pros and cons of artificial intelligence, overseas market trends, new consumer trends, and more.
Almost every industry leader mentions two key words: change and high-quality development. The Chinese automotive industry has entered the second half, and the rapidly advancing track will become even more intense: in the future, it will not only be the competition between traditional fuel vehicles and new energy vehicles, but also a battle to reshape the industrial chain, eliminate cutting-edge technologies, and compete in domestic and foreign markets. Both enterprises and upstream and downstream supply chain manufacturers face opportunities and challenges.
As stated by Wang Xia, Chairman of the Automobile Industry Committee of the China Council for the Promotion of International Trade and President of the Automobile Industry Chamber of the China International Chamber of Commerce at the opening ceremony, "China's automobile industry has entered the second half of high-quality development from the first half of winning by quantity. We need to seize the" bull's nose "of innovation, coordinate major issues, implement green concepts, and achieve the fundamental goal of sharing with an open attitude and a globalized pattern."
There were many key highlights throughout the conference, and several industry elites shared the latest enterprise information and technological achievements. The following key summaries were made for everyone to share.
How to seek high-quality development?
During the "Opening Plenary Session", Zhu Huarong, Chairman and Party Secretary of Changan Automobile, Zeng Qinghong, Party Secretary and Chairman of Guangzhou Automobile Group Co., Ltd., Chen Hao, Deputy General Manager and Party Committee Standing Committee Member of Dongfeng Automobile Group Co., Ltd., Yang Xiaodong, Vice President of SAIC Group, Zhang Xinghai, Chairman of Sailis Group, Chen Yudong, President of Bosch China, and Yu Kai, Founder and CEO of Horizon, delivered keynote speeches on "the automotive industry under the new development pattern.". Zhu Huarong believes that in terms of regional and national proportion, market competition advantages and disadvantages, product structure, and zero point competition pattern, it is predicted that the Chinese automotive market can reach 40 million vehicles per year, and the penetration rate of new energy vehicles will reach 70% to 80%. By 2030, the market share of EV, XEV, and ICE products will reach 4:3:3. At the same time, with the transformation and upgrading of the automotive industry, more than 90% of new forces will be shut down and transformed.
Zhu Huarong also pointed out that the division of labor in the automotive industry is in an unstable state, and the business boundaries are being restructured. It is expected that by 2025, China will require a power battery production capacity of 1000-1200GWh. Currently, the industry's production capacity plan has reached 4800GWh, and there is a severe overcapacity. The industry will inevitably return to a rational state.
Zeng Qinghong proposed five industry trends: bid farewell to the golden age of high growth comprehensively, and the market will present a long-term and fierce competitive posture; The elimination round is accelerating, and some international and domestic brands will struggle to survive; Independent brands will fully grasp the mainstream price range of electric vehicles and the discourse power of "Big Three Electric"; Artificial intelligence accelerates iteration, and rebotaxi may experience explosive growth in the future; OEM is transforming into data and software companies, and customer experience based research and development and services will become core capabilities. How should automotive companies strategically lay out in the face of challenges? His viewpoint is: "It's difficult to have money, people, mechanisms, and underdevelopment."
Regarding quality improvement and upgrading, Chen Hao shared three experiences: maintaining clarity, facing real problems, and leveraging the strength of the entire industry to break through key technologies; Building an innovative, complete, and resilient industrial chain, and collaborating with upstream and downstream enterprises to tackle key issues; Adhere to market orientation and seize the commanding heights of new energy vehicle development.
Zhang Xinghai's personal experience is: "Developing intelligent connected networks and new energy vehicles must be done by professionals. No enterprise can simultaneously possess the leading core capabilities of intelligence, connected networks, and electrification. There is no hope in fighting alone. Only through open cooperation and deep integration can economies of scale be fully realized."
Yu Kai believes that in the past, the latest technology in the automotive industry has always been developed in the European, American, and Japanese markets, and then applied to the Chinese market. However, now China has become the most advanced intelligent market.
How far is the distance of unmanned driving?
Liu Weihong, co-founder and president of Black Sesame Intelligent Technology, pointed out that the current autonomous driving technology has matured, and it is expected that the penetration rate of new car autonomous driving in China will exceed 60% by 2025. Intelligent driving will be implemented in some urban areas by the end of this year, and L3 autonomous driving will be implemented in batches before 2030.
Gu Jianmin, Chief Technology Officer of Valeo China, summarized that the development of intelligent driving needs to go through three stages: upgrading from passive safety to active safety; Implement driver assisted driving; Free your eyes, feet, and hands completely from the car. Of course, the real implementation of autonomous driving also faces challenges such as regulations and scenarios.
Liu Renliang, R&D Director for the Asia Pacific region and General Manager of the Chongqing R&D Center of the Continental Automotive Networking and Architecture Business Group, pointed out that in recent years, automotive users have begun to be willing to pay for software functions, which means that future smart cars need to have four conditions: first, a safe and free wheel; The second is a high computing power system; The third is a highly reliable networked system; The fourth is a convenient interactive system.
Liang Fenghua, Deputy General Manager of Changan Automobile Intelligent Research Institute, has determined that the development of intelligent driving to its ultimate state is still a long way off and requires a protracted battle. In the past three years, there will be opportunities for commercial implementation of autonomous driving on urban main roads.
How can the automotive market break through the "roll"?
The Party Secretary and First Executive Vice President of Jiangling Automobile Co., Ltd. stated that the reshuffle of the automotive market is accelerating, and the segmented market is even more "accelerating". There are three aspects to breaking the "roll": first, rethinking the relationship with customers; The second is to continuously provide customers with deeper needs and value; Thirdly, while providing products to customers, we also provide them with a way of life.
Li Xueyong, Deputy General Manager of Chery Automobile Co., Ltd., General Manager of Chery Automobile Marketing Company, and General Manager of Jietu Automobile, said that gasoline cars determine survival, hybrid cars determine life and death, and electric cars determine the future. There may only be 8-10 car companies with sales exceeding 10000 yuan in 2025, with hybrid cars accounting for 40%, gasoline cars accounting for 30%, and pure electric cars accounting for 30%.
In the eyes of Yang Dayong, Executive Vice President of Changan Ford Motor Co., Ltd., "rolling" will strengthen the sense of crisis in the enterprise. The process of "rolling" is actually a feast for the participants, and the keyword for this period is "boiling". If you can endure it well, the spring flowers will bloom, and if you can't endure it well, you will roll up and leave. As for how to endure it? Reduce costs and increase efficiency, focusing on the norm.
Will ChatGPT overturn cars?
In the eyes of Vanessa Moriel, co-founder and director of LIASE GROUP, ChatGPT is a tool and a huge threat: "I will never recommend customers to use it. You can use ChatGPT as an application to understand what customers want, but I don't think artificial intelligence is a good tool to understand customers."
Wang Bo, General Manager of the Intelligent Cabin Business Department and Delivery Center of Baidu's Intelligent Automobile Business Unit, introduced that the core of ChatGPT is the big language model. With the emergence of big model technology, the way voice interaction will undergo revolutionary changes. Looking ahead to the future, large models will become a turning point in improving the level of voice interaction, making the cabin more intelligent.
Wu Zhenyu, Vice President of Shanghai Shangtai Automotive Information System Co., Ltd., also believes that large models can help realize the dream of full interaction between humans and vehicles: "Nowadays, artificial intelligence is difficult for cars to truly understand human intentions, but ChatGPT based large models have opened the door to the future for us."
Someone once proposed that 2020 is the first year of autonomous driving, but so far, autonomous driving still needs a long development process. This is the main reason why Wang Zheng, Vice President of Business at Heduo Technology, is unwilling to let ChatGPT make predictions about the future of the automotive industry. He believes that autonomous driving faces two contradictions: artificial intelligence and mass production implementation.
Looking ahead to the future, Wang Huan, Vice President of Sales and Director of Automotive Industry Consulting at Negaro China, stated, "We are very confident that in the coming years or even months, some leading automakers will iterate intelligent co pilot based on generative AI - the AI agent for the entire vehicle, issuing instructions to large language models through modules, generating operation sequences or plans to execute operations."
How to insight into new trends in automotive consumption?
Zhang Guofu, Executive Vice General Manager of BAIC New Energy and Executive Director of Jihu Automobile, introduced that currently, in the consumption structure of new energy vehicles, the proportion of consumers aged 25-34 is close to 50%, and female and high consumption car owners have surpassed gasoline cars. At the same time, the preferences and selection logic of the brand camp are changing, and more emphasis is placed on use value.
In the eyes of Xiao Yong, Deputy General Manager of Guangzhou Aian New Energy Vehicle Co., Ltd., there are great opportunities in the new energy vehicle market for B-class and C-class products. Currently, when consumers choose high-end new energy products, there is no other high-end brand imprint except for Tesla. Therefore, by 2030, there will be 2-3 high-end brands formed in addition to Tesla.
Qiao Xinyu, Executive Vice President of the Haval brand, predicts that plug-in hybrid power will show huge market potential this year or next. The outbreak of the PHEV market from January to May means that urban electricity and long-distance fuel consumption have solved consumers' range anxiety and charging worries.
What is the potential of hybrid "rivers and lakes"?
Liu Peng, Deputy General Manager of Toyota Motor Investment Co., Ltd., pointed out that Chinese consumers have a high acceptance of new energy vehicles, and the infrastructure supporting them is very good. Therefore, Toyota will also increase its investment in pure electric products in the Chinese market, but will not "bet" on a certain technological route. Hybrid power, hydrogen energy, etc. will be considered.
Hu Tiegang, General Manager of Changan Automobile Power Research Institute, predicts that in the future, A-class cars will have the largest user group in the Chinese market, with product sales priced between 100000 and 200000 yuan accounting for approximately 50% of the annual sales.
Qi Hongzhong, Assistant Dean of GAC Research Institute and Deputy Director of Powertrain Technology R&D Center, pointed out that both the motor and engine have defects. The motor defect is torque output, while the engine defect is high energy consumption. However, the combination of the two can solve the above problems. Therefore, the two are a perfect combination, a natural match, and their long-term existence is beyond doubt.
Where are the opportunities for reshaping the industrial chain?
The Deputy General Manager of Zhejiang Geely Automotive Parts Procurement Co., Ltd. stated that the overall supply chain level of China's automotive industry has become relatively mature with years of accumulation and development, and the level of independent supply chain has made significant progress. However, there are also some shortcomings in areas such as high safety level intelligent driving and intelligent cockpit. In the future, China's automotive industry can leverage its scale advantage to expand and strengthen its industrial chain.
Li Feng, Vice President of Xiaopeng Motors, pointed out that in recent years, the Chinese software market has developed rapidly and talent has gathered, which is a natural advantage for new energy and intelligent connected vehicles. The most important aspect of software is still quality and safety. The domestic software market has not yet formed clear standards, and many plans are still being explored.
Chen Yunran, Deputy General Manager of China Electronics Technology Puhua Basic Software Co., Ltd., believes that with the rapid development of new energy and intelligent connected vehicles, software is increasingly valued. Previously, there was a vertical chain structure between host manufacturers and suppliers, but with the rise and popularization of software applications, they began to develop towards a network structure, which requires the industrial chain to be more professional and refined.
The founder and CEO of Automobile Ltd. emphasized that supply chain development should be demand navigation aggregation. China is the largest material user, and material processing is a major component of the electric vehicle market cake, which is also an important reason why Chinese electric vehicle brands can compete with Tesla in a price war.
