After decades of development, the Chinese automobile industry has grown into an important pillar industry of the Chinese economy. Its long industrial chain, high relevance, wide employment, and large consumer influence have infiltrated all aspects of social development and resident life. The development of the automobile industry is not only the industry itself, it is also related to the national economy and people's livelihood. Therefore, the state continues to improve relevant laws and regulations to standardize the automobile industry, and proposes policies and policies that adapt to the current level of development at different times to guide the healthy and orderly development of the automobile industry. At the same time, the development of the automotive industry is not only affected by market factors, but also by macroeconomics, policies and regulations, and needs to match the overall development process of the entire society.
The 19th National Congress of the Communist Party of China was held on October 18, 2017. Secretary General Xi made a report on behalf of the 18th Central Committee, summarizing the past and looking forward to the future. Although many specific guidelines, policies, and measures need to be introduced after the two sessions next year, the Nineteenth Congress has pointed out the direction for Chinaâ€™s future political, economic, and social development at a higher strategic level. These contents have very significant influence and guiding significance on the future development of the automotive industry. Therefore, we analyze the interpretation of the report of the Nineteenth Congress and look at the future of the automobile industry from the report of the Nineteenth Congress.
First, Chinese society has entered a new stage of development, and the automobile industry has also entered a new period of development.
The report of the 19th National Congress pointed out that â€œthe major social contradictions in our country have been transformed into the contradiction between the peopleâ€™s growing good living needs and unbalanced development.â€ This is the first change in the expression of major social contradictions from 1981 to the present. The changes in the major social contradictions are of great significance. This shows that our society has developed to a new stage, and the development goals, development lines, social environment, and policy principles and concepts faced by the new stage will be different.
Looking back at history, New China has experienced several stages of development. With the development of society, China's automobile industry has also developed into an automotive industry through continuous improvement, witnessing and participating in the progress and development of society.
After the land reform was completed in 1953, Chinaâ€™s main contradiction was â€œthe contradiction between the working class and the bourgeoisieâ€. Socialist transformation has become the main way to resolve conflicts. Therefore, in addition to promoting public-private partnerships to renovate old businesses and industries, the country also vigorously promotes industrialization. The eldest son of the Republic, FAW, was born in this social context. This is also the starting point of the Chinese auto industry.
In 1956, the partyâ€™s report on the Eighth National Congress pointed out: â€œThe main contradiction in China is already a contradiction between the peopleâ€™s demand for an advanced industrial country and the reality of a backward agricultural country. It is already the peopleâ€™s need for rapid economic and cultural development and the current economy. Culture cannot satisfy the contradiction between the needs of the people." In the same year, the first domestically produced car liberated the CA10 off the assembly line, and China began to have the ability to produce automotive products. The liberation of the CA10 until its production ceased in 1986, with the Chinese society entering a new stage.
In 1981, the "Historical Resolution" passed by the Sixth Plenary Session of the Eleventh CPC Central Committee pointed out: "After the socialist transformation is basically completed, the main contradiction to be solved by China is between the people's ever-increasing material and cultural needs and backward social production. Contradictions.â€ In 1987, the partyâ€™s report on the 13th National Congress further elaborated on this contradiction and proposed that â€œChina is in the primary stage of socialismâ€. During this period, the Chinese auto industry started a joint venture with foreign auto companies and entered a new era of rapid development. In 1983 SAIC-Volkswagen (the Shanghai Volkswagen of the same year) started producing Santana cars in a CKD quota. The Santana sedan became synonymous with cars. With the continuous increase in the localization rate of a large number of joint venture products, the Chinese auto industry has begun to continuously improve and form a complete supporting system and industrial chain, laying the foundation for the rapid development after the millennia.
If Chinaâ€™s social contradictions change from class contradiction to industrial and agricultural contradictions in China, the Chinese auto industry has achieved a breakthrough from â€œ0â€ to â€œ1â€. In the course of the initial stage of socialism, the Chinese auto industry has also realized The accumulation of "1" to "60". In 2021, when China is about to reach its first 100-year goal and enter its second century, China's auto industry will also achieve a qualitative leap from â€œ60â€ to â€œ100â€. The report of the 19th National Congress pointed out: By 2050, "it will build China into a prosperous, democratic, civilized, harmonious and beautiful socialist modernized country." This is not only the development goal of the entire country, but also the guiding program for all industrial development goals. While China has become a modern power, China's automobile industry must adapt to its development. China will certainly need to be among the strongest countries in the worldâ€™s auto industry, and Chinese auto brands must also go abroad to become influential global auto brands.
Second, China promotes balanced social development, and the main battlefield of the auto market will sink.
The â€œrural rejuvenation strategyâ€ and the â€œregional coordinated development strategyâ€ proposed in the 19th National Congress report echoed the contradictions of the new era and addressed the issue of â€œthe peopleâ€™s growing needs for a better life and imbalanced development. "Contradictions" are important measures.
With the rise of first-tier cities, the fact that the population has become increasingly saturated and the gap with backward areas has widened, as well as the growing â€œbig city diseaseâ€, it has to start to control the size of the city, share dividends with the surrounding areas, and seek virtuous circle and health. development of. The overall policy of â€œpromoting the simultaneous development of new-type industrialization, informatization, urbanization, and agricultural modernizationâ€ in the report of the 19th National Congress and the policy of â€œconstructing the coordinated urban development pattern of large, medium, and small cities based on urban agglomerationsâ€ will certainly lead to The demand for the automotive market has shifted to third-tier cities, even townships and rural areas.
The Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Pearl River Delta, and Chengdu-Chongqing several major urban areas that are currently formed with the first-tier cities as the core are the engines of economic development and have driven the development of the surrounding cities and the urbanization of villages and towns. The current policy of restricting the population and controlling the number of motor vehicles in major cities will also evacuate part of the population to surrounding areas. Intercity commuting is not only met through public transportation such as high-speed rail, public transportation, and subway, but also the demand for self-driving passenger cars and commercial vehicles for regional distribution will be further stimulated. Therefore, the peripheral areas of first-tier cities will be potential markets.
In 2009, the auto-to-country plan released the demand for cars in the rural market. The dependence of rural users on cars has shifted from the demand for transportation tools to the demand for transportation. The preference for buying cars in the rural market gradually shifted from micro- and low-speed trucks to MPVs, SUVs, and cars. In recent years, migrant workers have shifted from large-scale migration across provinces to nearby employment or even start their own businesses. Statistics from the National Bureau of Statistics show that after 2010, migrant workers in China began to show a tendency to return. On the one hand, the growth rate of migrant workers has slowed down year by year. In addition, the proportion of inter-provincial mobility has also been greatly reduced. Among rural migrant workers, the proportion of employees engaged in tertiary industry work and self-employment is getting higher and higher. Coupled with the urbanization and the â€œOne Belt, One Roadâ€ initiative, the demand for cars from rural users continues to grow. The â€œAccelerate Agricultural and Rural Modernizationâ€ policy proposed in the 19th National Congress of the People's Republic of China and the commitment to â€œmaintain stable and long-lasting land contractual relations and extend the second round of land contracting after the expiration of 30 yearsâ€ will further release the rural market. Demand for cars. "Broad worlds and great accomplishments" are also applicable in the current automobile field.
At present, the number of thousands of people in Chinese cars is less than 200, and there is still a huge gap with the developed countries. With the increasingly balanced social development, the potential of auto consumption in the Chinese market will be further released. Some people think that China has a large population and it is difficult to reach the level of car ownership in developed countries. However, although the population of China is mainly concentrated in the area east of the Hu Huanyong Line, the population of Japan is also concentrated in the metropolitan area. Moreover, China still has room for optimization in terms of road mileage, infrastructure, etc. It is unrealistic for thousands of people insured to reach the level of the developed countries in the United States, Europe and Japan in the short term, but it is far from being saturated with vehicles and there is still huge room for growth.
In addition, due to the huge differences in the current level of development between regions in China, multiple gradients have been formed. Therefore, automobile companies can have a huge span in their product layout, both to develop cutting-edge technologies for the needs of users in developed regions, and to gradually absorb technology and amortize costs in each stepped-down region. The huge space in the Chinese market has given companies enough time. This is a great opportunity for automotive companies.
Third, the change in demand for economic growth from quantity to quality promotes the independent R&D and creation of vehicles by Chinese automakers.
The report of the 19th National Congress pointed out: "China's economy has shifted from a high-speed growth phase to a high-quality development phase." Both the optimization and upgrading of traditional industries and the development of modern service industries need to aim at the improvement of international standards and "significantly enhance China's economic quality advantages." At the same time, he pointed out: "Innovation is the primary driving force for development, and it is a strategic support for the construction of a modern economic system. We must target the world's scientific and technological frontiers, strengthen basic research, and achieve breakthroughs in forward-looking basic research and leading original achievements." Therefore, the Chinese brand The automotive companies must focus on basic R&D, master core technologies, and gradually transform the core competitiveness of products from â€œcost-effectivenessâ€ to â€œqualityâ€.
From the development history of automobile developed countries and the growth experience of major auto brands, â€œprice advantageâ€ is only one aspect of product competitiveness, and â€œqualityâ€ is the core competitiveness of sustainable development and progress. Constantly improve the quality, increase the brand premium ability, in order to obtain the long-term favor of the market and users. Conversely, sticking to the low-price market will gradually be abandoned by users who are constantly escalating their demand. Typical Suzuki, in addition to the special needs of the Japanese K-Car, the main market of Suzuki gradually shifted from China to Southeast Asia. From the perspective of the sales share of various models in the passenger vehicle market in China, the demand for users has been increasing year by year, and sales of mini cars and small cars have been decreasing year by year, especially for mini cars, and their market share is almost negligible. Therefore, after the Chinese auto companies acquired the first barrel of gold in the low-end market and realized the survival and development of the enterprise in the past development process, they should focus on the improvement of product quality and service quality, and formulate the enterprise with a long-term strategic vision. Goals and vision. 2050 is not far away, but it is enough time to eliminate a large number of unreconstructed car brands.
In the initial stages of China's auto industry, referring to developed countries, advanced enterprises, and mature models, the practice of reverse development can be understood. However, after decades of development, the industrial chain and supporting systems have become increasingly sophisticated, and users continue to mature. Taking "shanzhai" as the main mode of product development is undoubtedly a radical way. Not only is it not conducive to the company's own development, but it also runs counter to the principle of "advocating a culture of innovation, strengthening the creation, protection, and use of intellectual property rights". It is of no benefit to the people and the country, and will eventually be eliminated by the flood of development.
Fourth, the formation of a comprehensive open structure, making Chinese car companies must go out and look around the world
Although China is the largest single market, it does not mean that China's auto companies will be able to catch the development express train. Over the past two decades, Chinese auto brands have been exporting automotive products one after another, but the volume is small and the target markets are mainly underdeveloped regions such as Latin America, Africa, Central Asia, and Russia. The report of the 19th National Congress pointed out: "Openness brings progress and closure is bound to lag behind. The door to China's opening will not be closed, it will only grow bigger and bigger. We must focus on the construction of the 'One Belt and One Road,' insist on introducing and going abroad." Geely Automobile has set an example for Chinese brands in this regard. From the independent research and development of engine to the acquisition of the core technology of the transmission, Geely has completed the layout along the â€œOne Belt and One Roadâ€ from the acquisition of Volvo to the inclusion of Hebao Teng. It is not hard to imagine that Future Proton will share platforms with Geely to develop automotive products and even OEM the Proton version of Geely models. In addition to its economic interests, this image of Geely Automobile and even the image of the Chinese auto industry is a huge improvement.
Therefore, Chinese brands must also go abroad to enter overseas markets. Low quality and low price should not be the labels of Chinese auto brands. Chinese auto brands must pass the development of overseas markets to test their ability and effectiveness in quality improvement.
Similarly, for foreign car brands, it is very important to deepen and localize the Chinese auto market. According to past data, companies that have done a good job of understanding and localizing the Chinese market and users have a good market performanceâ€”especially the adaptive development of automotive products. From the masses who first developed local models for the Chinese market, to the GM that established the Pan-Asian Automotive Technology Center in China, and even to the adaptive improvement of the Chinese market, Toyota and Honda have performed well in the Chinese market and have received excellent returns. . However, despite the specific reasons for the various companies that have continued to decline in recent years, there has been a common problem, without exception, which ignores the localization needs of the Chinese market and expects to eat overseas markets and the Chinese market only through the â€œglobal modelâ€.
As the largest single market in the world, Chinaâ€™s performance in the Chinese market will directly influence or even determine its overall development. The degree of emphasis on the Chinese market can even determine the life and death of a car company. However, we see that more and more foreign brands are aware of this, not only adaptable development of Chinese domestic models, but also gradually balance the global production capacity, using China as a production base to export overseas markets. In the report of the 19th National Congress, "Implementing a high-level policy of liberalization of trade and investment, comprehensive implementation of the pre-admission national treatment plus negative list management system, substantial liberalization of market access, expansion of service industry opening to the outside world, and protection of the legitimate rights and interests of foreign investors "The policy of the" will further boost the confidence of foreign auto brands in their investment, develop in synergy with the Chinese brand car companies, and provide better products and services for Chinese users.
V. Accelerating the reform of the ecological civilization system will also change the concept of car consumption.
The report of the 19th National Congress pointed out that it is necessary to â€œaccelerate the establishment of a legal system and policy orientation for green production and consumption, establish and improve an economic system with a green and low carbon cycle,â€ and â€œadvocate a simple and moderate, green and low-carbon lifestyleâ€. This is in line with the policy of promoting the development of new energy vehicles.
The electrification and electrification of automobiles are the trend of the times and the general direction of developing new energy vehicles is inevitable. However, the pace of development and the technical route need to be specifically considered. Compared with other countries, China has a low proportion of clean energy such as nuclear power and hydropower, and primary energy consumption relies heavily on coal. In addition, China's coal quality is not high and the rate of washing is low. Not only is the rate of steam coal washing for power generation low, there is even a large amount of raw coal sold and used. The poor combustion of coal causes serious environmental pollution. Under the current energy structure, the promotion of low-end electric vehicles and even the development of electric vehicles in the form of â€œoil-to-electricityâ€ cannot truly achieve energy conservation and environmental protection. Electric vehicles should be cut into the market from the mid-to-high end, and product development and high-performance batteries should be carried out under the premise of adequate cost budgets. Both performance and quality can be taken into consideration and production of low-priced pure electric garbage trucks can be avoided. Start with technological breakthroughs, gradually reduce costs, and ultimately achieve product popularity. This also coincides with the principle of â€œaiming at the forefront of science and technology in the world, strengthening basic research, realizing forward-looking basic research, and leading breakthroughs in original achievementsâ€ in the report of the 19th National Congress.
Green travel and low-carbon travel should be a reflection of the comprehensive effect of the entire society and various industrial chains, rather than the one-sided consideration of â€œreducing the loss of the mulberry treeâ€. This is also a concrete manifestation of "promoting the spirit of the model workers and the spirit of artisans, and creating a glorious social style of work and an dedication to excellence." How to combine enterprise development, technological progress, and comprehensive social benefits is a key point for the industry to consider.
With reference to the rise of the world's major developed countries, it is accompanied by the development of the automobile industry. This is not the case in the United States, Germany, or Japan.
Thanks to the huge gains in World War I, the United States began to become a developed country. With the rapid economic development and the large-scale construction of infrastructure after the second industrial revolution, the automobile industry in the United States has developed rapidly. Ford took the lead in adopting assembly line operations for production, which resulted in a substantial reduction in car prices. Cars are no longer exclusive to the rich, and they follow the American dream into ordinary families. At this time, the production of American brand cars accounted for more than 90% of the world's total production.
After World War II, Germany's automobile industry started to rise again under the promotion of the Marshall Plan. The popularity of the Volkswagen Beetle has enabled the goal of â€œevery German family has a carâ€ and the concept of the national car has far-reaching implications. When the Berlin Wall collapsed, Germany entered the automobile society. The development of the German automotive industry has helped it to quickly recover its economy and rank among the developed countries.
The rise of the Japanese auto industry also began after World War II. With the resident multiplication plan, the Japanese government proposed the concept of a national car. K-Car with Japanese characteristics was born in this period. Japan's model based on its own characteristics not only met the national conditions of Japan at the time, but also won the favor of overseas markets in the oil crisis. Product quality has become the biggest sign that Japan sells cars all over the world. As Japan becomes the worldâ€™s second-largest economic power, the Japanese auto industry has also grown to be the third pole of the world after the United States and Germany.
Similarly, the Chinese automobile industry will surely be an important pillar industry for China to grow into a modern power. Before the Nineteenth National Congress, the development direction of China's auto industry was clear, but there was no specific reference for the specific time. The report of the 19th National Congress of the People's Republic of China stated that by 2050, it is the goal of â€œbuilding China into a prosperous, strong, democratic, civilized, harmonious and beautiful socialist modernized countryâ€. In this direction of development, we painted the rule of time. During this period, industrial planning, development strategies, and policy orientation will all be tilted. This will be a great opportunity for the development of China's auto industry. Whether China's auto brands can rise up to become new lines of quality, reputation, and influence in the world after the US, Germany, and Japan will require deep thinking and joint efforts from the industry.
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