Automotive companies: Do not speak for profits

This is a heavy topic, but it is also a topic that we must face now. The gap between China's auto industry and its international counterparts is, concretely, the gap between companies and enterprises. So how can a company gradually shorten the gap between us and the rest of the world? How can a company make our auto industry get out of today's lively and embarrassing scene?

This company must be self-reliant, otherwise it is not enough to entrust this task; this enterprise must be self-reliant, otherwise it is not enough to assume this responsibility.

Self-reliant companies are responsible for their own

"To profit, not to speak up" has become a true portrayal of a large number of joint venture car companies. In most joint-venture car companies, foreign companies occupy a dominant position in all aspects, including product technology, parts and components support, and management and marketing. Regarding this status quo, it is not a bad idea to say that the Chinese partner of the joint venture “does not reconcile” or “do nothing”. The reality is that when we are striving to learn advanced technology and business concepts of foreign companies, our enterprises must also retain their “right to speak”. From the very beginning, it was in a passive position, including model launching, technical standards, parts procurement, brand image, business management, and sales services, and it was easier said than done to “persistence in discourse”.

At present, due to policy restrictions and foreign ownership is not yet allowed, multinational corporations have to use 50% of their shares to enter China at the expense of China’s huge auto market, but they are out of their own global strategy and Occupation of China's auto market considerations is intended to weaken our ability to independently develop new automotive products in our joint ventures and to control key aspects of technological development in order to obtain actual control of the joint venture. Some experts have warned in this regard that once the policy is loosened, almost all foreign parties will not hesitate to seek control or sole proprietorship. The Chinese side will at any time be in awkward situations when there is basically no capacity for car development. The domestic automobile market has become the world's largest multinational company competing for the world, which has become a major hidden danger affecting the development of China's auto industry.

See what foreigners say. According to the "Asian Wall Street Journal" report, Nissan Motor Co. President and CEO Ghosn recently said at the Tokyo International Motor Show that Chinese auto makers contribute almost nothing when working with foreign automakers. He said that Chinese partners typically hold 50% of the shares in joint ventures with foreign automakers. This is the price that foreign companies such as Nissan Motor Co. Ltd. have entered into China's booming auto market.

Ghosn said very straightforwardly. The implication is that if China's policy allows, foreign automakers will certainly shake off their Chinese partners. Needless to say, this is exactly what many multinational car giants think. It can be seen that under the umbrella of the current automobile industry policy, if Chinese auto companies cannot rapidly expand their own strength, in the future market competition, the industry’s fear may be their “survival rights”.

The booming prosperity of the auto market has to some extent masked the "dead spots" of the Chinese auto industry - weak development capabilities, declining national brands, and lagging development of key components. How to put aside the prosperity of most auto companies brought about by the rise of the industry, more sense of crisis, more sense of responsibility, how to use the 50% of shares held today, and fully learn about foreign technology research and development, so as to make their own hands The above 50% is more attractive. It is a problem that every Chinese automobile industry's business managers need to think about. And from a technical point of view, due to the maturity of traditional automotive technologies and the development of computer technology, today's automotive product development is not only more scientific and faster, but also significantly lower development costs. It can be said that currently the technical team that wants to train product development has mastered the existing technology. It is more difficult than the past to spend more, but it is easier and more economical. However, today our auto companies seem to have turned their attention to profit more. This tempting word, on the contrary, how to master the core technology has become a topic that everyone avoids. However, we must realize that without its own brand and technology, more than half of its equity can't be equal. Although the joint venture has provided a shortcut for China's auto industry, it must also be noted that when taking shortcuts and making profits become a trend, this short-cut is not far from its bottom line.

Relevant investigation and research shows that enterprises with an annual output of 300,000 can support the development of the vehicle body. Enterprises with an annual output of 500,000 vehicles can support the development of engines, and an annual output of 1 million vehicles can support the development of the entire vehicle. In China, almost all of the joint venture partners of large foreign companies have reached the capacity for vehicle development. The core technology is usually not in the hands of the Chinese side. On the contrary, a group of small and medium-sized enterprises such as Chery and Geely should not have been the vanguard of R&D capability, but they have surpassed some joint ventures and large-scale enterprises and have taken the lead in independent development. Just as the Geely Group CEO Xu Gang commented: "There is no ready-made thing, but there is a free sky." In the 20 years since the joint venture of the Chinese automobile industry, it has been technically hampered and has lost its overall sense of autonomy. As a non-mainstream enterprise, it has no choice but to start its own business. It has no choice but to rely on its own efforts. Simply from the point of view of corporate earnings, there are no own brands, and the difference is very great. The rapidly growing automotive market has made these once free but helpless companies have good expectations and deep understanding of “capital control” and “brand ownership”.

Self-prepared enterprises plan ahead

At present, the prosperity of the Chinese auto industry has caused many auto companies to immerse themselves in the sea of ​​happiness. However, happiness is always relative, but the struggle is absolute. Any self-reliant Chinese auto company will bring high prosperity in this boom. Behind the profits, we should all contribute to narrowing the distance between us and the global automotive industry.

After more than 10 years of hard work, why has Chinese autos not yet developed its own capabilities? Some people pointed out sharply that cars are now more than sales, profits, and profits in the industry. Therefore, it is not the capital and talent that the auto industry is currently lacking in R&D. Instead, it is a clear strategic idea that is courageous to be independent and good at self-reliance. The ultra-high profits of the automotive industry are indeed exciting, and the situation in which the supply of cars is in short supply is also very easy to intoxicate. However, if behind this prosperity, high profit cannot make any contribution to the development of the industry. Without market selection, in the coming year of 2006, the first year of the protection period of the WTO agreement will taste the bitterness that he planted.

The famous American economist Leisesteruo said: China must have its own development ability and brand to achieve economic success. Although he is not concerned with the automotive industry, this sentence is particularly important for the automotive industry. The scholar said that in the short term, China can rely on others to promote products made in China in other parts of the world; but in the long term, China’s economic success must have its own brand and it must have its own products in the world. The ability to open up the market. The reason for the two “must” is simple. He took the example of producing a pair of sports shoes from US$10 to the United States selling US$120 in China. The key to the problem is not how to produce, because everyone can produce it, but how to sell it. In fact, in recent years, China's footwear industry has tasted the ambiguity of not having a brand and design ability to develop the market. The mainland produces 6 billion pairs of shoes every year. The average export value is only 2.5 US dollars per pair, and the foreign brand is worth ten times or 100 times. increase. It can be seen that there is no front-end product development capability, and there is no back-end market development. Only satisfying “made in China” results in less investment and less accumulation. It is naturally impossible to achieve economic success in the long run. Therefore, we must learn how to develop products and use their own brands to open up markets, achieve real “Made in China”, and seize the front and rear ends to achieve the goal of national prosperity and people's affluence while achieving economic growth. Otherwise, China, like other developing countries, is in danger of being marginalized.

The idea of ​​awaiting the development of self-inflicted capabilities will never stand the backbone of a national car. However, it is gratifying that many domestic companies have begun to take this responsibility and started their own road to self-reliance. As a result, SAIC Motor, which was technically tempted by people's tastes, when renewing a 20-year cooperation contract with the public, also raised the level of R&D technology as an important condition and placed it at the negotiating table; Hafei did not look for it in order to have independent property rights. Instead, the foreign automakers chose Italy's Pininfarina Automobile Design Company to cooperate and asked the Italian side to answer the technical reasons for the “why” proposed by the Chinese side as a negotiating element. As a result, Hafei developed the ownership. The "Chinese-Italian" of own property rights.

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