Wuhan, China, October 18, 2013: The fourth annual Global Automotive Forum (GAF) opened yesterday at the East Lake International Conference Centre.
The three-day event sees over 700 participants from 18 countries, including over 70 speakers from China and overseas discuss key issues at the core of China’s automotive industry, provoke in-depth thought and broach constructive ideas for shaping the future of the automotive industry.
The theme for GAF 2013 is ‘The Future Development of the Automotive Industry – Target • Strategy • Implementation’ with the topics being ‘Urbanization and the automotive industry’, ‘Opportunities and challenges outside China’, ‘Financing services for furthering the development of the automotive industry’, ‘Attracting, retaining and nurturing global talent’ and ‘An insight into Chinese consumers’.
Wang Ruixiang, president of China Machinery Industry Federation, said that the automotive industry is an important symbol of social development and progress of science and technology. China’s annual production and sales have reached 19.27 million units and 19.3 million units respectively, accounting for a quarter of the global automotive industry. By the end of 2012, the number of cars owned increased to 120 million units, representing 10 percent of the total global volume.
He also said that while China’s automotive industry has made great strides, compared to developed markets, there remains a big disparity due to the lack of domestic innovation and imperfect supply chain, especially in the technology of core components. Theses conflict between the market and other sectors including energy consumption pressure, resources consumption, traffic condition and environmental protection prevents China from building a strong industry with globally recognized brands.
He called for developing core industries such as the automotive industry and driving new growth by entering into foreign auto markets, sharing global resources and cooperating with auto enterprises around the world.
According to Wang Xia, Chairman of CCPIT Automotive Committee, while China's auto industry has become the engine for development of the global automobile industry, the enormous challenges and problems should gain global attention. The solutions to these problems not only concern the development of China's automobile industry but also impact the global automobile industry. He said, “We should not only place more effort on product technology and marketing, but also remain concerned about the impact on the environment and our well beings. We must be active participants and plan ahead to avoid to heavy urbanization issues such as pollution.”
OEM heads debate on China’s auto industry
GAF saw an interesting debate in the seminar on ‘China’s Auto Industry: Its Future Role in China’s Economy and the Global Auto Industry’.
New development guidelines from the Chinese government for both joint venture enterprises and domestic Chinese automotive companies will have to have automakers work on redesigning their business strategy and rethink the following:
- How to relocate and do business in the Chinese auto market?
- What is China’s role in the global auto industry in the long run?
- What are China’s advantages and disadvantages in the global scheme of things?
Five senior executives from major automotive groups, including Zhu Fushou, general manager, Dongfeng Motor Corporation; Zeng Qinghong, general manager, Guangzhou Automotive Company; Amedeo Felisa, CEO of Ferrari SpA, Zhou Langhui, VP, SAIC Motor Corporation; and Fumihiko Ike, chairman and representative director of Honda Motor Co, exchanged ideas on the above topics and exchanged opinions with each other and the audience.
Dongfeng’s Zhu Fushou said: “China’s entry into the era of strategy and increased opportunity arouses our sense of mission and responsibility. Industry experts believe that the automotive industry will usher in a second ‘Golden Era’ of rapid growth. Actually, if we seize the opportunity, we can make it, otherwise, we are out.”
He said that three major issues could hinder the future growth path of China's automobile industry: the strategic stalemate between foreign brands and local brands will not change in the short term; the determination of Chinese enterprises to move towards the internationalisation process is irreversible and the road is far from smooth; and the contradictions between rigid demand for the car market and sustainable development of energy, transportation, environmental concerns are high on the agenda for current social issues.
Zeng Qinghong, president of GAC Group, spoke on his theory of ‘Three Accelerations and Four Leaps’ on what Chinese automakers should do in the period of strategic opportunity. He said companies should speed up their in-house innovation ability, especially the key components and core technology breakthroughs, drive forward integration and reorganization, and companies should accelerate the adjustment of economic structure. His four leaps include transformation and upgrading from pure manufacturing to increased R&D, leap from pure production bases to industrial base, leap from asset management to capital operation, leaping from product management to brand management.
While Ferrari CEO Amedeo Felisa said that the Italian carmaker spends a large amount of its R&D budget on fuel efficiency and emissions, SAIC’s Zhou Langhui made a further analysis of what Chinese companies face and need to do to gain further breakthrough in China's automotive industry, such as the understanding of rapid growth of car ownership and insufficient infrastructure within cities, the higher demands customers regarding product safety, environmental protection, in-car intelligence and vehicle individualization, and the thin line tread between cars and environmental concerns.