Baidu,China’slargestsearchengine,launchesafullyautonomoustestonmixedroadsforitsself-drivingcar.TechniciansfromtheStateGridinstallchargingstationsinHangzhou,ZhejiangProvince.
AJaguardisplayedattheBeijingAutoShow2016.
THEdevelopmentofelectriccars,thegrowingdemandforsophisticatedsportscars,andthesynergybetweenInternetcompaniesandtraditionalautomakersformthelandscapeofthispromisingindustry.
Just30yearsago,thereweremorebikesinBeijingthancars.However,duringthesethreedecadestheChinesecarmarkethasgrownexponentially.In1999,thecountryproducedlessthantwomillionvehicles.In2013,itproducedandsold22million,morethanthecombinedtotalfortheUnitedStatesandJapan,countriesthatfollowChinaontheglobalautoindustrypodium.Lastyear,at24.6million,carsalesinChinareachedarecordhigh,accordingtotheChineseAssociationofAutomobileManufacturers(CAAM).
In2014,GermanautomakerVolkswagenchosetheBeijingAutoShowastheidealopportunitytopresentitsHoverCar,atwo-seaterdisc-shapedpodthat“levitates”afewcentimetersabovetheground.Duringtheexhibition,otherlargetransnationalfirmsfollowedsuitbyintroducingtheirlatestinnovations,sorevealingtheirconfidenceintheChinesemarket’spotential.
GDPgrowthandtheemergingmiddleclassaretwoimportantfactorsboostingthissectorinChina.However,inputfromtheChinesegovernmenthasalsoplayedakeyrole,accordingtoa2014industryreportjointlyconductedbyCEDARS(aconsultingcompanyinChineseautomotiveindustry),ChinaEuropeInternationalBusinessSchool(CEIBS),andIESEBusinessSchool.“Aftertheglobalfinancialcrisis,thegovernmentapprovedtheAdjustmentandRevitalizationPlanforAutomobileIndustrythatwasinforcebetween2009and2011.Theresultsweresignificant:Vehiclesalesincreased45percentin2009and32percentin2010,”thestudysaid.“Althoughthegrowthrateslowedinthenexttwoyears,oncetheplanwascompleted,salesagaingrewnearly14percentin2013.”
Atpresent,thefocusoftheChinesegovernmentisondevelopingnewenergycars.ThiswasevidentattheBeijingAutoShow2016,whereecologicalvehiclesaccountedformorethan10percentofthecarsondisplay.Althoughcurrentlysalesofelectricvehiclesaremarginal,itisclearthatthetrendisheadinginthatdirection.ManyChineseautomakersare,withgovernmentsupport,investinginresearchanddevelopmentofvehiclesthatdonotdependonfossilfuels.Chineseauthoritieshavepubliclydeclaredtheirintentiontomakethecountryaworldleaderinnewenergyvehicles.Thedevelopmentofgreenvehicles,includingelectriccars,ispartofapolicythathasthreeobjectives:reducingthecountry’sdependenceonimportedoil,mitigatingadverseeffectsontheenvironment,andcatapultingChinatoleaderofcleantechnologies.
Developingnewenergyvehicles,whereinelectriccarspredominate,wasanexplicitgoalinthisyear’sReportontheWorkoftheGovernment.However,oneoftheprimaryfactorsinfluencingconsumers’decisionstobuyelectriccarsistheavailabilityofchargingstations.Giventhisconcern,theBeijingmunicipalgovernmenthasstatedthatby2020therewillbechargingstationssufficienttosupply600,000electricvehicles.Thedistancebetweenchargingstationsinthecity’sdowntownwillbelessthan0.9kilometers,asthegovernmentplan.Ithasthesupportofmaincarbrandswhoarealreadypreparingtomeetthatfuturedemand.
OneexampleisVolkswagen,whichlastAprilannounceditsplantolaunchinChinasevennewelectriccarmodelsinthenextthreetofouryears.
SymbolofIndividuality
TheincreasingappealofelectriccarswasnottheonlytrendapparentattheBeijingAutoShow2016.WhiletheSUV(sportutilityvehicle)remainsinhighdemand,thesportscoupeisalsogainingground.Theseprestigiouscarsarecharacterizedbytheirsophisticateddesignandhighprice.Theyalsoreflectanewtypeofconsumerwhogiveshighprioritytoluxury.Generallysingleyoungprofessionalswithhighpurchasingpower,suchconsumersseecarsasawayofsignifyingtheirindividuality.Forthem,thecarisnotafamiliargood,butastatussymbol.Thischangeinconceptionopensupawholerangeofopportunitiesforautobrands.
Accordingly,AudiunveiledattheBeijingAutoShow2016thesportscoupeTTRS.Porsche,meanwhile,introduceditssportscoupetype718,andJaguarpresenteditsXFL,anextendedversionoftheEnglishmidsizesedan,assembledinChinaandmanufacturedspecificallyforthismarket.
NewPlayers
LocalandforeignmanufacturersagreethatChinaisanenticinglypromisingmarket.Internetcompaniesalsowantasliceofthepie.LastDecember,Baidu,China’slargestsearchengine,announcedthatitsself-drivingcarhadcompletedafullyautonomoustestona30-kmrouteofmixedroadsunderdifferentweatherconditions.Baiduisoneofthetechcompaniesjockeyingtoenterthecarmarket.Googlehasthesamegoal,alongwithSamsung.InDecember2015,theKoreanfirmannouncedtheestablishmentofanewdivisionwithinthecompanytaskedwithinvestigatingautotechnologies.
Doesthisrepresentathreattothebigcarfirms?Notnecessarily.ItcanalsobeseenasanopportunityforInternetcompaniestoformsynergieswithautomakers,wherebyeachbringsitsaccumulatedknow-howtotheirrespectiveindustries.ItwouldnotbethefirsttimethatChinesecompaniesestablishedandfosteredjointventures.GeneralMotors,forexample,signedastrategicalliancewiththeChinesestate-ownedSAICMotorCorporation,basedinShanghai.AnothercaseisVolkswagen,whichmanufacturescarsjointlywiththeSAICandFAWgroups,thelatterastate-ownedcompanyinChangchun,JilinProvinceinNortheastChina.
TheseallianceshaveenabledforeignfirmstosettleinChinafarmoreeasilythaniftheyhadtriedtogoitalone.TheyhaveatthesametimebenefitedChinesefirmsbyenablingthemtoabsorbtheknowledgeoflargeGermanandJapanesecompaniesthathavespentyearsandmillionsonresearchanddevelopment.SuchpartnershipshavealsocontributedtotheinternationalizationofChinesefirms.OneexampleisthatoftheGreatWallCompany,whichenteredintoapartnershipwiththeBulgarianLitexMotorswiththeaimofconqueringtheEuropeanmarket.GreatWallannouncedinMarch2012itsopeningintheBulgariantownofLovechofafactorywhereautopartsproducedinChinaareassembled,andwhichproduces50,000carsayear.TheysellmainlyinBulgariaandneighboringcountries.
Withcarspricedat€8,000andpickuptrucksat€15,000,GreatWallexpectstogaingroundrapidlyinthecompetitiveEuropeanmarket.ThelowpricestrategyhasworkedsuccessfullyincountriesofEasternEurope,AfricaandLatinAmerica.ButifChinesemanufacturerswanttobecometruegloballeaderstheyneedtofocusboththeirinvestmentandeffortsonresearchanddevelopment.