New forces enter the next growth pole of the Chinese auto market

Every two years Beijing International Automobile Exhibition held in Beijing soon, as the first opening drama in the Chinese automobile market, Beijing Auto Show has always been a contested place for car companies, this year is particularly different. A number of new vehicle manufacturers including Weilai Automobile, Weimar Automobile, Beiteng Automobile, Aiqi Automobile, Shanghai Normal Motors, Yundu Automobile, and SITECH Xinte Automobile all participated in the exhibition, and they will surely become the auto show. The most dynamic and colorful group of groups.

Indeed, under the era of great changes in the "new four modernizations" of the electrification, intelligence, interconnection, and sharing, and the automotive industry, new forces that cross the border into the automotive industry have caught up with the "opportunity for a hundred years." According to statistics, at present, there are more than 60 new car manufacturers in China. However, the new vehicle builders will also experience more than one round of industry reshuffle before the “time window” is closed. Therefore, the time left for them is not enough. Everybody rushes to the Beijing Auto Show to debut, and they want to use this as their focus. Starting point, rewrite the pattern.

Weapons and brave winners

According to the plans of the new vehicle manufacturers, many companies' products will be launched this year. Cui Dongshu, secretary-general of the National Passenger Vehicle Market Information Association, told the Times Weekly reporter: “2018 is the key year.” So, they collectively vocalized the Beijing auto show and even clashed with traditional car companies – Weilai Automobile and Audi In the same exhibition hall; Weimar Automobile and Leadke are in the same pavilion; Beiteng and Infiniti are in the same pavilion.

According to incomplete statistics, confirmed to participate in the Beijing Auto Show, the new forces manufacturing companies include Weilai, Weimar Automobile, Beiteng Automobile, Ai Chi Automobile, Zhengdao Automobile, Yundu Automobile, Xinte Automobile and so on. These new forces are not only full of confidence, but also full of courage.

In the face of aggressive new vehicle manufacturers, traditional car companies are also doing their best. The new midsize SUV ES6 of Weilai Motor will be presented at the Beijing Auto Show together with the super running EP9 and ES8 production models, as well as the “Second Living Room” concept car EVE. Audi announced that it will bring home the new Audi Q5L, Audi RS 5 Coupe, Audi Q7 e-tron and many other models to play, Wei Lai can take the move?

The first production vehicle EX5 of Weimar Automobile and the second model EX6 join hands on the platform, and the appearance of Offspace SUIT, Beiqi's new concept car, fully reflects the highest strength of its own brand. When Beiteng came up with the first concept car BYTON Concept, the design of future technology is eye-catching, and the lead is a new species. The new ideas and new style of play are not inferior to the innovation of Beiteng Auto. thinking.

Financial support does not disrupt

In terms of capital competition, the traditional car companies and new car builders are not short of money. However, venture capital firms only pay for profits and do not interfere excessively with business operations, which is a lot less restrictive than traditional car companies. In the Chinese market, ordinary joint-venture brands, down to Hyundai, Kia, up to Volkswagen, Buick, and domestic companies share a 5:5 peer-to-peer structure in terms of equity and control, which has been successfully introduced for them in the past 20 years. New models and expanding market share in China have played a key role. But now, with the overall market entering the zero-sum game stage, and the full rise of independent brands, especially the bold financing of new car builders, the disadvantages of this equity structure are more and more exposed.

First of all, this shareholder structure corresponds to higher corporate governance costs, leading to low-end joint-venture brands in the future difficult to attack their own brand upside, for example, the joint venture company needs to set up two overlapping managers in a single job, the Chinese one, outside One party, and the compensation and benefits of the foreign staff is much higher than the foreigner’s income abroad; secondly, this shareholder structure leads to the inefficiency of the joint venture’s decision-making. The most notable example is the investment in the application of the car network. The T-box of the joint venture vehicle model is significantly lower than that of the autonomous vehicle makers. Third, both shareholders are willing to directly inject their costs into the joint venture rather than waiting for the final dividend. For example, the Chinese shareholders must pay for the transfer of technology to the foreign shareholders. The fee, which passed the cost to the joint venture company, was clearly the same dream.

The financing of the new vehicle builders is not small, and the financing of Weimar Automobile and Weilai Automobile has exceeded 10 billion scale. However, the money is the betting behavior of the investors. The funds are not involved in management, but are entirely free to create new forces for the founders of the new forces and the entire start-up team to toss, everyone is lightly mounted.

Filling short board lock throat

For the new forces manufacturers, financing is a straw. Because these start-up companies do not have sufficient financial resources, they must rely on financing to build cars. However, once problems arise in the capital chain, companies will be very passive, which is a great risk and challenge. After two consecutive years of financing, many companies in the head are likely to have encountered problems, in addition to the head of several companies still getting soft in one round. For example, the financing situation of FF car companies has always been veiled. Although foreign investors claim that financing is already in place, they have never disclosed any specific figures. In addition, Yundu Automobile, which had announced the start of the first round of financing in August last year, has not disclosed any relevant information yet. Companies such as God’s secretive company also have Kaiyun Automobile. A car company that focuses on the township market has no other news after completing A-round financing last year.

For traditional car companies, innovation is a fatal issue. In fact, Toyota, BMW, GM, Nissan and other traditional car companies, "Elephants," are turning around, and the speed is not slow. Earlier this year, Toyota’s chief announced that Toyota’s future will be a mobile travel company, no longer a car company, and that competitors will also be transformed into tech giants such as Google, Apple and Facebook. This is not the first announcement. Transforming car prices.

Prior to this, BMW has made it clear that it will be a technology company in the future. Audi, PSA, Volkswagen, Guangzhou Automobile, Geely, Chang'an and other auto groups have also made it clear that they will transition from traditional automakers to mobile travelers.

In terms of electrification, intelligence, interconnection, and sharing, the speed of innovation by traditional auto makers has even made the new forces of automakers somewhat out of pace. Last December, Toyota signed a cooperation agreement with Panasonic to develop R&D for square-shaped batteries for electric vehicles. General Motors also submitted an application to the U.S. Department of Transportation, and plans to put the fourth-generation Cruise automated car safely into use in 2019. This is the first mass-produced car that can safely drive without the driver, steering wheel, and pedals.

Zhang Guofu, deputy secretary of the Party Committee of Beijing Automobile Co., Ltd., told the Times Weekly reporter that, according to the Beijing Automotive Plan, the model with the L1 auxiliary system will reach volume production status in the second half of this year. By 2019, models equipped with L2 auxiliary systems will reach volume production. At the same time, the L3 class autopilot technology is considering R&D and is expected to be mass-produced by 2020. These imaginative new technologies come from traditional car companies, rather than start-up companies. It can be seen that the traditional car companies are actively seeking changes and reject the phenomenon of Kodak and Nokia.

Sales is the king

From the perspective of sales of new energy vehicles, the traditional car prices are still quite strong. For example, Beijing Automobile New Energy sold 8,876 vehicles in March, an increase of 24% year-on-year, and cumulatively sold 21,251 units in January-March; BYD Auto sold 68,611 vehicles, including new ones. The sales of energy vehicles accounted for 23% of the total; sales of SAIC Roewe New Energy in 2017 amounted to 44,234 units, an increase of 121% year-on-year; Chery’s new energy vehicles sold nearly 40,000 units in 2017, an increase of 113% year-on-year.

Although the new forces manufacturers have set a very high sales target, the goal of the network transmission of Weilai cars is 30,000 this year, and the sales target of Yundu is 35,000. However, for these new forces of internet builders, It is extremely difficult for the first mass-produced car to achieve a red-hot effect. The initial success of the start-up brand is usually achieved in the third car, Tesla is no exception.

On March 21 this year, the Xiaopeng Automobile 1.0 production model passed the review of the vehicle management office of the Guangzhou Traffic Police Detachment and officially obtained the first special number plate for new energy vehicles. This is also the first new energy vehicle number plate produced by China's new force to produce cars. It marks that China’s new forces have entered the substantive stage and have officially entered daily life. However, the rapid introduction of market-recognized products is the king of these companies. Newly built car companies have inherent advantages in the genetic aspects of the Internet. However, compared with traditional car companies, there are still relatively few aspects in terms of body manufacturing and industrial chain layout. With the layout of traditional car companies in new energy vehicles, it is particularly important for new car manufacturers to grab market opportunities.

Zhong Shi, a senior analyst in the automotive industry, told the Times Weekly reporter that in the new round of automobile revolution, the traditional automobile industry is still the protagonist. However, in the next few years, the competition between new car manufacturers and traditional car companies in the two directions of new energy and autonomous driving will become more intense. However, in the current era of fan economics, both traditional car brands and emerging car brands need to establish a closer emotional connection with the consumer in the brand, get the people first, and then get the world.