Is the cross-border car building boom going to be a ticket or something else?
On the one hand, the “Matthew effect” of the domestic automobile market has become prominent, and some weaker car companies have gradually faded out of the track; on the other hand, as electrification and intelligent technological changes have brought new opportunities to the automotive industry, some IT companies have tried Make good use of the "Internet gene" that you are proud of to enter or prepare to enter the automobile manufacturing industry.
So, does the Chinese auto market still have enough market space?
Are new and old players competing or uniting?
It is worth thinking about by everyone.
Photo courtesy of Visual China
One of the most eye-catching news in the auto circle on both sides of the Pacific Ocean is the sudden rise of the "cross-border car building fever" again when it is another year to bid farewell to the old and welcome the new.
On February 19, some media reported that Xiaomi had decided to build a car and regarded it as a strategic decision, or that it would be led by the founder of Xiaomi Group, Lei Jun.
And just the day before, Baidu Chairman and CEO Robin Li disclosed the progress of cooperation between Baidu and Geely Automobile.
Earlier, Japanese and South Korean media had announced that Apple in the United States had discussed cooperation with automakers such as Hyundai and Nissan to produce electric vehicles.
This can't help but remind people of the "car-making craze" that once emerged in various places after China joined the WTO at the beginning of this century.
There was a ridicule circulating in the industry at that time: "If you can't do anything else, just build a car."
However, different from the background that the auto market sales increased year after year, now the Chinese auto market and the Chinese economy have entered a new round of transition and upgrading.
On the one hand, the “Matthew effect” of the domestic automobile market has become prominent, and some weaker car companies have gradually faded out of the track; on the other hand, as electrification and intelligent technological changes have brought new opportunities to the automotive industry, some IT companies have tried Make good use of the "Internet gene" that you are proud of to enter or prepare to enter the automobile manufacturing industry.
So, does the Chinese auto market still have enough market space?
Will these new players who cross-border car-builders succeed or go astray?
Build a car like a smart phone?
Although today's car is far from what it just came out, building a car is still not a simple project.
The automobile industry has always been regarded as a capital-intensive and technology-intensive industry. Now, due to the rise of electrification and intelligent technology revolution, its technology content and capital-intensive industry are increasing.
Someone once said that spending billions of dollars on home appliances and IT may be considered a "big deal", but it seems a little "pediatric" to talk about building a car.
"As a commodity, automobiles account for a larger share of household expenditures, and consumers tend to rely more on brand effects. Therefore, from this perspective, if new players in cross-border car manufacturing want to grab customers from traditional car companies, they must first Work hard to build brand trust.” Pan Helin, executive director of the Institute of Digital Economy, Zhongnan University of Economics and Law, believes that the current competition in the new energy vehicle market has become fierce.
He analyzed that in addition to the traditional car companies that are actively transforming, new car manufacturers such as Tesla and Weilai have occupied a certain market position. At this time, Internet technology companies including Apple have joined the battle. Getting smaller and smaller, "It is still unknown whether these cross-border technology companies can win the trust of customers and survive."
However, a fact that cannot be ignored is that, whether it is Apple, Xiaomi and other technology companies, or traditional car companies, almost as long as they release news related to cross-border car manufacturing, they can trigger the enthusiasm of the capital market.
As soon as the news of "Xiaomi builds a car" came out, Xiaomi Group's share price rose straight, and the increase once expanded to 10%.
Subsequently, the Xiaomi Group first responded simply: "Wait and see, there is nothing for the time being." Then it issued a voluntary announcement on the Hong Kong stock market: "The group's research on the electric vehicle manufacturing business has not yet reached the formal project stage."
"Nowadays, car manufacturing is already the outlet of the capital market. Once a company reveals a car-building plan, it will bring stock prices up, which also reflects capital's admiration for car-building. So it is not surprising that technology companies are keen on cross-border car manufacturing. Pan Helin analyzed that because smart electric vehicles are bound to have an impact on traditional fuel vehicles, the market potential is huge; coupled with the strong relevance of the automotive industry, entering the field of car manufacturing means artificial intelligence, 5G and other emerging technologies. Technology will have greater application space and deeper service penetration. "Therefore, there is a lot of room for imagination in the market value of cross-border car manufacturing and company valuation."
“The development of automobiles into smart terminals is the general trend, and this will bring a huge market cake.” Senior media person and auto industry analyst Yang Xiaolin said bluntly, all signs indicate that smart electric vehicles are still in the air, and there may be more in the future. There are more new players participating in "cross-border car building".
He judged that, just as the popularity of smart phones opened the door to the mobile Internet economy, smart electric vehicles will also bring greater imagination to the integration of "traditional industrial economy + digital economy".
In fact, smart electric vehicles have long been regarded as the next traffic entry after smart phones.
Whether it is the cross-border car manufacturing of Apple, Xiaomi, and Baidu; or Internet manufacturers such as Huawei and Tencent have launched their in-vehicle service platforms, all trying to lay out the smart driving market and seize new outlets for the mobile Internet.
West China Securities analyzed that China is expected to become the world's largest intelligent driving market, facing the market scale of 200 billion yuan.
According to IDC's forecast, the scale of the global smart driving car industry will exceed USD 1.2 trillion in 2035, and the scale of China's smart driving car industry will exceed USD 200 billion.
"Intelligence requires scenes, and driving scenes have the characteristics of closed, high interaction, etc., which are very suitable for intelligent applications." Pan Helin told reporters that smart electric vehicles may become a new generation of smart terminals comparable to smart phones. .
"For consumers, the most obvious benefit of smart electric vehicles is that they make tedious driving safer, more convenient and comfortable. From an industrial point of view, it actually combines the two originals of smart technology and automobile manufacturing. Unrelated industries are linked together to form a larger automotive industry chain.” Pan Helin believes that cars built by new car-building forces should be known for their science and technology. “Most of these new players are in artificial intelligence and other technological applications. Be ahead of traditional car companies. Secondly, they do not have the historical burden of traditional car companies. Finally, in terms of marketing models, some new ways and concepts of new car-building forces are more attractive."
Neither "stick kill" nor "to kill"
Due to China's vast geographical environment and the natural diversification of the automobile market, whether it is a top luxury car that can cost millions of dollars or a scooter that can cost tens of thousands of dollars, there are consumers of their own.
Therefore, brands and companies of all levels can survive.
With the opening of the third decade of the 21st century, the scene of "producing one model and one model" and "almost every family makes money" no longer exists.
The previous lesson of the collapse of the LeTV Empire shows that the competitive logic and role of smart electric vehicles are very different from those of smart phones.
“Smart electric vehicles are not only consumer electronics products, but also industrial products with a wide range of parts and complex processes.” Cao Guangping, an independent researcher of new energy vehicles, reminded that smart electric vehicles will bring users a completely new use of functions, content and experience, but In contrast, the future automotive industry will usher in a reshuffle in R&D, design verification, software, AI support, OEM production, travel data, and platform operations.
Pan Helin emphasized that from upstream smart chip component manufacturing, midstream artificial intelligence research and development, large database processing, and downstream automotive component assembly manufacturing, the industrial chain of smart electric vehicles is stronger and more relevant.
Some people say that competition in China's auto industry has become increasingly fierce, and on the track of smart electric vehicles, companies that are truly competitive have not yet appeared, and companies think that they may become a dragon and a phoenix.
In this sense, the competition in China's auto industry has just begun.
The development experience of various countries has shown that the auto industry will move from "a hundred flowers blooming" to mergers and reorganizations, with only a few winners in the end.
"China's economy must have a structural adjustment, and the concentration of many industries must be improved, and the future trend must be concentrated." Li Daokui, Dean of the Institute of Important Economic Thought and Practice of Tsinghua University, said in the media recently that due to the current industrial concentration The degree is too low, many companies are crowded inside, and each company is not large in scale, and the benefits are average.
Taking the example of the automobile industry, he said that there are currently at least 50 automobile companies in China, many of which are small in scale and can only produce tens of thousands of traditional energy vehicles a year.
"In the next ten years, most of these companies will definitely be reorganized. To be conservative, in the future (domestic car companies) will not exceed 10 or even 5."
"The scale of the enterprise must be large, and it must have scale benefits." Li Daokui believes that the adjustment of industrial structure and the increase of industrial concentration are the general trend. "This is the basic law of market economy development, and it is also our two-cycle smooth domestic cycle. One of the only ways to go."
The China Association of Automobile Manufacturers predicts that during the "14th Five-Year Plan" period, my country's automobile industry will experience a round of transformation and upgrading.
In 2021, the total sales volume of China's auto market is expected to reach 26.3 million vehicles, a year-on-year increase of about 4%, which will show a slow growth trend; the auto market will also grow steadily in the next five years, and vehicle sales are expected to reach 30 million vehicles in 2025.
"Smart electric vehicles will accelerate the adjustment of the industrial structure and cultivate some new upstream and downstream enterprises." Cui Dongshu, secretary general of the National Passenger Vehicle Market Information Association, said that the current two technological highlands of the smart electric vehicle track are electrification and intelligence. However, Chinese car companies started relatively early in these two areas and have certain advantages.
"Although smart electric vehicles are already the darling of the capital market, they are still far from meeting the needs of consumers." Cui Dongshu said frankly that smart electric vehicles have not yet formed a dislocation competitive advantage over smart phones. "For example, many smart The actual experience of the car-machine system is not as good as the car owner installing a mobile phone holder in the car."
"The recognition of new car-making forces in the capital market may be much greater than the recognition they receive in the consumer market." Yang Xiaolin said bluntly that laymen will face some challenges in car-making.
Even Tesla, which has an annual output of 500,000 vehicles, has encountered some difficulties in capacity expansion, product consistency and product intelligence and safety supervision.
He reminded that companies should return to rationality in the pursuit of capital from all sources. “If they just rush to build cars just because they can drive the company’s stock price to rise, it’s hard to say whether this quick success will have a counterproductive effect.”
"The auto industry has always pursued scale, scope, and brand effects. With the advent of cross-border car manufacturing, market competition will become more intense, and the Matthew effect of'the stronger the stronger, the weaker the weaker' will become more obvious. The process of mergers and reorganizations between the two countries will also be accelerated.” Pan Helin said that when the funds ebb, a large number of small businesses will eventually be merged and reorganized.
"This is a cruel reality and an inevitable phenomenon of industrial development."
Cao Guangping analyzed the global auto industry structure and said that as the transition period of joint venture stock ratio opening is about to end, more foreign capital will inevitably flow in. “It will be difficult for auto companies that cannot keep up with technological development and market trends to survive.”
In any case, a new round of car building craze is coming. Are the new players playing tickets or have other meanings?
How the parties will neither "stick to kill" nor "to kill" are two major issues worthy of everyone's thinking.
China Youth Daily·China Youth Daily reporter Xu Yajie