Declassification of the "Eleventh Five-Year Plan for the Development of China's Auto Industry"
"50% independent brand" computing standards disputes between parties
Although the concept is ambiguous, the 50% self-owned brand regulations have affected the strategy of the joint venture company.
Two notable examples are the recent launch of two new cars by Triumph (Quotation; Pictures) launched by Shanghai General Motors and LaCrosse.
In these two joint developments, the proportion of Chinese design has reached 50%.
If progress is fast, the Outline of the 11th Five-Year Development Plan for China's Auto Industry (hereinafter referred to as the “Outlineâ€) will be announced within two months. This is information that Fu Lianxue, deputy director of the Beijing Work Department of the China Automotive Technology and Research Center, who participated in the drafting and discussion of the "Outline", disclosed to reporters on June 7.
The "Outline" was drafted by the China Automotive Technology and Research Center's Beijing Department of Labor and submitted to the NDRC for discussion after the draft was formed. Up to now, the draft discussion paper has also solicited opinions in the industry.
Once the "Outline" has been announced, the future fate of the Chinese auto industry will be completely in its hands. "The independent brand must reach 50%". Has caused the domestic automobile enterprises, especially the joint venture manufacturers attach great importance.
After the “Outline†is formally introduced, it will focus on three core issues of “autonomous brand developmentâ€, “technological progress†and “structural adjustment†in the Chinese auto industry. The reporter learned from the relevant channels that the "Outline" will for the first time put forward the "autonomous brand must reach 50%" requirement for domestic auto companies. As of now, the Outline Discussion Paper has also solicited opinions in the industry.
Fuzzy self-owned brand ratio
The date for the introduction of the "Outline" is approaching. The most crucial issue concerning the strategic document of China's auto industry in the next five years - the status of independent brands - is still inconclusive.
According to the reporter's understanding, the draft discussion paper pointed out that the proportion of self-owned brands of auto companies should reach 50%. However, how the 50% ratio is calculated is based on the output of a self-owned brand in an auto company, or on the share ratio of the Chinese joint venture, or even calculated according to other standards. The outline does not specify.
In addition, whether the self-owned brand mentioned in the outline includes commercial vehicles is not described. If you include commercial vehicles, then for many auto companies, this requirement is relatively easy to achieve, otherwise it is more difficult. For pure passenger car companies, most companies do not meet the requirements if they do not include cooperative development and joint development.
Especially for the vast majority of joint ventures, there is no independent brand at all, so the proportion of self-owned brands is beyond discussion. If the program ultimately determines a higher percentage of self-owned brands, then for these companies, it is tantamount to facing an exceptionally severe test of survival.
However, according to informed sources, although the concept is ambiguous, the 50% independent brand regulations have affected the strategy of the related joint venture company.
Two notable examples are the recent triumphant launches by Shanghai GM of LaCrosse and Shenlong. LaCrosse introduced the chassis of the North American Buick with the same name. The overall design of the exterior and interior, the matching of the power system, the suspension adjustment and other aspects of the work were all completed by Shanghai GM. Similarly, Triumph is also a typical example of the joint venture's self-development. The car developed jointly by Shenlong and PSA is owned by the joint venture.
In these two joint developments, the proportion of Chinese design has reached 50%, which means that the requirement of 50% of independent brands has affected the product development strategies of Shanghai GM and Shenlong Automotive. A person familiar with the matter revealed that the outline's provisions have affected the strategies of the auto companies, and the proposals made by auto companies participating in the discussion of the outline have also affected the outline of the outline.
50% or 60%?
In addition to the unclear expression of the “50% independent brandâ€, the detailed description of the proportion of independent brands of passenger cars in the “Outline†is not clear. In several revisions of the "Outline", there were different opinions on the scope and proportion of self-owned brands.
In April, several media successively disclosed that the "Outline" (draft) pointed out that "the development of independent brands, and constantly improve the domestic market share of independent brand products, including the domestic brand passenger car market share increased to more than 60%." It is not yet clear whether 60% of the self-owned brand ratio of passenger cars is a modified version of the proportion of 50% of the entire auto companies' own brands.
For these two different expressions, Fu Lianxue said that the proportions of the independent brands and the calculation standards are still under discussion and are not disclosed at this time.
However, for the 60% ratio, many experts say that this goal is high. And the market share cannot be artificially set in advance. The proportion of self-owned brands is determined by market share, which in turn depends on consumer acceptance. It does not make sense to set an artificial ratio.
Regardless of how high the proportion of independent brands is set, how to choose a suitable calculation standard will be a problem. Independent division analyst Zhong Shi said that calculations based on production did not work. Ultimately, the output should be controlled by the market. The output will increase, but it will not be sold. It will eventually become inventory. It is also not feasible to calculate according to the designed capacity. Other reasons, such as insufficient investment, may make capacity planning empty talk. As for the calculation based on the share of China in the joint development, Zhong Shi believes this is just a trick for the joint venture to play.
Setting the Proportionality Controversy
In the discussion of the outline of what the expression of the establishment of independent brand position, one of the major environments that must be considered is that various industries are vigorously implementing the independent innovation policy put forward by the central government. The discussion and practice of the auto industry on self-developed and independent brands is also in full swing. Moreover, the industry has reached consensus on the view that independent brands are related to the future of China's auto industry.
Jiang Yizi, a well-known old expert in the automotive industry and a former chief engineer of China National Automobile Industry Corporation and a senior engineer at the professor level, said in an interview with a certain media that in the planning outline “it is necessary to specify an autonomy rate,†but “in a five-year plan It is not that easy to reach 60% in it."
The ratio of Chinese autonomy is now up to 20%-25%. Therefore, the person who was interviewed made this suggestion without exception: “The key to the development of self-owned brands is to create a completely fair competitive environment to promote the growth of independent brands. For example, the tax rate for unified domestic and foreign investment and joint ventures. , as well as other measures to encourage and promote development."
The reason is very simple, but it only rigidly stipulates the proportion of self-owned brands, and there is no concrete measure to push forward. The "Outline" itself serves as a guiding document that clearly stipulates that the proportion of self-owned brands seems strange.
Some auto companies also have reservations about their own brand ratios when they are interviewed. According to a senior manager of a joint venture company, “If the large state-owned auto groups have some provisions on their own brands and conduct appropriate guidance, it is still feasible. However, it is not suitable for those joint-stock auto companies and joint ventures and private enterprises.â€
It is clear that the development of private enterprises is their own brand. The entry of foreign auto companies into China is certainly not helping China develop its own auto brands. An industry insider believes that “if we place too much emphasis on self-owned brands, it will also threaten some interest groups in the current automobile industry structure.â€
View related topics: independent brands, where to go?
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