At present, China’s auto industry is at the forefront of the world‘s electrification and intelligence, and is entering a new stage of high-quality globalization. Opportunities and challenges coexist. How to use digital transformation to promote the coordination of the global industrial chain and enhance the influence of global brands? An important topic of concern for Chinese auto brands.
On the first day of the 2023 Shanghai Auto Show, the theme forum of “Sail and the New Journey of China’s Automobile Going to Sea under Digital Transformation” was jointly held by the Shanghai Municipal Council for the Promotion of International Trade and Tencent. This is the first time that the Shanghai Auto Show has focused on China in the form of a forum. The trend of cars going overseas.
The forum invited guests from Shanghai Council for the Promotion of International Trade, Shanghai Municipal Commission of Commerce, Embassy of the Republic of Indonesia in China, McKinsey, TÜV SÜD, Changan Automobile, SAIC Motor, Weilai, WirelessCar, Liangdao Smart, Tencent and other domestic and overseas governments Representatives of departments, industry associations and enterprises discussed the “New Journey of China’s Automobile Going to Sea”.
From “quantitative change” to “qualitative change”, Chinese automobiles need to strengthen overseas digital capabilities
Gu Chunting, vice chairman of Shanghai International Trade Promotion Committee, party secretary and chairman of Shanghai International Exhibition (Group) Co., Ltd., delivered an opening speech: “my country’s production and sales of new energy vehicles have ranked first in the world for eight consecutive years. The largest producer and consumer of new energy vehicles, as well as the largest exporter of new energy vehicles. In addition, with the strength of China’s independent automotive industry chain, it is possible to export vehicles from Chinese factories to overseas markets, and even develop global models in China. All of them prove from another aspect that the ways of Chinese cars going overseas are becoming more and more diverse.”
In the past two years, China’s auto exports have continued to rise. From January to March this year, China’s auto exports reached 994,000 vehicles, a year-on-year increase of 70.6%, of which the export of new energy vehicles reached 248,000 vehicles, a year-on-year increase of 1.1 times.
Zhang Guohua, deputy director of the Shanghai Municipal Commission of Commerce, shared at the forum the new trends of China and Shanghai’s auto industry going overseas. First, the structure of the export market tends to be high-end; second, the layout of the industrial chain tends to be global; , the proportion of new energy exports increased.
Today, my country has firmly established itself as the world‘s largest exporter of new energy vehicles, and has achieved a global leading edge in intelligence and electrification, gradually getting rid of the low-end label of overseas products. At the same time, Chinese auto companies are also continuing to increase the layout of overseas industrial chains, building innovative R&D centers, production plants, marketing centers, etc., to promote high-quality development.
In this context, building a digital infrastructure with global service capabilities, expanding domestic leading intelligent products and services overseas, and synergizing well with local industries has become the key.
Peng Bo, global managing partner of McKinsey, said that there should be no problem with the export of 4 million Chinese cars this year, surpassing Japan and Germany. At the same time, he also mentioned the problems of Chinese cars going overseas, “A large number of products are exported, not managed by local brands. We have seen that some Chinese brands already have stores and teams in Germany, and their sales are basically in the hundreds. Taiwan or even dozens.”
Peng Bo believes that these phenomena are mainly caused by the fact that car companies still basically follow the strategy and business model in China, and are not used to brand building. They have no other brand building except for new product launches, and there is no long-term doctrine mentality.
In terms of IT construction, Peng Bo specifically mentioned that some domestic car companies want to do BtoC and directly connect customers, but IT, cloud and services are not ready, nor have they built an ecosystem, resulting in poor user experience and direct store sales. The experience is not good, and there is no system of play.
In fact, with the rapid expansion of overseas markets, the complexity of global business and management has increased significantly. It is necessary to build a cloud infrastructure with global service capabilities to achieve efficient global management and collaboration, reduce costs and increase efficiency. Strengthen toughness.
Zhong Xiangping, vice president of Tencent Group and president of Tencent Smart Transportation and Mobility, said: “The layout of Chinese car companies in overseas markets needs to change from ‘products overseas’ to ‘value chain globalization’, especially in the field of intelligence, to improve products and brands. Competitiveness.”
Zhong Xiangping believes that the first step for Chinese car companies to enter overseas is to ensure that basic products can be efficiently deployed in the local market. “Shanghai cloud” can help car companies efficiently process data, quickly launch applications, accurately formulate overseas marketing and operation strategies, improve the company’s agile adaptability to changes, and achieve cost reduction and efficiency increase throughout the process.
At present, the solution adopted by most Chinese car companies is to use two clouds at home and abroad, or even multiple clouds. In a multi-cloud heterogeneous scenario, the complexity of deploying services for car companies increases, and it is difficult to unify the standards for development and operation and maintenance. This will cause companies to face very large time and economic cost challenges.
“Choosing a cloud with global service capabilities will allow car companies to expand overseas markets and achieve twice the result with half the effort.” Zhong Xiangping said.
This is also one of the entry points for Tencent to lay out the direction of the car going overseas. Based on the accumulation of serving overseas customers for many years, Tencent has built a car-cloud integrated and data-driven IT infrastructure on a global scale. At present, Tencent Cloud operates more than 1 million servers around the world, providing exabyte-level cloud storage services, covering 26 regions around the world, with 70 availability zones.
Tencent said that Tencent can ensure a global cloud, allowing car companies to provide services to users in various countries within a unified cloud system.
In addition, going overseas will face more data security compliance reviews. Tencent Cloud has also accumulated a lot of experience in overseas compliance, and has a professional local team that can provide compliance service support for car companies.
Peng Bo pointed out that going overseas is a long-term principle, and the capacity building of the system and ecology needs to form a win-win overseas ecology with car companies and ecological partners, and go global together.
Opportunities and challenges coexist, Changan, SAIC, Weilai’s overseas experience
At the end of the forum, the persons in charge of going overseas from Changan Automobile, SAIC Motor, Weilai Automobile, and Tencent had a round table discussion, starting from the practice of the car companies themselves, and summarizing the experience of going overseas.
“Now the overseas market shows a characteristic. The blue ocean is not blue, it is very red, and the red is a mess, including many domestic partners, Japanese, Korean, American, and German. Overseas competition is becoming more and more fierce.” Deputy General Manager of SAIC Overseas Travel Technology Co., Ltd. Lu Min believes that although Chinese car companies have many advantages in going overseas, they still need to face many challenges.
Among them are the challenges from geopolitics. Lu Min observed that Turkey has already taken certain restrictive measures on China’s electric vehicles, and Europe may follow suit. In addition, the pace of promoting vehicle electrification in Europe seems to be not as fast as in previous years. On the whole, overseas operation and maintenance are more risky than domestic operation and maintenance.
At the same time, the challenge of fragmentation in overseas markets cannot be underestimated. China accounts for one-third of the global auto market, while the United States and Europe are only half of China.
Taking the European market as an example, the linkage between the car-machine system, the Internet of Vehicles system, and the mobile phone APP developed by SAIC Overseas Travel will require 11 languages and 6 languages for voice recognition when it is first promoted to Europe. The workload is huge, but the sales volume and market volume are far less than the domestic market.
Therefore, SAIC Overseas Travel has adjusted the development model of the Internet of Vehicles. It used to rely on 100 to 200 people to stack technology to build the overseas Internet of Vehicles. Now it adopts the “three-three system” model.
“We will send some core technical forces and technical experience officers overseas, and the three will form a group to make local decisions and do localization in a small-scale way.” Lu Min introduced that through the new development model, the overall development has been greatly improved. The cost and operation and maintenance efficiency, the cost performance will gradually become prominent.
Aiming at the problem of fragmentation in overseas markets, Shen Xinghua, general manager of Changan Automobile’s Overseas Business Development Department, introduced Changan Automobile’s countermeasures.
Shen Xinghua said that in terms of product development, Changan Automobile tends to create global models. According to the plan, Changan Automobile hopes to create a variety of global models, including one model with a global sales volume of 500,000 vehicles, and two or more global models. Models with a sales volume of more than 300,000 units can be used to amortize development costs.
By 2030, Changan Automobile’s overseas market will achieve the “four ones” development goals, that is, the investment in overseas markets will exceed 10 billion US dollars, the annual sales volume in overseas markets will exceed 1.2 million vehicles, and the number of overseas business employees will exceed 10,000. A world-class car brand.
NIO, as a representative car company making efforts to go overseas among the new forces, is currently deployed in four European countries. Chen Chen, vice president of Weilai Automobile and head of European business development, said that Weilai has basically completed the domestic direct marketing system, digitization of user contacts, providing users with in-car ecological experience and technology related to battery replacement. full copy.
Although there is some controversy in copying the domestic experience, Chen Chen believes that users in any place will not reject a good experience. According to his experience in Europe, the Chinese approach is currently effective in Europe.
Chen Chen said that NIO attaches great importance to the localization of the team. In the first quarter of this year, 95% of the team’s colleagues are locals. Whether it is establishing an autonomous driving research and development team in Berlin or a sales and service team in Amsterdam, the degree of localization is different. It is quite high, which is the same as when Japanese and Korean companies entered the European market.
However, Weilai also faces the difficulties brought about by localized operations. Chen Chen mentioned that the research and development of most of Weilai’s car machines, autonomous driving and other technologies is done globally. The principle is to make global products and localize operations, but still need to deal with the EU’s General Data Protection Regulation GDPR) and other laws and regulations.
“Whether it is the internal digital management system, or the processing, storage, transfer, and use of user data, as well as the functions we have introduced in China that have been very standardized in China and related to car intelligence, such as the collection of human faces in the car , This may be very troublesome in Europe, we must design a very complex internal firewall to ensure that our data security is compliant, and these things are what we pay special attention to locally in Europe.”
Chen Chen said that NIO has also discussed a lot about long-termism internally. Going to sea is indeed a matter that requires long-term preparations and careful planning, and patience must be maintained in the process.
“The current situation is indeed not very good. Geopolitical issues, including the high interest rate in Europe, have added a lot of cost to our business in Europe.” Chen Chen believes that if you look at it in a longer time dimension, now is the time Very important window period.
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