10 years of accession to the WTO

Profile picture: Guangzhou Auto's first self-owned brand car “Chuan” offline Xinhua News Agency reporter Lu Hanxin

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Recently, the United States "Fortune" magazine released the latest ranking of the world's top 500 companies in 2011, Dongfeng, SAIC, FAW and Changan, and other four Chinese auto companies on the list. However, analyzing the profit distribution of these companies is not difficult to see, the joint venture brand's contribution is far greater than the own brand. Xu Changming, director of the Information Resources Development Department of the State Information Center, recently stated at the 2nd China Brand Auto Expo: “The key to entering the world’s top 500 is to rely on independent brands, and the largest number of joint venture brands is only the top 500 in the world!”

The best 10 years of China's auto industry

“This is the best time. This is the worst era.” This is a famous quote in Dickens' Tale of Two Cities. It can also be used to describe the 10-year history of the Chinese automobile industry from 2001 to 2011.

2011 was the tenth year of China's accession to the WTO (World Trade Organization). It was said that the ten years after China’s accession to the WTO was also the best and fastest time for the development of the Chinese auto industry. Recently, the “2011 China Automotive Industry Development Report” (hereinafter referred to as the “Report”) jointly compiled by the Department of Industrial Economics of the Development Research Center of the State Council, the China Automotive Engineering Society, and the Volkswagen Group (China) was released in Beijing. The report shows that in the past 10 years, China’s auto sales have increased from 2.07 million in 2000 to 18.26 million in 2010, sales have increased nearly 9 times, production capacity has increased by nearly 8 times, and China’s auto sales accounted for the proportion of global auto sales. It also increased from 4.27% in 2001 to 22.38% in 2009, becoming the world's largest automobile production and sales country.

In 2001, there were only four independent brands producing cars in China, and the market share was only 16.6%. By 2010, there were 14 companies producing their own brand cars in China, and the market share was close to 40%. However, we must admit that so far, the main products of self-owned brand car companies are still concentrated in the low-end models, how to raise the image of the company, to open up the competitiveness of enterprises is still the problem that the independent brand must face.

Joining WTO demands and co-existence

Profile picture: BAIC Group's first self-owned brand BC301Z offline Xinhuanet Zhang Zhengyi

Liu Shijin, deputy director of the Development Research Center of the State Council, said that before joining the WTO, relevant departments had predicted that joining the WTO would have a huge impact on the agriculture, finance, and automotive industries, and Fu Yongwu, executive vice chairman and secretary of the China Automotive Engineering Society. Also frankly: "10 years ago, in the face of joining the WTO, everyone's hearts filled with longing and worry."

Fu Yuwu told reporters that at that time, China’s auto industry did not have an advantage in technology, capital, and services. Therefore, at that time, relevant government departments worried about whether the Chinese auto industry could adapt to the new situation after opening the market and lowering the threshold. Face the impact of foreign-funded enterprises and foreign-funded products. “To this day we have seen that the Chinese auto industry has not only been washed away but has also achieved rapid growth,” he said.

It is true that accession to the WTO has brought about significant changes in the internal institutional and institutional nature of the Chinese automobile industry. Fu Yuwu believes that, first of all, the open market encourages personal consumption and cars enter the family. As of 2009, China's private ownership of 38.08 million passenger cars was 10.4 times that of 2000. Second, the opening up has brought about major institutional changes, and private enterprises such as Geely and Chery have entered the automotive sector. In addition, after opening the door to the country, through joint ventures and cooperation, China's own brands have obtained certain benefits at both technical and management levels. He said frankly that in reviewing these 10 years, there were both concerns at the time and changes today, but in the end China's auto industry was pushed into a healthy development track.

Future development still faces many challenges

At the 2nd China Brand Auto Expo recently held, Xu Changming, director of the Information Resources Development Department of the National Information Center, said that at present, China's own brand cars are facing three new environments: First, the scale of multinational car production in China continues to increase, and costs The reduction has led to a reduction in the cost advantage of self-owned brands. Secondly, many joint ventures have launched their own independent brands. The joint venture's own brands have certain advantages in production and sales, which will have an impact on the self-owned brands. In addition, the cost of comprehensive use of automobiles continues to increase, and as people who purchase self-owned brand products are more sensitive to the cost of use, the increase in use costs will directly affect sales of self-owned brands.

Chery, Brilliance, Huatai and other self-owned brand car companies admit that they have encountered such problems and challenges to varying degrees, but there is no clear solution. Xu Changming pointed out that the increase in the cost and cost of self-owned brands is rapid, but the performance, quality, and especially the promotion of the brand are slow, and the two do not match. Under such circumstances, self-owned brand companies must develop and be sustainable. To continue to grow and develop, new ideas must be developed.

As for the development of self-owned brands, Xu Changming suggested that companies need to change from quantitative growth models to quality growth models, and to implement a robust and firm internationalization strategy. Group companies need to focus on the entire group to develop their own brands instead of simply establishing them. A self-owned brand company; in addition, he also called on the government to give more substantive support to independent brands in product development, project approval, taxation, and consumption.