Dong Haiyang’s call for “another road†for self-owned brands in joint ventures has given a unique voice to the Chinese automobile industry. Yes, we should be bright swords, or we can make a bloody road
The cries for Chinese autos to engage in independent brands are rising every day.
The country has also begun to have some substantial moves to "independent brands". For example, the National Development Bank recently claimed that it will provide 4.3 billion yuan in policy loans to GAC Group from 2006 to 2010, focusing on the autonomy of the GAC Group. R & D and related project investment.
In fact, engaging in self-owned brands has become something that every company wants to do or wants to stick to. How to define an independent brand, how to engage in independent brands, there are many arguments. In these arguments, the author noticed that there are two distinct voices.
The first is the voice of Tong Dongcheng. He is talking about the definition of self-owned brands. Tong Dongcheng, vice president of Dongfeng Motor Co., Ltd., and general manager of Dongfeng Commercial Vehicle Co., Ltd., has a point of view: “The brand morality of independent brands must break through a misunderstanding, and should not be imprinted with the imprint of the nation and the brand of politics. The brand is a kind of (market) economic development. (Necessary)." This statement may be somewhat idealistic.
Volkswagen has been producing in China for many years. Consumers have not yet regarded it as a Chinese or Shanghai brand. Even if Changchun or Shanghai never advertise that “the masses are from Germanyâ€, I am afraid it will not change the brand awareness. reality. There may be an exception in the future, that is, Nanjing Automobile's MG. Everyone knows that it was bought by the Chinese. Although it has a hundred years of history in Britain, it must be at least a hybrid since the first day of landing in Nanjing.
The other is the voice of Dong Haiyang. He is talking about the road choice for engaging in independent brands. Dong Hai, deputy general manager of FAW Toyota Motor Sales Co., Ltd. published in the "Automotive Business Review" magazine "Another Autonomous Road for Motor Vehicles" (hereinafter referred to as Dong Wen, see "Automobile Business Review" November 2006 issue) and put forward some suggestions on Take the view of joint ventures taking the road of own brands.
Dong Wen’s main analysis and judgment should be calm and objective. For example, in the Chinese market, foreign brand cars produced by joint ventures are the mainstream. Chery, Geely and other independent brands created by the Chinese themselves are only challengers rather than the situation. The most successful area of ​​the latter is the area where foreign investment has not actively entered. In the future, Chery and Geely will face the situation that the market occupiers in the mid-to-high-end car market have reduced their profit levels and the competitive environment has become worse. Under this situation, it will inevitably drag the latecomers to accumulate funds and experience and thus launch a vigorous challenge. Therefore, it is unrealistic to think that Chery Geely has moved forward and replaced foreign brands quickly.
Dong Wen's overall thinking is roughly as follows: Since the joint venture had failed to use the market for technology, it is now considered another way. The so-called alternative road is referring to the fact that it is worthwhile to seriously confess with the foreigners and the Chinese side has contributed funds. Then the Chinese side not only has the right to distribute dividends from the joint venture, but also has the right to use joint ventures to develop Chinese brands. Therefore, the Chinese side must operate its own brand on the platform of the joint venture, not just the foreign brand. In this way, China has enjoyed the benefits of the platform that the two sides have built over the years. If the foreigners do not agree, the Chinese side can have some ways to cure them until the government gives aid and engages in industrial damage investigations, forcing them to submit their orders. Such thinking is based on a basic judgment: foreigners today are vested interests. They cannot accept the outcome of going home from China. They cannot afford to lose.
From the short excerpts above, it can be seen that the “self-owned brands†that Tong and Dong talked about seem to be difficult to classify as the same concept. To put it back, even if the former is approved, the scope of the two is inconsistent. The author is more practical and wants to talk about the independent brands that Dong Haiming refers to, and has eliminated the eclectic way of intentionally confusing car brands from foreign countries into their own brands. This article wants to explore: Can we engage in independent brands in joint ventures? Can the "other road" go?
Hard and soft conditions: gradually generated
Dong Wen analyzed the joint venture's contribution to the Chinese and foreign parties very informally. The paper divides this contribution into two categories, called hard output and soft output. When a joint venture is established, it will produce products that will generate sales, sales revenue, profits (or return on investment), which can be directly measured in terms of money and belong to the "hard output" of the joint venture company. In addition, in the course of the operation of the joint venture company, it will also generate benefits such as brand equity, channel generation, and talent accumulation that are difficult or even impossible to measure with money. This is the "soft output" of the joint venture company.
Dong Wen believes that the hard output is dividend-paying because of the ratio between the two sides, and the benefits obtained by the two sides are equal to the investment intensity. However, the soft output is dominated by the stronger party, who is stronger and who divides more. The reality is that within the joint venture, the foreign party speaks louder than the Chinese side, and the soft output gives the foreign party a lot of benefits. The Chinese side can't get any benefit.
The author completely agrees with Dong Wen’s point of view. Looking at China's large number of joint-venture auto companies now, this is not the case: China is inferior to foreign countries in the benefits of soft output. It can be said that as we become more and more aware of this issue, we are increasingly suffering. As a result, it naturally encourages the need for independent brands. China has to have its own soft output that can be controlled by itself. This is a good idea. The problem is that since it takes time and effort to develop its own brand, why not use the joint venture platform besides doing it yourself? Maybe it can be used to save time and effort?
What are the basic conditions for a joint venture to develop its own brand? Here we have to explain that the so-called independent brands are competitive, and that they can compete with others in China and even the whole world. They can't just sell local cars and sell a few cars symbolically. The author and imitate Dong Wen's method of discussion also divides the conditions for joint ventures to engage in independent brands into two categories. One is a hard condition: there must be funds, technology, and talent; the other is a soft condition, a market economy way of thinking, and a knowledge of the laws of the market economy. The author believes that both of these conditions were not available before, but now there has been a great change.
Many people believe that the joint venture's market-for-technology path has basically failed, including Mr. Dong's seemingly acceptance of this view. From this point of view, the author does not quite agree and wrote several articles saying that the market has had meritorious deeds for technology, and cannot be characterized as "basically a failure."
Li Anding vividly used the story of “The Tenth Girl†to describe the formation of China’s auto R&D capability. I strongly support it. There are three aspects of financial and technical personnel, and joint ventures have contributed. We cannot think that there should be prejudice because we discovered that things are easier than we thought today. The impression still remembers an example from the earlier Cheng Yuan’s article, which was the earliest Chinese-foreign joint venture automobile factory, Beijing Jeep, who engaged in American cars and specifically asked the steel mills to make steel for door hinges because there were no materials that met the standards of others. , not special refining does not work.
The author also has a large number of similar examples, such as Nanjing Iveco Sophim engine to engage in localization, to do the belt took a lot of time, because at that time there was no auto parts factory to do it. Now it seems that these things are not unusual, not to reduce the noise! However, these things have made China's autos rapidly improve. If we want to say that Chinese people must rely on their own brands for two or three decades, the cost of self-study will not be low.
The other is a soft condition. At least one thing is to have awareness of your own brand, to understand the concept of hard output, soft output, and the benefit ratio between them. When we look at history objectively, we have to admit that when we first started to make cars worth a point and delineate the “big three†and “three small,†few people really understand the value of “brand†and “channelâ€. And try to fight for it. At that time, the car was still purchased or marketed. Who could surpass the historical prophecy and must share the brand equity with foreigners and successfully assign it?
Foreigners have been beaten in this area for decades. Unexpectedly, the Chinese people have had an unforgettable experience of success or failure. Whether the United States Chrysler or the German Volkswagen, when talking about a joint venture with the Chinese people, how could we first give classes to the Chinese people at the time and explain the market economy? How can the Chinese think of asking foreigners to use capitalist marketing theory to brainwash their brains and talk about joint ventures? In the era when the Chinese people generally do not understand the market economy, it is necessary for the government and the automotive industry to consider soft output as deeply as it is today and to cherish it extremely. This of course is divorced from the history of China’s economic development.
There is also a very popular saying that cars do not have the same methods as "two bombs and one star", and autos have no ambitions. I think this is not a good analogy. "Two bombs and one star" are not market-oriented products. They are not mass-produced products purchased by consumers themselves. Cars are not the same, there must be sufficient sales of consumer-approved products to earn enough money to engage in research and development. FAW does red flag cars to complete political tasks, only a small amount of doing fast and doing well, with the "two bombs and one star" people have the same aspiration and ability to have results. But there is no way to rely on it to make money, so it's gone. To make a popular example, "two bombs and one star" are the eggs laid down by the country's chickens, and the cars themselves are chickens and eggs.
The situation is now quite different. Hard conditions and soft conditions are no longer comparable. Now we have to say that the joint venture has not given any good things to China. I do not believe it. This does not meet the reality of the automotive industry. Of course, the foreign side will also have his reservations. He will not sell anything that does not sell. He didn't stay so, to actively support the Chinese car development, and then went to eat his market. All in all, the joint venture has been for so many years, the market has given the foreigner a part of it, it has lost and gained. If we look at the entire Chinese car, not just the car, we will find that it is not easy for a foreigner's commercial vehicle to enter China. why? Many automobile manufacturing and R&D technologies were rapidly applied to commercial vehicles. The foreigners had refused to come in, but now it is hard to come in.
Having said the above, the author's meaning is: Regarding the hard conditions and soft conditions for engaging in independent brands in joint ventures, first of all, they are not born; secondly, in the present situation, they are all gradually available.
"Another Road": The Sword is Reasonable and Difficult Still
Dong Wen proposed that when it comes to the sword, it must send its own voice to the outside world. We must clearly tell the foreign side and reason with them. We are trying to share the soft output. We must use joint ventures to create our own brand. This is truly justified.
The author greatly admires this basic viewpoint put forward by Dong Wen: Do not think that using a joint venture to be your own brand is a humiliation. It is certainly good for China to learn its own brand name, but since China should have shared the soft output of the joint venture, the foreign brands on the runway of the joint venture can take off and independent brands can take off. This is a shortcut!
Yes, the basic conditions for the self-owned brand's hard-softness in the joint venture have gradually become available. The light of the Chinese automobile market has been dazzling. Foreign parties have to be careful with their services and should be able to take a shot at the sword. However, this is a short cut, but it is also a bush. Here are some of my own opinions:
First of all, there are no threatening spoilers in China. There is a shortage of “fish†in the mid- to high-end product camps (applying Cheng Yuanyu). The foreign side has not yet been looking at the Chinese side’s request. The Chinese side must also tolerate loneliness (applying 竺延风è¯) to get the Scriptures in hand; the Chinese must also seriously swallow the ninth “toutou†(applying the Li An idiom), and swallowing it quickly does not matter, but it cannot be eaten only. Eight and a half and throw away half. Only in this way will there be real competitive independent brands that will attack the reversal of foreign parties. The Chinese saloon exports Germany's big list, in the final analysis is the supplemental product in the people's market, is not the product of the left and right situation, five years more than 100,000 vehicles, the average number of only a year? Where is this true "big" single?
Furthermore, the attitude of the foreign partner is different. There was a saying that the automobile world eventually went to “6+3†and it was lively for two or three years. However, nowadays, the world’s biggest names in cars are more worried and less arduous and difficult to live in. The future is not to become “8+5†or “4+10â€. No one knows. There was a slump in Fiat's affiliation with General Motors. Fiat's days were better now and he immediately faced GM. Others such as Dai Ke and Nissan-Renault may not all be harmonious sounds.
Looking back at the recent domestic situation, in the face of China’s call for joint ventures to engage in independent brands, it is clear that the responses of different joint venture partners are not the same. Some foreign parties have made it clear that they will comply with China’s policies and will actively consider partnering with their own brands or joint ventures, but more foreign companies are still waiting to see. Even if it is the same foreign partner or the same type of foreign partner, in the different joint ventures in China, because of the contrast between the Chinese and foreign forces, the foreign attitude will be different. For example, a foreign car company has a joint venture between commercial vehicles and passenger vehicles in China. It is very likely that for Chinese independent brands, foreign parties will not let out the runway of a joint venture of passenger cars, but the runway of a commercial vehicle joint venture. He is happy to share.
What will happen is: In the coming period of time, some foreign parties are likely to have different opinions. On the surface, they are active and vilified. He will say that we are seriously obeying the national policy, and we fully respect our partners. We support China’s own brands, from R&D to production, from manufacturing to sales, and no problem. However, as soon as he encountered specific problems, he sat down to negotiate with you. His attitude was sincere but he did not discuss it. After all, foreign capital also accounts for 30% or 50%. You must consult with him on all aspects. The board of directors has been running endlessly, otherwise it violates the "Company Law."
From the brand name, to the technical price, to equipment verification, to the cost accounting of materials and processing, to 4S shop management, to sales activities, he scrutinized with you, all the way, so that you can not be peace of mind. He does not want to be a last resort, that is, it does not let you do things, it is so internal friction, even worse than state-owned enterprises, the automotive market is changing frequently, the decision-making process of the joint-venture company's own brand and the implementation of its decision-making process is slow and painstaking. A look at whether or not your Chinese nerves can stand, and second, whether independent brand products missed the market opportunity again and again. Anyway, if a foreign son has a healthy son and his foster son does not die, he will be fine.
In the end, it is true that Dong Wen's proposed government implemented a survey on industrial damage and provided assistance to the Chinese side of the joint venture. It is theoretically correct, but the operability is not known. In this respect, the government has no experience, and companies do not know how to seek asylum. What is industry damage? How is the degree of damage determined? How to punish after judgment? A series of things must have a clear statement. There is no rule which is a radius. Only by formulating laws and regulations, training personnel, and preparing for implementation will we have to grind on for many years, and it will not be considered that foreign countries must strive for his rights and behave for three years!
In contrast, the government is currently working hard to cultivate "squid" to be effective. The government should not only support medium- and low-end self-owned brands such as Chery and Geely, but also support mid-to-high-end self-owned brands such as SAIC Roewe and MG Nanji, who are ready to take off at a high starting point in foreign technology and are expected to quickly become competitive. The strong field of foreign brands has stirred up its board. With such a group of squid, does the foreign partner of all Sino-Swiss joint ventures dislike the software? Why does He Fang cannot fully use the joint venture operating platform?
To sum up, to engage in self-owned brands in joint ventures, one must clearly understand the current situation. Now is the time for the sword, but it is difficult to estimate enough. Second, it is necessary for the government to cooperate with the company to allow the independent brands to grow rapidly. The conditions have become more mature. Forcing the joint venture in a market manner also allows China to share soft output. The appropriate policies introduced by the government can influence the direction of the auto market, and the Chinese government has the responsibility to create a growing environment for Chinese auto brands.
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