To achieve sustainable development, Chinese auto companies must find the right balance between product recognition by users and corporate recognition by the government in market competition. The "three major" of China's auto industry is a large-scale state-owned enterprise that the government supports for a long time.
But now there is a dramatic scene in the Chinese car market. Local state-owned enterprises represented by Chery Automobile and private enterprises represented by Geely Automobile have been fortunate to catch up with the “blowout†market that began in 2003 and successfully occupied quickly with low-price product strategies. The low-end market that the mainstream joint ventures have not taken into consideration for the time being, establishes the image of self-reliance and self-reliance of local companies and the product's cost-effectiveness.
The government authorities of the non-automotive industries like the Ministry of Science and Technology have also taken a keen interest in these newly emerging local auto companies because China’s science and technology development policies are undergoing subtle changes and are gradually tilted toward using the company as the main force for independent technological innovation. Go up.
In particular, starting in 2005, the “Eleventh Five-Year Plan†proposal adopted at the Fifth Plenary Session of the 16th CPC Central Committee made it clear that independent innovation and self-owned brands should be regarded as the main goals of China’s economic and social development. The central government also proposed “constructionâ€. The core of the "innovative country" policy is to use the ability to enhance independent innovation as a national strategy in the development of the industry. Obviously, in the past, the shortcomings of the two systems and mechanisms of science and technology were not well-stitched, and the relevant departments urgently needed to discover new export performance.
Local companies such as Chery and Geely and their own brands are just in time to catch up with this political warmth. They actively take the initiative to demonstrate their corporate image to the government and the public, and quickly obtained greater support for bank loans and credit lines for export, government special incentives and support funds.
The "big three" that has always been the government's "darling" has begun to feel the increasing public opinion and social pressure. In the past, the government adopted the “progressive†emergency policy to allow the “Big Three†to generate huge profits and taxes through joint ventures with the world's major auto groups, avoiding these large state-owned enterprises having no controllable technical resources or competitive The failure of the product was replaced by imported cars.
The government has not put forward the rigid target responsibility requirements and supporting implementation system for building the independent brands of the “Three Big Companiesâ€. Considering the maximization of corporate profits, the operating priorities of the “Big Three†and other state-owned enterprises are to win the joint venture project and inevitably leave behind some kind of flawed flaws.
Social and public opinion tend to believe that “fringe†companies such as Chery and Geely are still able to start their own brands from scratch, and why the government’s support, technical strength, and talented people’s reserves have become even more powerful. product? When the political environment and public opinion tended to encourage Chinese companies to strive to create their own brands and technological innovations, the competition between the “Big Three†for their own image began to accelerate.
FAW Cars took the lead in grafting Toyota’s high-end Majesta to its own brand of “Red Flag†with only 40 years of history; the upcoming Hongqi sedan, codenamed HQ3, will be positioned in China’s luxury premium self-owned sedan with an annual output of 5,000 cars. In addition, FAW Car will re-graft the Mazda 6 technology platform to the "Red Flag" model. The "Pentium" sedan, code-named C301, will be positioned in mid- to high-end cars with an annual output of 20,000 vehicles.
SAIC Group just announced in April that its newly established subsidiary, SAIC MOTOR, for its own brand operations will be launched in the next four years after the acquisition of South Korea's Ssangyong Motors and the purchase of two UK-based ROVER models. The platform models, with more than 30 models, will achieve an annual output of 300,000 vehicles and 400,000 engines by 2010. Only the Dongfeng Motor Group's own-brand sedan is still in turmoil.
This former Chinese second car company in the comprehensive joint venture agreement with Nissan has clearly stated that the joint venture Dongfeng limited production of passenger cars will use all the Japanese product brands; the future will be the independent brand cars from the Dongfeng Motor Group Ho shell There is considerable speculation that it is not necessary to fill out an existing external self-owned brand in an urgent situation.
The strategies adopted by the “Big Three†self-owned brands have common features. First, they have adopted the introduction of mature models of foreign brands and have switched to their own brand cars. They have obtained product quickening time and reduced the technology and quality that cosmetic products may face when they enter the market. Reputation risk. Secondly, the high starting point of the model grades opens up the price gap with the low-end model market controlled by other independent brands; the reason is that the “big three†state-owned enterprises with traditional organizational structure are hard to do in the low-end car market and Chery, Geely, etc. Positive cost fight. Thirdly, the market and products of low-end vehicles are already overcrowded and profits are becoming thinner and thinner, which may easily lead to financial risks for companies. Fourth, the "big three" are unwilling to set up the starting line of their own brands in low-grade stacks, to avoid prematurely undermining the future market value of their own brands, and to prevent the rise of the brand from being blocked in the future.
Although the “big three†independent brands will have considerable advantages in the technical “hybrid†and scale of production, these independent brands will face direct competition with multinational companies’ joint venture brands, and the “big three†will unavoidably enter into a joint venture. Balance beam between enterprises and independent brands. The answer to the success or failure of the "big three" self-owned brands will ultimately be determined by consumers and the market.
The core view of the article:
The government has not put forward the rigid target responsibility requirements and supporting implementation system for building the independent brands of the “Three Big Companiesâ€. Considering the maximization of corporate profits, the operating priorities of the “Big Three†and other state-owned enterprises are to win the joint venture project and inevitably leave behind some kind of flawed flaws.
View related topics: independent brands, where to go?
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