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CEIBS Holds 10th Annual China Automotive Industry Forum 2012

SHANGHAI, Oct. 28, 2012 /PRNewswire/ -- The challenges facing the global automotive industry, including overcapacity, increasing R&D costs, and pressure to achieve technological advances in safety, energy consumption and emissions, were analysed today during the 10th Annual China Automotive Industry Forum 2012, held at the Shanghai campus of the China Europe International Business School (CEIBS). Leaders from the political, academic and business communities shared their expertise at the event, hosted by CEIBS and the European Automobile Manufacturers Association (ACEA).

As he moderated during the welcome addresses CEIBS Vice President & Co-Dean Zhang Weijiong thanked the sponsors and other industry players for their effort in making the day's forum a success. He also pointed out that CEIBS has hosted the auto forum for the past decade, a point reinforced with a video that presented highlights from the event over the years.

In his opening speech, CEIBS Executive President Zhu Xiaoming spoke of the technological advances being made in the industry, sharing a video that focused on efforts being made to recharge electric cars as they are being driven along the highway.

The second opening address was delivered by Vice Secretary of the Party Committee and Governor of Jiading District in Shanghai Mr. Ma Chunlei. He spoke of how significantly Jiading has benefited from the auto industry over the years (total assets of 280B RMB) and steps being taken to ensure the sector's sustainable development. Efforts are being made, he explained, to build a complete supply industry chain with a focus on manufacturing, especially OEM. Research and development, he added, will also be an area of emphasis with another 200 R&D centres soon to be added to the existing 55 set up by various companies. Jiading has also found other ways in which to incorporate the auto industry into locals' lives: it has made a name for itself as the annual venue for the popular F1 race and has now added a music festival (hosted yesterday) to its list of activities. In terms of the human resources and technological advances needed to ensure that the industry continues to thrive, Ma spoke of the need to nurture the talent needed (the government will invest 300M RMB in this) and cited new energy as the future of Jiading's auto sector. He closed by saying he looked forward to hearing the insight of speakers during today's event.

China and the Reshaping of the Global Automotive Industry

In the opening session, which focused on China and the Reshaping of the Global Automotive Industry, leading auto executives assessed and discussed the mega trends that affect their companies and the role of China in the industry's global restructuring process. They explored, in particular, the consolidation trends, the impact of new technologies and the role of government. Following keynote speeches by CEO of FIAT S.p.A. Sergio Marchionne, Research Fellow in China's Sate Council's Development Research Centre Prof. Chen Qingtai and President of DAF Trucks N.V. Harrie Schippers, CEIBS Professor of Operations Management Prof. Nikos Tsikriktsis then moderated a panel discussion with all three.

In a no-holds barred address, Fiat's Marchionne spoke of the urgent need for Europe to develop and implement a coordinated approach for the continent's auto industry in order to safeguard the 11.6M jobs it provides. Auto companies, he said, had "all suffered our own version of hell" during the 2008 global economic crisis. He made it clear that he did not share the view that the crisis had caused the fallout in the auto sector, stressing instead that the economic upheaval had simply exposed the global industry's operational inefficiencies – a major part of which was overcapacity.

While the US government had used the crisis as an opportunity to work with the American auto industry to make the sector stronger, their Europeans had squandered this opportunity, Marchionne said. "Today, the US auto industry has the flexibility to adapt and it is equally capable of surviving a downturn. This is not true of Europe," he pointed out. Europe's political leaders, he said, need to find the courage to take the action needed to formulate a coordinated approach for their auto industry – as they did for the steel industry in the 1990s.

Turning his attention to the issue of how technological innovation can help the sector, the Fiat CEO spoke of the need to reduce dependence on fuel, adding that the solution will require the input of true visionaries. He all but dismissed electricity as a viable alternative, saying electric cars are "loss makers" and manufacturing them on a large scale would be "masochism in the extreme". "For the time being, there is no market (for electric cars) and even 10 years from now they will only be 5% of the total car market," Marchionne said. He also referenced a study that showed electric cars may do more harm than good. There is a need, he said, for more research. "We should explore the issue, but we should not be strong-armed by regulators. We should focus on improving existing technology, especially natural gas," he urged the room full of auto industry players.

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