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CEIBS Holds 10th Annual China Automotive Industry Forum 2012

The session's next speaker, Prof. Chen Qingtai, shared his thoughts on how to nurture China's auto market and ensure its sustainable development. His points included the positive and negative effects the auto industry has had on the Chinese society, and the need for the government's role to evolve as the industry changes.  

The session closed with a panel discussion after an address from DAF Trucks N.V. Harrie Schippers. He spoke about the gains being made in terms of global consolidation, from the perspective of commercial vehicles. He emphasised the need for global industry standards, making the point that there are shared global concerns and customers have similar needs across the world. He stressed, however, that he was not calling for a one-size-fits-all approach as he was fully aware that – within the globally accepted standards – there has to be allowance made for variations within the industry's commercial niche.

The Role of Government in Reshaping the Industry 

In session two, The Role of Government in Reshaping the Industry, the speakers were Dong Yang, Executive Vice Chairman and Secretary General of CAAM; Ivo Belet, Member of the European Parliament; Vice President of Chang'an Automobile Co Ltd Mr. Ma Jun, as well as Group Vice President and President of Ford Asia Pacific and Africa Joe Hinrichs. They were also all participants during a panel discussion hosted by Ivan Hodac, Secretary General of ACEA. 

In his presentation, Dong Yang spoke of the need for a national development strategy for China's auto industry. Now that the industry is the largest in terms of output and sales, he said, it was time for it to become the strongest. In his wide-ranging speech, the central theme was the importance of the auto industry (it generates billions in taxes and employs millions and thus has a major impact on China's GDP) and the importance of having a clear roadmap. He does not anticipate that rising fuel prices will curb auto sales in China, adding that car owners will simply drive less. At the same time, domestic auto makers should also look to the overseas markets as potential buyers, he added, stressing that opening up the local industry and globalisation of successful home-grown brands are vital for the sector's survival. So too, he added, is the government's role in safeguarding the industry's role as a significant plank in overall national development. 

The session's next presenter was European Parliamentarian Ivo Belet who spoke of the significant role that the auto industry plays in the EU, providing 2.3 million direct jobs and another 10 million ones indirectly plus accounting for 21% of global car sales. The EU had reacted to the 2008 crisis with an economic recovery plan that included incentives for energy efficient cars, to replace older versions, he said. He agreed, however, with Fiat's CEO, that excess supply was a problem. "Overcapacity and lower demand forced manufacturers to re-evaluate production all over Europe," he said. The focus in Europe now, he added, is on clean cars, sustainable transport, and sustainability of the industry as a whole. Other important topics: safety standards for carbon dioxide emissions, tyres and bio fuels. Under the Cars 21 project (a collaboration among high-level industry players, employees and EU commissioners) efforts are being made to establish a framework for the industry. In fact on November 8, he added, the EU Commission will unveil its Cars 2020 Action Plan for Europe's auto industry. This, he said, would play an integral role in providing a roadmap and the coordinated approach which the Fiat CEO maintained was now desperately lacking.

Chang'an Vice President Ma Jun, the session's penultimate speaker, shared his views on opportunities and challenges for China in the global consolidation process. Of the 150 new models launched in China last year, half were launched by domestic brands he said as he spoke of China's ability to effectively compete with international players who are already operating in the country. "China will become the new force in the global auto market," he said, adding that going global is essential. "The power of the market will determine our future and our actions will also decide the final result of the competition. As long as we rely on technological innovation and take advantage of the opportunities available we will be able to grow China's auto sector," he said.

Ford's Group VP Joe Hinrichs next shared his views on how the US government has collaborated with the country's auto sector, especially during and after the 2008 crisis. Valuable insight had been learned from the economic debacle, he said, and China could benefit by paying attention to these lessons. He outlined the recipe that had transformed Ford, GM and Chrysler into once-again profitable companies after the dark period during the crisis. The US government

  • developed stable, transparent and predictable policies for the sector;
  • restructured the industry to address the issue of overcapacity (a problem now seen in Europe), which involved rationalization of brands (in contrast there is a proliferation of brands in China now)
  • gave consumers an opportunity to provide their input.

"These were all part of the solution," he said.

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