The Third AutoLab Auto Industry Annual Forum organized by AutoLab, a communications and service platform focused on new energy vehicles, telematics, aftermarket, e-commerce and entrepreneurship and investment, was held on December 2 in Shanghai.
With a theme of “Uniting Forces and Confronting Transformation,” the forum discussed new manufacturing movement, smart telematics, shared mobility and the aftermarket. Following are highlights from speakers. – Editor
Shen Jinjun: Market forces, not policy “medication,” should drive growth
China’s auto market should be driven by internal market forces that are sustainable, rather than by policies and regulations that are like medication, according to Shen Jinjun, president of China Automobile Dealers Association (CADA).
“It is such a grief that China’s auto market would see zero or negative growth in 2017 if stimulus policies are phased out,” said Shen. “It is already the world’s largest auto market but one that that depends on policies, which are like medication, without which the industry would lose steam. It’s just a pity.”
Shen believes that although stimulus policies have played a role toward market rebound in 2016, there are also market forces at play for a year that he describes as “recovery growth.”
One of the things that CADA is trying to do to cultivate internal growth is helping both new car and used car dealers to increase efficiency, lower cost and standardize the market.
“China had 190 million vehicles on the roads by the end of September. Stimulating used car distribution is an important way to drive new car sales,” said Shen.
Tiger Shen: Auto industry has reached singularity point, Singulato to develop “independent driving”
The auto industry has reached a singularity point because of three reasons: mechanical craftsmanship is being integrated with smart technologies, everything is becoming connected and online and the car is becoming smarter, according to Tiger Shen, CEO of Singulato (formerly known as Zhiche Auto), one of the new Chinese EV startups.
“Each person on average will be connected to 60-70 devices in 5-10 years and the automobile will be a key device,” predicted Shen.
Singulato, which recently announced plans to build a new energy industrial park in Tongling, Anhui Province, will develop autonomous driving technologies via a third path – what Shen calls “independent driving.”
“We like to see that the hardware and software on the vehicle are separate, just like they are on a smart phone,” said Shen. “So our position is that we first form a sound hardware foundation and then make features and functions that the users actually want available through software download.”
Wei Jun: The vehicle of the future will offer multi functions but simple user experience
The vehicle of the future will offer more and more functions but simple user experiences and interactions, according to Wei Jun, chairman of EV startup Youxia Motors.
“The vehicle of the future must be able to provide individual customizations for users of different age groups and respect their different driving habits,” said Wei.
One of the major goals that Youxia Motors is trying to accomplish is the ability to communicate directly with users so that both can grasp and control real time status of the vehicle, such as battery status and what parts need to be serviced and when.
Wang Chao: Simply meeting demand does not require a “business model”
“If you are simply trying to satisfy a certain demand, then you really do not need any ‘business model,’” said Wang Chao, founder and chairman of Kaiyun Motors, an EV pickup startup named after Wang’s father.
Kaiyun Motors has already been selling the Pickman – micro electric pickup trucks that especially cater to the needs of off-road driving and delivery needs in rural areas, offering an alternative to micro vans or traditional farm vehicles.
Unlike totem brands such as Zippo or Jeep, attribute brands such as Apple and Tesla, or phenomenal brands such as Facebook and Wechat, Kaiyun Motors is trying to become something entirely different, according to Wang.
“Any product must be dependable, safe, affordable, look nice and have good service, then you can start to talk about branding,” said Wang. “Business models are always there. They are not made, and no one can ‘create’ a demand.”
Lu Bin: WM Motor is NOT an internet carmaker
WM Motor is not an internet carmaker, emphasized Lu Bin, senior vice president of strategy planning.
The EV startup is founded by Freeman Shen, an “inside defector” from the traditional auto industry and a well-known industry executive who previously worked at Geely and Volvo Cars.
Lu said that WM Motor’s first car will be a pure electric, smart and high quality SUV with high standards geared for the masses, which will be made inside an industrial park that recently broke ground in Wenzhou, Zhejiang Province.
“There are only three plants that can really build high quality cars in China – BMW Brilliance Tiexi Plant in Shenyang, Volvo Cars Chengdu Plant and SAIC-GM’s Cadillac Plant in Shanghai,” said Lu. “There might be extra capacity at other facilities but their technical capabilities cannot satisfy our requirements on build quality.”
WM Motor plans to launch its own mobility service platform in 2017 as it prepares to begin production of its first car, according to Lu.
Gu Min: Chexiang to launch custom order brand
Chexiang.com will launch its custom order brand on December 15, according to Gu Min, general manager of the Vehicle Business Division at the O2O e-commerce platform established by SAIC Motor two years ago.
“Custom order of products, services and financing have been the focus of our development over the past half year,” said Gu. “We will have six custom order car models for sale on our platform next year.”
Chexiang.com already sells a custom order version of the Škoda Fabia with monthly sales of more than 1,000 units, and currently has models that are sold exclusively through its platform, which is expected to sell 120,000 vehicles valued at more than ¥3 billion ($441 million) in 2016.
Chexiang.com has established about 700 service locations to be doubled to 1,500 across the country by 2017, but plans to gradually add what it calls “3S” stores focused on whole vehicles, maintenance and repair and used car businesses, according to Gu.
“We plan to increase the number of our offline stores to 10,000 over the next five years and set up 50 3S stores in 2017,” said Gu.
Jiang Dong: Fin-tech is data, artificial intelligence and experience
The core of fin-tech, or financial technology, is about data, artificial intelligence and experience, according to Jiang Dong, COO of Yixin Financing or daikuan.com, an internet auto financing platform formed at the end of 2014 by Bitauto.com, Tencent, JD.com and Baidu.
“In order to meet more financing demand, you have to use technology to push the development of financing,” said Jiang, who believes that with fin-tech, the future of providing credit lines to potential customers will be much simpler and faster. “It provides an image of a customer in multiple dimensions through big data and artificial intelligence so that an application for financing can be approved in seconds without the need for numerous paperwork, and it is safe.”
By August 1, 2016, daikuan.com had already served more than 10 million customers and issued ¥15 billion in loans.
Su Yihui: EV time share rental platform Global Car Sharing now at breakeven
Global Car Sharing, China’s largest time share car rental platform, has now reached close to breakeven status on a daily basis in urban areas, according to Su Yihui, vice president of the Shanghai-based company, which was formed in June after combining SAIC Motor’s own EV time share platform and EVCARD from Shanghai International Automobile City into one entity.
“We have currently deployed 5,379 EVs in the city including the Roewe E50, Chery eQ and Zinoro 1E that can be rented at different rates and we will be putting the BMW i3 and Venucia e30 into operation by the end of the year,” said Su. “We are going to have a multi-brand, multi-model and multi-rate operation depending on timing of the day and location to maximize revenues.”
Data provided by Su shows that maximum per vehicle rental time per day and revenues every achieved was 9.47 hours and ¥163.77, while average single vehicle rental time and revenues in the city has reached 2.36 hours and ¥51.41.
The platform currently has 1,700 rental stations throughout the city and more than 7,000 EVs across China, as well as 10,000 charging poles in Shanghai. It plans to increase rental stations in Shanghai to 6,000 and increase total EVs in operations to 20,000 units by 2020. More than 70 percent of the users of the platform, according to Su, are between the ages of 21 to 35, and registered users are increasing at a rate of 30,000 people a month.
Wu Muyong: 2017 will be the year of used car business expansion at 4S dealers
The year 2017 will be the beginning of widespread introduction of used car business for 4S dealerships, predicted Wu Muyong, founder and CEO of Carwins, a company providing used car solutions for dealers.
Wu made the comments at the panel discussion on business opportunities surrounding the use of a vehicle.
“China’s used vehicle transaction volume is expected to reach 20 million vehicles in 2020 valued at over ¥1 trillion,” predicted Wu. “That’s where the opportunity is for 4S dealerships.”
Wu said his company specifically targets 4S dealerships and currently works with more than 3,000 dealers and believes huge opportunities await them on used vehicles.
“The used vehicle business accounts for 50-60 percent of revenues of major 4S dealership groups in the U.S. and developed country, but it is only less than 10 percent in China. The difference is huge,” said Wu. “If we can increase that percentage to 30 percent by 2020, it would mean huge room for development.”