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Industry on the eve of vehicle and internet integratio

The industry is on the eve of integration with the internet, said James Qin, former CEO of Autohome Inc., a vertical portal with the world’s largest online traffic providing vehicle related services.

“Internet in its essence is a kind of infrastructure. It is the biggest communication network and most powerful computing network mankind has invented by far. Communication and computing, the two are basis for an internet company to energize traditional industries,” said Qin.

According to Qin, most of internet companies hold a same dream that they can benefit or energize other industries through internet and bring themselves a bright future.

Qin explained how an auto e-commerce company or internet energizes other industries. The biggest advantage of internet is its ability on data. It can collect users’ behaviors from apps users installed on their mobile phones and then upload and store data in internet platforms. By a mega computing network and real time storing, computing may be available and every internet contact by a user can be adjusted. Marketing efficiency can then be largely improved.

As for Autohome, it has both open platform and self-run service on e-commerce. Deep understanding on OEMs’ products and prices and services at dealerships helps it to be a bridge and matchmaker for related sides.   

The vehicle industry is bound to be changed, predicted Qin. The booming of shared vehicle market shocks auto e-commerce companies like Autohome and 4S stores alike. Pain points such as obscure prices and unfixed services remain unchanged in the internet era.

Qin hopes that buying a vehicle can be simple, the same as buying a phone in the future. Online ordering, transparent price and stock, quick and safe delivery, one to one aftersales service can be realized.

To survive and develop in the future, every company must elevate its efficiency by innovation and integrate with internet companies to boost the whole industry, suggested Qin.

Vehicles may no longer be simple transport tools, but probably become FMCG (Fast Moving Consumer Goods), according to Ma Jun, chief expert of Chang’an Automobile Co., Ltd.

Ma believes changes on both external and internal environments shock the industry greatly.

For the external factors, they are competition environment, fast advancement on internet technologies and application of new technologies and materials, the uprising labor cost in China and global competition.

The internal factor is related to consumers. Most of them were born in 1980s and 1990s and they have their unique consumption habits.

Chang’an studied these changes. “When the management of Chang’an is setting out its 13th five year plan in August 2013, we discussed whether consumers 10 years later would buy cars or just transport service and got a clear viewpoint that they would buy the latter,” said Ma.

Chang’an would focus on three aspects. The first is its clients, which include consumers, partners and resource providers. The second is on product R&D, to quickly bring new products for consumers. Chang’an has shortened it to 28 months from previous 38 months. The third is quick delivery or OTD (on time delivery).

Vehicle industry and travel in the future must be smart and car sharing would be a new model for travel, according to He Yi, CEO of LeAutolink and president of LeShare.

Vehicle consumption model based on ownership per thousand people is unsustainable globally, car sharing and zero-emissions transport tools with EVs as the mainstream would be the future trend, He believes.

He thinks three forces will drive the change or revolution and create a brand new ecology: change, openness and chemistry. In a future opened ecosystem, innovations would break organizational and industrial boundaries and have chemistry effect on the current ones and create something new, according to He. 

LeEco’s ecosystem features globalization, value reorganization and sharing with the core of zero-emissions electric vehicle.

For LeSEE (LeEco’s super car subsidiary), it has Yidao, a car hailing service provider, and LeShare, an EV rental by the hour platform, as its two wings to push for the forming of its sharing ecosystem. 

“Internet plus vehicle” has become a new normal for the industry, said Marco Hecker, managing partner of Deloitte China Auto Consulting. For anyone who wants to enter into the ecosystem, four messages must be delivered clearly, according to Hecker.

“How can we mobilize 600 million netizens when it comes to buying cars and enjoy services; how can auto OEMs bring down cost, transform in the whole ecosystem; how can dealerships profit in the future, where is the source of profit; how to cooperate with newcomers, with companies who are more flexible and good at using data?”

Hecker suggested some effective practices like track longer time on internet users’ online behaviors to get to know better of users. “You must find your own place in the ecosystem and know your customers from bottom up. If you don’t know, don’t engage in the business, since you can’t provide the right products,” said Hecker.

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