Cheng Yuan: China's automobile joint venture is worrying

A young talent in the media community recently returned from a study tour abroad. He is deeply anxious about the status quo in China’s auto industry and lamented: “The Chinese auto industry has been involved in joint ventures for decades and seems to have done one thing – selling cars for foreign companies. "At first glance, it seems that there is a bias, but looking at the functions of joint venture car companies, one cannot but admire what he said.

In the 29 years since Beijing Jeep, the first auto vehicle joint venture company, signed a contract, China’s auto industry has been “bashing” on joint ventures. The annual sales volume has increased from less than 200,000 units to nearly 20 million units, an increase of 100 times.

In terms of market size, this is indeed a brilliant achievement, and China has thus boasted itself as a “car big country”, but in fact it is becoming the “world's largest market” for more and more foreign auto brands, while the independent brands are in the local market. However, the situation is difficult and the living space is being squeezed smaller and smaller.

Following the market share decline of 3.37 percentage points last year, sales of self-owned brand passenger cars fell another 5.2% year-on-year in the first four months of this year, and market share dropped by 3.2% again.

Is this the "other side" of our joint venture strategy?

Local car "lose at the starting line"

"The joint venture can not obtain core technology" is the world's best known "secret." Therefore, when Japan’s Nissan and South Korea’s Hyundai and Daewoo had only been joint ventures for only a few short years, they announced their separation and independent development, and the Japanese and South Korean automobile industry had today’s situation.

There are so many automobile joint ventures in China alone in the world, and the joint venture agreement is signed for 30 years. Even worse, the joint venture "the first phase of the contract has not yet expired and signed another 30 years" is also considered to be a brilliant performance of the relevant political figures.

A few years ago, some people questioned the "technology for the market," and this led to a very modest debate in the industry. Although it was ultimately inconclusive, it made the automobile joint venture under the "reform and opening up" aura. A little flaw.

Why does China Auto have such a "deep relationship" with joint ventures? Why should Chinese cars take the joint venture road forever?

Just look at the joint venture's salary of 27 months a year, and the generous investment in new car-listed joint ventures can tell how much the benefits of the joint venture are.

Some people say that China’s resistance to deepening reforms comes from vested interest groups, so where does the resistance to the development of auto brands and the building of a truly automotive power come from?

In fact, since the Chinese automobile industry has proposed a development policy of “high starting point, large quantities, and specialization”, it has destined for the fate of its joint venture, because only multinational car companies can do these things.

In order to ensure the "high starting point, large quantities, and specialization" of purity, the most insistent task of government departments for decades is to oppose "dispersal, chaos, and difference", that is, local enterprises are not allowed to produce cars.

Before China's accession to the WTO, an independent brand project had not been approved. The sunshine and rain of all car “protection policies” were all spilled over the joint ventures. The biggest beneficiaries were multinational companies.

When the local company of En-Zhou enters the field of cars, the joint venture has not only formed an “economy scale”, but also has earned a reputation for the brand, which has resulted in the fact that sub-brands are no longer selling high-quality products or joint venture products.

It was this policy intervention that caused Chinese local auto companies to “lose their starting line” and lost the best opportunity for development.

Local "business models" are "clouds"

Recently, the industry often loves to say a noun called "business model." When it comes to independent brands, some people will use the "business model" to fight against, and the "individual brand" into a political concept, it seems that the emphasis on independent brands, is "to engage in "Politics" means "narrow nationalism," while "business model" means operating according to economic laws and market rules.

The so-called "business model" is the pursuit of the highest interests of corporate interests. In the initial period of reform and opening up, the emancipation of the mindset, like "time is money" and "development is the hard truth," emphasizes the "business model" and represents a new kind of knowledge and wisdom.

Today, in the face of the current status of the Chinese auto industry and the emphasis on the “business model”, people feel that they have the same taste as “would rather sit in a BMW and cry in the back seat of a bicycle”.

I think that if you really only recognize the "business model," and how to make money, there is no reason to engage in independent brands. Clear things, engage in independent brands, brand reputation is not high, the car is not easy to sell. Take a look at SAIC Motor Corporation, which invested more than 40 billion yuan. How much money has it earned? Isn't it a "lossy gain" deal?

If you only engage in the "business model," it would be best to produce mature models of multinational corporations, select the best sales talents and sell vehicles to the joint venture companies, and the Chinese would not engage in research and development, risk-taking, and only make money and divide accounts. Or simply, like Brazil, Mexico, and Thailand, the joint-subsidiary company does not do it. All of it allows foreign companies to invest solely, and the government only manages the collection of taxes.

As a result, "China Auto" will be incorporated into the "global system" of multinational companies such as Volkswagen, Toyota, General Motors, Mercedes-Benz, BMW, Hyundai-Kia, etc., and "Chinese Auto" will be powered by Volkswagen China, General Motors China, Toyota China, and Honda China. , Nissan China, Hyundai Kia China, etc. formed an "international team," and the Chinese car was completely integrated into the world, achieving a full "globalization."

Mr. Long Yongtu recently made a high comment: “Companies registered in China are Chinese companies.” Well, companies that manufacture Mercedes-Benz, BMW, and Audi in China are, of course, Chinese companies that can create “the same level as the international Mercedes-Benz and BMW. "In China, who would dare to say that China is not a "car power country"?

In the future, the state leaders will not need to bring Xu Jianyi, Hu Maoyuan and Xu Yiping as the senior executives of Chinese auto companies. They will directly bring Wendeng of the Volkswagen, Toyota’s Toyoda Zhang, Mercedes’s Cai Che’s, and General’s Daniel Ekson’s. , Korea's Hyundai Kia's Zheng Mengjiu and others are even more majestic. Like "The Founding of a State," a group of "foreign stars" played an important role. Didn't everyone also feel good about watching it?

Just such a car industry, I do not know future generations of people is to compliment us "brave innovation", or will call us "spoiled family", "foreign comprador!"