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Saturday, October 21, 2017

Challenges and Opportunities in a Changing World

CEIBS 15th China Automotive Industry Forum 2017

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October 21, 2017. Shanghai – Nearly all keynote speeches and discussions during CEIBS 15th China Automotive Industry Forum 2017, held today at the school’s Shanghai Campus, highlighted and repeated the industry consensus that the entire automotive industry is now arriving at a critical point, where everything is undergoing a massive process of reshaping in an environment characterised by the coexistence of multiple challenges and opportunities.

“We see a rosy picture for development in China’s automotive industry today, thanks to the country’s favourable policies encouraging its development; technological progress accelerating its digitisation and making the sector more ‘smart’; and the entrepreneurial spirit we see within a lot of our industrial leaders,” remarked CEIBS Vice President and Co-Dean, Professor Zhang Weijiong in his welcome address. “Yet we mustn’t ignore the challenges ahead – how to keep the industry moving forward despite the current anti-globalisation trend in some countries, how to balance growth and sustainability, how this traditional industry can create more value in the future through technological and business model innovation…”

CEIBS Adjunct Professor of Management Jeffrey Sampler got the audience’s attention with a trivia question – why is the standard track gauge in the US 4 feet 8.5 inches? The measurement, he explained, could be traced from the American Civil War all the way back to when England was conquered by the Romans. Prof. Sampler told the audience that companies come and go, but the world will only remember those that (re)define industrial standards. He noted that “those who are able to mobilise and integrate the best people, ideas and capital together will define the standards of the industry”, and will “definitely win” ahead of others.

“Disruptive innovation” was the focus of the keynote speech given by EVP of Group Strategy and Sales & Marketing of Volkswagen Group China, Mr. Soh Weiming. He shared his view of what the automotive industry will look like in the future, as a result of today’s innovations. “We will see the emergence of ‘Smart Cities’ in some of the world’s most developed innovation hubs. And a powerful infrastructure that facilitates the connectivity between every component of the ecosystem lies at the core of such projects,” he predicted. But this kind of disruptive innovation needs time and resources, and it will take time for reality to catch up to the scenes in Hollywood films. “Usually technologies come earlier but it may take a while for them to be well commercialised and accepted by the mass market,” added Mr. So. He remains optimistic about the future of the industry, even though it was pointed out that electric cars only share about 1% of the market today, well below projections made – in 2009 – that all vehicles would have been fuel-free by 2012.

Also during today’s event, Mr. Yuan Mingxue, Vice President of Chang’an Automobile, shared his insights on Chinese manufacturers’ going-out strategy within the context of the current anti-globalisation climate. Mr. Yuan believes a Chinese player’s ideal path to globalisation entails first winning domestically, then going out to integrate international resources such as established brands and technological know-how, in order to realise a win-win with its partners, internationally. Director of AlixPartners, Mr. Xu Qian agrees. “Protectionism and other turnarounds in globalisation we’ve witnessed in the past few years will eventually harm not only the interests of car manufacturers, but also consumers’ benefits,” he said. “In the long run, globalisation is the only and sole way for the automotive industry to integrate advantages of different players for a better future.”

Attendees also heard insights from industry leaders, government officials and eminent scholars on development trends of digitalisation, clean mobility, connectivity and smart cities.

CEIBS President and Chengwei Capital Chair Professor of Entrepreneurship Pedro Nueno closed the forum. Throughout the day, business leaders from major industry players such as Volvo, Renault, Continental, incadea, SAIC Motor, Jiangling Motors, and Hyundai shared their thoughts with more than 300 professionals from the automotive industry.

Today’s Forum was co-organised by CEIBS, Association des Constructeurs Européens Automobiles (ACEA), and the China Association of Automobile Manufacturers (CAAM).