The Phenomenon of 'Involution' in China's Auto Industry and Its Impact
TapTechNews July 13th news, during the 2024 China Automobile Forum held in Shanghai from July 11th to 13th, Wang Lang, the deputy general manager of Chery Automobile Co., Ltd., gave a speech.
Wang Lang talked about the current phenomenon of 'involution' among auto enterprises, believing that normal market competition is the necessary path for the development of market economy and enterprises' pursuit of leadership, but 'excessive involution' is not only not conducive to the healthy development of the enterprise itself, but also not conducive to the long-term sustainable development of the entire industrial ecosystem.
Wang Lang believes that the rapid growth of China's new energy vehicles has brought vitality and innovation to the global automotive industry. But at the same time, the spread of 'involution' overseas on the one hand intensifies the rise of trade protectionism, and on the other hand, the behavior of 'only competing on price but not on service' has caused adverse effects on the overseas image of Chinese brands.
He said that 'rolling downwards' has no way out, and it is necessary to go upwards (enhance brand value), go left or right (broaden the industrial circle and expand the circle of friends), and win-win cooperation is the way out. 'First, insist on being a partner in technological innovation; second, insist on being a pioneer in brand uplift; third, insist on being an ally in the industrial ecosystem; fourth, we must insist on being a fertiliser for open innovation.'
According to TapTechNews' report yesterday, Xin Guobin, the vice minister of the Ministry of Industry and Information Technology, said in the same activity that the current development of China's automotive industry still faces some problems and challenges. 'The domestic consumer demand is not strong enough, and the market competition is extremely fierce, and there are some disorderly competition phenomena.' 'The key for multinational auto companies to weather the storm and remain new after a long time lies in always adhering to quality first and service first. (Chinese auto companies) should aspire to be century-old stores, have a heart of reverence, adhere to integrity and innovation, move steadily and far, and resolutely resist improper competitive behaviors.'