Chinese Auto Industry Competition, Involution and Outlook
TapTechNews June 7th, during the 2024 China Automobile Chongqing Forum today, Li Shufu, chairman of Geely Holding Group, gave a speech. Like many Number Ones of car companies, Li Shufu also talked about topics related to competition.
Li Shufu said that healthy competition can achieve high-quality development. The intensity of involution of the Chinese auto industry is the highest in the world, and the price war is higher than wave after wave, which is also unrivaled. This phenomenon is both a good thing and a bad thing. If the marketization level is high, the law is complete, law enforcement is strict, and competition is transparent and fair, it is a good thing; otherwise, it is a bad thing.
When talking about involution, Li Shufu pointed out that the healthy development of any industry must be manifested in achieving better economic benefits in the input-output ratio. Endless involution and simple and crude price wars will result in cutting corners, counterfeiting and selling fakes, and disorderly competition that does not comply with regulations. For the automotive industry, it is very important to compete healthily according to law so as to achieve sustainable high-quality development and the achievements of electric vehicles already obtained in China can be consolidated.
Li Shufu finally said bluntly that today's China is not short of car-making enterprises, but lacks an ecological environment for automotive parts with innovation power, an automotive safety software and hardware technology company with original capabilities, a competitive industrial software supplier, and an automotive company with original capabilities.
TapTechNews summarizes the views expressed by the executives of various car companies at this forum as follows:
Zhu Huarong, chairman of Changan Automobile: Involution is a process of good money driving out bad money. Involution itself means the pursuit of excellence, which will roll out a new height for Chinese brands and will roll out the maximization of user interests and truly create value for users.
Zeng Qinghong, chairman of GAC Group: In 2030, the automotive market will be a 433 structure, 40% will be hybrids, 30% will be pure electric, and 30% will be fuel vehicles. It is recommended that when the share of new energy vehicles and pure electric reaches 50%, the government departments should study equal rights for fuel and electricity.
Wang Chuanfu, chairman and president of BYD: There is involution only when there is competition, and only when there is involution can there be technological breakthroughs, industrial upgrades, and excellent products can be born. Involution is a natural law. Don't be anxious, and only by actively embracing can one come out of the competition.