Chinese cars in the second half

The heat of the "price war" has subsided, and domestic brands have accelerated their "internal competition". After experiencing a round of "reshuffle", the drought stricken car market has ushered in a "spring rain".

Under the wave of electrification and intelligence, how will new forces in car manufacturing compete on the "golden track"? What kind of Chinese cars will appear in front of us in the future?

The Power Competition of New Energy Vehicles

In Huzhou, Zhejiang, the Changxing production base of Geely Automobile is bustling with production workshops. Every minute, a car is taken off the production line here, with a daily output of over a thousand units. In the just past year 2022, Geely's annual sales of new energy products exceeded 320000 units, with a penetration rate of about 23%, which has tripled compared to 2021. In April of this year, Geely performed even better, with sales of Geometry, Link, and Extreme Krypton increasing by 153%, 36%, and 279% year-on-year, respectively. Despite its impressive performance, the tight strings of the enterprise have not relaxed.

In the era of new energy, with the trend of defining cars through software, computing power is known as the "first productive force in the era of intelligent cars".

The Geely Star Smart Computing Center, which was just launched at the end of January this year, is the world's first "cloud, digital, and intelligent" integrated super cloud computing platform for automotive companies. With a total investment of 1 billion yuan, it has over a thousand servers and connects over two million real customer users. The total cloud computing power reaches 8.1 billion times per second, which can improve overall research and development efficiency by 20%.

Nowadays, many top car companies have also realized this, and NIO, Tesla, Xiaopeng, and others have already laid out self-developed terminal computing platforms. However, the construction of data centers alone is not enough for car companies to win the "second half" and come up with a "future car" that can participate in fierce competition. The intelligent cockpit with fast technological iteration and multiple business models is rapidly becoming a user ecosystem entry point for the intelligent implementation of automotive enterprises.

Can we win the "second half" by huddling together for warmth?

In the production workshop of Zero Run Automobile in Jinhua, Zhejiang, workers are busy assembling seats. Unlike other completely self-developed and self-made components, these seats are a "hybrid" among them.

Tan Xuegang, Deputy Director of the Manufacturing Department of Zero Run Automobile, told reporters that these seats were jointly developed by them and Faurecia, which is equivalent to a strong alliance and complementary advantages. Joint research and development refers to the provision of product creativity and technology by vehicle manufacturers, and the design and production by supply chain enterprises according to their needs, thereby achieving complementary talent, technology, and resources between both parties. Compared to the previous customer relationship of "Party A and Party B", the cost is lower and the profit is greater.

In the post 'price war' era, car companies compete for technology, innovation, and even financial reserves and system capabilities.

Top companies are eager to have independent research capabilities to cope with various changes in the market, but for small and medium-sized car companies, their own shortcomings in funding and talent make it difficult to have sufficient investment in research and development. "Group warming" is becoming another option.

Jiang Wei, the head of the research team for intelligent connected vehicles at the Industry Research Institute of Shanghai Jiao Tong University, believes that traditional OEMs lack some internet genes, so it is necessary for OEMs to have a more reasonable and scientific way to engage in strategic cooperation with our upstream and suppliers, to help these enterprises lower the threshold and achieve mass production as soon as possible.

Industry transformation, car companies racing with thousands of sails. As a pillar industry in many major cities in China, the automotive industry is also in urgent need of planning and breaking through.

The Battle of the Car Cities' Breakout

In Huzhou South the Taihu Lake New Area, in this modest building, a technology company named Jianwenlu "hides" in it. In the dust-free workshop, technicians wearing anti-static and dust-free clothing are taking out the produced MEMS RF chips and waiting for unified packaging and shipment.

This chip belongs to one of the 35 "bottleneck" technologies in the country, and without it, cars would no longer have a "sensory system".

Making cars has always been the "dream" of Huzhou. After all, a complete vehicle, composed of tens of thousands of components, can drive an ultra long industrial chain.

When the auto market starts to "shuffle", it will not only affect the Lebensraum of enterprises, but also the way to upgrade the city.

After several years of 'frenzy', the domestic new energy vehicle market is transitioning from being a 'passionate' vehicle manufacturer to a 'intensive cultivation' stage in vertical fields such as research and development, supply chain, and branding.

As one of the core components of new energy, batteries are particularly evident.

The connection between Changzhou and batteries began in 2015, and the start-up company AVIC Lithium Battery was in a difficult situation.

Jintan District, Changzhou City, faced pressure to "bottom out" and attracted its headquarters. In the following years, relying on the strong rise of the new energy industry, the enterprise experienced explosive growth, with a market value of over 60 billion yuan, ranking sixth among similar enterprises worldwide.

Starting from this year, Changzhou has successively introduced several leading enterprises such as Ningde Times and Beidian Aist. Now, the integrity of Changzhou's power battery industry chain is as high as 97%, and its shipment volume ranks first in the country, achieving double industry growth for two consecutive years.

In the decisive year of sprinting towards the city of trillions of GDP, the small power battery is the biggest bargaining chip for Changzhou to build a "new energy city".

Wang Qing, Deputy Director of the Market Economy Research Institute of the Development Research Center of the State Council, believes that the way out for new energy vehicles is different from the next development path for fuel vehicles.

The dominant players in the entire industry chain and value chain may derive more dominant players from the host factory.

At this year's Shanghai Auto Show, the lineup of automotive technology and supply chain exhibitors further expanded, increasing from two separate exhibition areas in 2021 to three, confirming the new development trend of new energy vehicles. However, globally, only 10 Chinese companies made it to the top 100 automotive parts suppliers list last year, with total revenue accounting for less than 5% of the global top 100 suppliers. This is both an opportunity and perhaps the focus of the next competition.

(Take a look at news reporter Wang Cheng, Zhang Qi, Wu Zhenhua, Sun Jiaxun, Xia Yinfei, Plateau)