Global Auto Forum China: Industry leaders call for accelerating M&As & innovation

On the first day of the two-day 5^th Annual Global Automotive Forum (GAF) which began yesterday in Wuhan, China on the theme of ‘The Transformation of China’s Automotive Industry’, the backdrop for the discussion was the global economic environment and the ever- changing challenges in the automotive industry worldwide. 

The forum provides a platform for industry leaders, experts, financiers, analysts and media to exchange their opinions and share their knowledge to better anticipate the development of China’s automotive industry. 

As a key industry in China, the current output value of the automotive industry contributes 6 trillion yuan (Rs 6,018,000 crore) each year to the Chinese economy, the production and sales volume ranked first among the world. China accounts for about a quarter of the world’s automotive market, making it a veritable automobile manufacturing and selling power.

Making the opening remarks, Wang Ruixiang, chairman of China Machinery Industry Federation, said transforming the focus from volume production to quality production is critical. He said,

“China's automotive industry has entered into a critical period where it is facing comprehensive transformation and upgrading from a focus on producing volume to producing quality.”

China should avoid blind acceleration and a GDP ranking-oriented target and should consider structural adjustments which can be achieved by accelerating mergers and acquisitions and increasing innovation. We should provide more energy efficient automotive products, prioritise globalisation as a strategic goal and expand aftermarket service and supply chain cooperation to build global industrial competitiveness,” he added.  

Meanwhile, Wang Xia, chairman of the China Council for the Promotion of International Trade (CCPIT), Automotive Committee, China, felt the only way forward for the conventional automotive industry is a comprehensive transformation.  “There is a huge contrast between the Chinese automotive market volume and the relatively weak position of the Chinese brand and technology,” he said.  

Product positioning and pricing of Chinese brands versus international brands overlap on a large scale and there is now fierce competition, speedy inclusion of the Internet and mobile networking technology and large data processing technology into the passenger car industry.  

Wang Xia said: “Our traditional auto industry and businesses have to make tough choices, and comprehensive transformation is the only way forward. At last year’s forum, we reached many constructive conclusions, a consensus built upon the many years of experience of the industry leaders and experts in attendance. It was agreed that during the strengthening of China's economic re-structuring and upgrading, the transformation of China's automobile had entered a critical period."

Wang went on to say that: "I strongly believe in the next five to 10 years, disruptive changes in the automotive industry will go beyond our imagination.”

The Global Automotive Forum provides a highly international perspective and attracts the attention of the global automotive leaders. The attendees at the opening of the forum included: Wang Ruixiang, chairman of China Machinery Industry Federation, Chen Lin , commercial counsellor, Department of Outward Investment and Economic Cooperation, Wang Xia, chairman of the Automotive Committee of the China Council for the Promotion of International Trade, Ruan Chengfa, vice-secretary of Hubei Province Party Committee and secretary of Wuhan Municipal Party Committee, Tang Liangzhi, mayor of Wuhan Municipal Government as well as more than 1,000 delegates from domestic and foreign OEMs, component suppliers and other automotive industry or industry related companies.

Today, GAF will see the first forum on ‘The Environment, Energy Conservation and New Energy Vehicles’ delivered by Michael Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), UK; and Keiji Ohtsu, managing officer, Automobile R&D Centre, Honda R&D, Japan.  

It will be followed by a designer roundtable discussion on ‘New Angles and New Mentality in Auto Design’ where the panelists are James Hope, corporate design director, Chery Motors, China; Guy Burgoyne, design Director, Geely Automotive, China; Magnus Aspegren, director, Creative Consulting, BMW Design Works Shanghai, China/Germany; and Diana Kloster, Design Colour and Trim China, VW Group China, China/Germany.

The third forum will be of much interest to component suppliers: ‘The Transformation Path of China’s Auto Suppliers’ where the panelists are Joe Greenwell, chairman, the Automotive Investment Organization; Chairman of the RAC Foundation, UK; Jay K Kunkel, president of Asia Pacific; Member of Executive Council, Lear Corporation, USA; Dr Simon Yang, president of Delphi China; managing director, Asia Pacific, Connection Systems, Delphi Electrical/Electronic Architecture, China/USA; and Edouard de Pirey, Valeo China President, China/France.

The closing plenary will be on ‘The Road Ahead for the Auto Industry’ – how 2015 is shaping up, predictions for 2020, key challenges and opportunities and intelligent transportation systems. The panelists for this forum are Matt Tsien, GM executive vice-president and president of GM China, USA; Li Shufu, chairman of Geely Group, China; Qi Yumin, chairman of Brilliance Auto Group, China; and Xiang Xingchu, general manager of JAC Motors, China.