The joint venture’s autonomy is strongly challenged by Japan’s guidance on independent innovation

Recently, at an automotive industry forum, ministries and commissions such as the Ministry of Industry and Information Technology and the National Development and Reform Commission have successively elaborated on the concept of joint ventures, emphasizing that "joint venture autonomy" is an important part of the development of the Chinese automobile industry, and revealed that in future policy development, joint ventures and independent brands will be treated equally. . This sudden statement made the industry launch new discussions on the joint venture that has gradually forgotten, and many people believe that this is extremely detrimental to Chinese-owned brands.

According to the latest industry survey, more than half (51%) of people in the industry expressed “quite disappointment” that the officials of the two ministries are in favor of joint ventures. They think this is an example of foreign companies wanting to monopolize state-owned enterprises and jointly affecting policies; secondly, there are as many as 38 The % of people believe that the government's support for joint venture autonomy does not translate into technology. Instead, it may pose a threat to China's own indigenous brands, and thus expresses its concern about the true autonomy of the Chinese auto industry. In this survey, only 6% of the people stood in the position of supporting joint venture autonomy. An anonymous veteran of the automotive industry expressed angrily: “The so-called joint venture autonomy is logically unreasonable and it does not work in practice. Let’s take a look at the reality, and it’s hard to avoid relying on Japan to guide us in the auto technology innovation?”

The advent of joint ventures is not just a product of market competition, it can not be separated from the government's promotion. Most of the joint ventures that currently compete in the Chinese market are formed by multinational automakers and China’s large state-owned groups. In the past few decades, the brands, products and technologies introduced by joint ventures have always been imported by foreign parties. The Chinese that had hoped to learn technology through joint ventures have not made significant progress. Under this background, the joint venture's independent birth can be seen as a measure of the government's reliance on joint ventures and changing the joint venture's position as a multinational company foundry.

However, judging from the current joint venture brands and models, the autonomy of the joint venture seems to have deviated from its original intention. In the actual operation process, the joint venture has become a platform for multinational corporations to directly use the outdated system, eliminating the process of joint research and development by both Chinese and foreign parties and putting a new logo on the market. Moreover, judging from the joint-venture models that have already been launched, they all belong to low-end products and form a positive competition with China Capital's own brands. On the issue of joint venture autonomy, GM, Honda and Nissan, which have performed more positively, have all followed this method.

In our interviews with people in the industry, an analyst from a consultancy who frequently contacts high-level multinational companies believes that multinational companies have played a leading role in the process of joint ventures. They feel that the Chinese market, which is in the process of development, needs such a car: a low-priced car that does not necessarily have advanced technology but is stable and cost-effective. And China's own domestic brands cannot provide cars with high stability. However, if multinational companies’ own brands are used, there is a risk that consumers will reduce their brand recognition. Therefore, the current joint venture autonomy has become virtually a practice for multinational companies to develop low-priced vehicles and to seize low-end vehicle markets. As for the Chinese side of the joint venture, the launch of a joint venture will give itself ownership of the brand. If the brand is successful in the market, it can also increase income and increase profits. Under the government's goal of no quantifiable “independent” assessment, the majority of Chinese joint ventures are happy to see the joint venture’s autonomy.

Joint ventures using their joint ventures to independently promote low-cost cars have become the trend. In the short term, the biggest impact will be on China's own domestic brands. Because the current joint venture autonomy is the direct use of foreign investment in the old platform to build a car, this means that huge research and development costs can be saved, which is unfair to independent brands. Encouraging such joint ventures and autonomy is undoubtedly a stifling of truly independent innovation.

The atmosphere of disappointment and worry is filled. However, since the people who have questioned and rejected the opposition, why is the official reliance on joint ventures? We have given three options for this issue in Survey 2. Among them, the “(government) is trapped in the target of achieving 50% market share in the 12th Five-Year Brand”, which accounts for half (50%) Secondly, the official statement of this position is considered to be "the last effort of the (government) efforts to "pull the market for technology" policy" and has also been recognized by 30% of the industry. In addition, about 20% of the people think that this issue is complicated and the interests involved are too many. They chose to “unclear”.

The Central Government has always had the determination to develop and expand the auto industry. In 2009, the State Council passed a three-year "automobile industry adjustment and revitalization plan", which clearly stated that in 2011, the target of "the domestic market share of self-owned brand passenger vehicles exceeds 40%, of which cars exceed 30%." Later, in another draft of the plan drafted by the department in charge of the automotive industry, it was also mentioned that “by 2015, the self-owned brand passenger car should account for 50% of the market share, and the share of self-owned brand cars should account for 40%. ”

According to data released by the China Automobile Association recently, starting from 2010, the market share of self-owned brands has gradually declined. In July this year, the share of autonomous passenger car brands has dropped to 36.4%, setting a new low since September 2008. And this trend has not been slowed down. The mainstream self-owned brand enterprises have already made active strategic adjustments to cope with this situation. Among them, BYD chairman Wang Chuanfu said that in 2011 BYD has announced that the company has entered the adjustment year, with a focus on quality. At the beginning of this year, BYD officials announced that the overall upgrade of the entire vehicle warranty period is 4 years or 100,000 kilometers; Chery Automobile also implemented drastic restructuring and personnel adjustments, reduced excess brands and models; Geely and Great Wall also conducted sales channels. Positive reforms to boost sales. However, these adjustments will not be effective immediately. It will take three to five years or even longer to be effective. This means that it is difficult to complete the 50% target by relying on existing independent brands in the short term, and joint venture autonomy becomes a great hope.

The auto ownership of the joint-venture auto companies has a foreign investment background, which is undoubtedly more attractive to consumers than their own brands. At the same time, they use old foreign platforms, which saves them a large amount of development costs, which makes them very close to the people in terms of prices. For example, the SAIC-GM-Wuling’s compact car, the Baojun 630, has a guidance price of 62,800-95,800 yuan, which is equivalent to the same level of BYD Sutra (53,100-700,000). In the future, with the extension of the product line, joint venture autonomy is expected to promote the growth of the entire autonomous market, which will help achieve the government’s established target of own brand market share.

In addition, a considerable proportion of people believe that the emergence of joint venture autonomy is the final stroke of the Chinese government’s “market for technology” policy. The current automobile joint venture policy is basically regarded as a failure strategy in the industry. From the government’s point of view, the emergence of joint venture autonomy should shoulder the task of start-up technology. However, if government officials are only busy forming a joint name for the joint venture and do not impose restrictions on its “autonomous” component, then it will enter the joint venture policy. Hey. Even reaching its own share goal is harmful.

After the officials supported the news of the joint venture's independence, some analysts believe that at this time, resuming the joint venture's independence, or closely related to the policy of supporting independent brands that may be introduced next. However, in the opinion of many people in the industry, whether the official's position indicates that domestic self-owned brand development policies may be difficult to judge. In the survey on this issue, about 34% of participants believe that the information disclosed so far is not clear enough and they chose not to speak. The official's position indicates that both domestic and joint-venture brands have received 33% of the supporters, compared with 33% of the respondents.

While supporting joint venture autonomy, Chen Jianguo, deputy director of the Industrial Coordination Department of the National Development and Reform Commission, also stated at a recent forum that the country does not have a clear industrial policy to support the development of joint venture self-owned brands, nor does it hope to introduce its own brand support policies during the year. Big. However, when the autonomy of the joint venture was gradually forgotten by the industry, the officials of the two ministries also stated that it was unusual for the joint venture to have its own name. Previously, there was no official conclusion as to how to define the scope of self-owned brands and self-owned brands. Su Bo, the deputy minister of the Ministry of Industry and Information Technology, recently stated that only by solving the problem of “who is the self-determination” can effective coverage be achieved at the policy level. In particular, support for the next step in industrial technological transformation will directly affect the automotive industry from large to strong. The transformation. According to comments from officials of the National Development and Reform Commission, this means that although the government does not have a clear industrial policy to support the development of a joint venture's own brand, after the joint venture has autonomously owned its own brand, the government is likely to introduce a policy of supporting all independent brands.

From a reality point of view, it is more necessary for local brands to support their own performance. Their market performance has been deteriorating. However, self-improvement is also difficult due to factors such as the consumers’ esteem, the weak technical foundation, and corporate management and institutions. The inherent conditions of joint ventures are much better than those of independent brands. Although they are still in their infancy, but with more joint ventures launching joint-venture autonomous models, the market's future development prospects are still promising.

If the government intends to use its joint venture to change the existing joint venture to become a substitute factory, it should request the joint venture to ensure the localization of research and development to gain the opportunity to learn technology. If the autonomy of the joint venture is only a trick for multinational corporations to renew the market with old technology, then the government should not support it. The government should clarify the strategic significance of China's development of independent auto industry and reverse the decline of its own share. Moreover, achieving 50% of the market share is only a phase target. Upgrading independent R&D capabilities and international competitiveness of auto companies is the ultimate goal.