Cheng Yuan: China Automotive Joint Venture is Ending

A young talent in the media community recently returned from a study tour abroad and is deeply anxious about the status quo in China’s auto industry. He exclaimed: “The Chinese auto industry has been involved in joint ventures for decades and seems to have done one thing: selling cars for foreign companies.” At first glance, it seems to be biased, but looking at the function of the joint venture, one cannot but admire what he said.

In the 29 years since Beijing Jeep, the first auto vehicle joint venture company, signed a contract, the Chinese auto industry has been running wild on the joint venture. The annual production and sales volume has increased from less than 200,000 units to nearly 20 million units, an increase of 100 times. It is indeed a brilliant achievement in terms of market size, and China has thus boasted itself as a “car big country,” but in fact it is becoming more and more. The more foreign car brands in the "world's largest market", but the self-owned brands are in a difficult position in the local market, the living space has been squeezed smaller and smaller, and the market share of self-owned brand passenger cars has dropped by 3.37 percentage points since last year. In the first four months of this year, sales fell another 5.2% year-on-year, and market share fell by 3.2% again. Is this the "other side" of our joint venture strategy?

"The JV cannot acquire core technology" is the world's best known "secret." Because of this, Japan's Nissan and South Korea's Hyundai and Daewoo have only been joint ventures for only a few short years, and they have declared their separation and development. Today, the Japanese and South Korean auto industry have only today. The world alone has so many automobile joint ventures in China, and the joint venture agreement is a sign of 30 years. Even worse, the first phase of the joint venture contract has not expired yet again. "30 years" was also considered to be a splendid achievement for the politicians.

A few years ago, some people questioned the "technology for the market," and this led to a very modest debate in the industry. Although it was ultimately inconclusive, it allowed the auto joint ventures to reveal themselves under the auspices of "reform and opening up." Small flaws.

Why does China Auto have so much love for joint ventures? Why should Chinese cars take the joint venture road forever? Just look at the joint venture's salary of 27 months a year, and the generous investment in new car-listed joint ventures can tell how much of the joint venture interest is, but this is only a representation. The auto joint venture will be conducted from the global inspection, project negotiation, and government approval until the company Operation, from beginning to end, has formed a complete benefit chain, and the people who are in it will have endless benefits. Who does not want to “finally carry out the joint venture”? Some people say that China's resistance to deepening reforms comes from vested interest groups, and the development of auto brands, and where does the resistance to building a true car power come from?

In fact, since the Chinese automobile industry has proposed a "high starting point, large quantities, and specialization" development policy, it is destined for the joint venture fate of the Chinese auto industry. Because it is possible to achieve a "high starting point, high volume, and specialization", only the automotive multinationals are destined to have only one joint venture for the Chinese auto industry.

In order to guarantee the "high starting point, large quantities, and specialization" of purity, the most persistent task of government departments for decades is to oppose the "scattered spread", that is, to prohibit domestic companies from producing cars. Before China's accession to the WTO, an independent brand project had not been approved. The sunshine and rain of all car “protection policies” were all spilled over the joint ventures. The biggest beneficiaries were multinational companies. When QunZen local companies entered the field of cars, the joint venture had not only formed an “economy scale” but also had a deep reputation in the brand reputation. This created the situation that today's sub-brands no matter how high the price-to-price ratio is, they are also unable to sell joint venture products. It was this policy intervention that caused Chinese local companies to “lose their starting line” and lost the best opportunity for development. Today's former government officials bragging about how to protect Chinese cars should actually seek multinational companies to receive rewards.

Speaking of this, I think that the industry has often used the term "business model" recently. When it comes to self-owned brands, some people will use the "business model" to fight against it, and the "individual brand" will be transformed into a political concept, which seems to emphasize autonomy. Brands means “politics” and “narrow nationalism”, while “business model” means working according to economic laws and market rules.

The so-called "business model" is the pursuit of the highest interests of corporate interests. In the early days of reform and opening up, the emancipation of the mindset was just like “time is money” and “development is the hard truth” and so on, emphasizing the “business model” and representing a new kind of knowledge and wisdom. Today, in the face of the current status of the Chinese auto industry and the emphasis on the “business model”, people feel that they have the same taste as “would rather sit in a BMW and cry in the back seat of a bicycle”.

I think that if you really only recognize the "business model," and how to make money, there is no reason to engage in independent brands. Clear things, engage in independent brands, brand reputation is not high, the car is not easy to sell, take a look at SAIC Motor Corporation, invested more than 400 billion yuan, how much money into the account? Isn't it a "lossy gain" deal?

If you only engage in the "business model," it would be best to produce mature models of multinational corporations, select the best sales talents and sell vehicles to joint venture companies. The Chinese do not engage in research and development, do not take risks, and only manage to make money. Or simply, like Brazil, Mexico, and Thailand, the joint-subsidiary company does not do it. All of it allows foreign companies to invest solely, and the government only manages the collection of taxes.

As a result, "Chinese Auto" will be incorporated into the "Global System" of multinational companies such as Volkswagen, Toyota, General Motors, Mercedes-Benz, BMW, and Hyundai-Kia, and "China Auto" will be powered by Volkswagen China General Motors China Toyota Honda China Nissan China Modern Kia China and so on formed an "international team," and the Chinese car was completely integrated into the world and realized "globalization."

Mr. Long Yongtu also recently made a high comment: “Companies registered in China are Chinese companies.” Then, companies that build Mercedes-Benz, BMW, and Audi in China are all Chinese companies. They can create “the same level as the international Mercedes-Benz and BMW. "In China, who would dare to say that China is not a "car power country"? In the future, the state leaders will not have to bring Xu Jianyi, Hu Maoyuan and Xu Yiping as their counterparts in Chinese companies to directly bring Wendeng of the Volkswagen, Toyota's Toyoda, Mercedes-Benz's Cai Che, and General Daniel. Ekson, Korea’s Hyundai Kia’s Zheng Mengjiu and others are even more imposing. As a group of "foreign stars" who play an important role like "The Founding of the People's Republic of China", did everyone not feel good about watching it?

Just such a car industry, I do not know future generations of people should compliment us "brave innovation", or will we call us "slavery", "foreign comprador"?

Overhead Crane

Overhead crane, commonly called a bridge crane, eot crane, is a type of crane found in industrial environments. An overhead crane consists of parallel runways with a traveling bridge spanning the gap. A hoist, the lifting component of a crane, travels along the bridge. Usually there are include many kinds of types crane, firstly it was divided into single girder and double girder overhead crane. There are included normal type, european type, magnetic crane, grab crane, explosion proof crane, and so on. According to the different using environment and different application. We will choose the most suitable crane for customer.

Bridge Crane,Workshop Crane,Overhead Traveling Crane,Eot Crane

XINXIANG DEGONG MACHINERY CO., LTD. , https://www.degongcrane.com