In his speech, Wang Ting, assistant to the general manager of Chery Automobile Co., Ltd. and executive director of the procurement center, reviewed the development of Chery Group in 2023, combined with some trends in global development, and talked about some trends in the current ** chain.
He believes that in the new generation of ** chain system, the focus is on the chip of the car and its ecosystemThe chain will show a trend of short chain and blockization in the regional layout, with the city carrier, the vehicle as the core, and the product as the link, and the blockade has become an important way to concentrate the chainIn the first-class chain of automobiles, carbon peak and carbon neutrality have become a must, and it is also an opportunity for many enterprises to use carbon peaking and carbon neutrality to establish new competitive advantages.
Under these trends, Chery Automobile has made some explorations and attempts in the construction of the first chain, mainly including reserving new technologies, reconstructing new models, capturing new opportunities, creating new value, and creating new ecosystemsIndustry resource sharing, parts and components are close to the local, and digital intelligence of chain managementAdhere to continuous innovation, adhere to common values, and adhere to sustainable development.
The following is a transcript of the speech in the Royal Hall.
Dear Dr. Jia Ke, good morning, friends of the automotive ecological chain!
I am Wang Hall of Chery Automobile, and I am entrusted by Dr. Jia Ke to share with you some thoughts on the growth of Chery Automobile today.
The topic of my speech today is "Cohesion, Momentum, Cooperation, and Customer Success". The reason for sharing this topic is mainly to share with you Chery Automobile's exploration in the management of the first chain, and at the same time seek your support and help. Riding the trend forward means that we must make good use of the good momentum of the current development of the automotive industry and take advantage of the trendTaking advantage of the momentum and achieving customers is that we must do first-class chain management, pursue the balance of QCD, and use new technologies to ensure high quality and reduce costs, so as to benefit end customers, make customers excited, and make customers satisfied, and the ultimate goal is to create value for customers, which is my interpretation of the title.
I will elaborate on the development of Chery Group, the trend analysis of the first chain, and the management practice of Chery Automobile in the first chain.
As of October this year, Chery has more than 12 million global customers, including more than 3.5 million overseas customers, ranking first in passenger car exports for 19 consecutive years, returning to the mainstream of the industry with a strong attitude, and a new journey has begun. From January to October this year, Chery Automobile sold a total of 145360,000 vehicles, of which more than 200,000 vehicles in a single month in October, with the help of partners, Chery took off again and ranked among the top three independently.
According to the Passenger Car Association, the retail sales of passenger cars in the narrow sense in October were about 2.02 million units, a year-on-year increase of 95%。Chery Group's overall sales growth rate exceeded 50%, achieving "acceleration" at a speed of more than 5 times that of the industry, and the high-end brand Xingtu has doubled its growth.
Chery, which has always adhered to scientific and technological innovation, cross-border innovation, and integrated innovation, will continue to invest more than 100 billion yuan in R&D funds in the next five years to help the five major technical fields of Mars architecture, Kunpeng Power, Lion Intelligent Cabin, Dazhuo Intelligent Driving, and Galaxy Ecology, and continuously improve 19+3 core technologies, and continue to build a world-leading technology system and an innovative and honest customer experience.
Quality is Chery's "lifeblood", Jd.In the 2023 China New Car Quality Ranking released by Power, Chery ranked first among its own brands for the first time, and a number of products ranked first in subdivisions, making "Quality Chery" a golden signboard and a winning weapon.
Over the years, Chery has adhered to the upward development of the brand, adhered to the development of globalization, and made every effort to build world-class brands and products. In 2023, Chery has been sold to more than 80 countries and regions overseas, with an annual export volume of about 900,000 units, a year-on-year increase of 2 times. In addition, in order to cope with the changes in overseas markets, we have gradually started a new layout, a new journey, a new life, a new image, and a new starting point, and Chery has become a business card for Chinese auto brands to go overseas.
The above achievements are inseparable from the strong support of the excellent partners here. In 2023, we adhere to the concept of co-creation, co-construction and win-win, organize 44 of the world's top 100 leading companies, 35% of the joint venture mainstream leading business to carry out strategic cooperation activities, and organize 27 technology exhibitions to learn from each other and Xi learn from each other's strengths and weaknesses. Fly with the phoenix in order to fly higher and more beautifully, build an excellent ecosystem, and create a better self.
The previous review of Chery Group's development in 2023 will be carried out, and then combined with some trends in global development, let's talk about some trends in the current ** chain changes.
In the new stage of development, the first chain driven by electrification and intelligence is gradually becoming the leading part of the automobile industry, and the barriers to new entrants are gradually increasing. For traditional first-chain enterprises that are slow or not transformed in the traditional structure, they will face huge challenges and the risk of being eliminated. Intelligent electric has become the dominant force, and the time point has been greatly advanced or shortened, which is the main change of the first chain structure.
In this period of historical change, the development of the first chain has shown ten major trends. These ten trends are the summary of Zhang Yongwei, Secretary-General of the China Electric Vehicle 100 Association, at the 4th Global New Energy and Intelligent Vehicle ** Chain Innovation Conference.
In the new generation of ** chain system, the focus is on the chip of the car and its ecosystem. In 2027, the global automotive semiconductor market will be close to $100 billion, with China accounting for about 30% of the world's total. Under the situation of huge chip scale, the competition between countries around automotive chips will be the competition of long-term and long-chain ecosystems. The trend of integrated development of chips, software, and ecosystems is becoming more and more obvious, and in the entire ** chain, it is the automotive chip and ecosystem that determine the success or failure of the chain.
In the past three years, everyone has experienced a crisis, called the chip crisis. Through the chip crisis, we have met a lot of friends in the chip industry. Now that the crisis has improved, we should be more bound to chip companies. Why?Because the chip is the underlying logic of our platform, generalization, and standardization, as long as the enterprise wants to do the three modernizations, it must start from the underlying logic of the chip.
The chain will show a trend of short chain and blockization in the regional layout, with the city carrier, the vehicle as the core, and the product as the link, and the blockade has become an important way to concentrate the chainIn fact, some of our friends have laid out very early, such as BYD Automobile, basically more than 70% of the cost of the whole vehicle can be supplied and distributed in the park, and the supply radius will not exceed 3 kilometers. For example, Wuhan, where we held the summit a few years ago, will definitely exceed more than 80% of the cost of the vehicle within 100 kilometers, and these regionalized chain clusters will also become an important part of the competitiveness of the automobile industry.
* The chain presents a development trend of "double carbon". The automotive chain industry, including vehicle enterprises, can achieve the development of "double carbon" through a variety of paths. For example, the development of green manufacturing products, the promotion of the whole process of green manufacturing, the use of clean green energy, the use of green logistics operation services, the implementation of low-carbon management of the whole life cycle of enterprises, etc. In the automotive chain, carbon peak and carbon neutrality have become a must, which is also an opportunity for many companies to use "double carbon" to establish new competitive advantages. Chery is still far behind the industry in this regard, and we need to catch up.
There is an old Chinese saying that is very good, "the times make heroes". In this change, a number of competitive first-chain enterprises will emerge, and even new auto parts first-class manufacturers with global influence will emerge to form a deeply integrated model and provide one-stop and full-stack solutions for the upstream and downstream of OEMs. "One trick is eaten all over the world", and the top businessmen who have the right to speak on key technologies will become the leaders of collaboration.
The future is full of uncertainty. How do you turn uncertainty into certainty?Just as a sailor can't complain about the weather, we have to deal with it.
Chery Automobile has made some explorations and attempts in the construction of the first chain, which I summarize as "five new, three modernizations, and three cornerstones".
The five new ones are to reserve new technologies, reconstruct new models, capture new opportunities, create new value, and create new ecosystemsThe three modernizations refer to the sharing of industry resources, the proximity of parts and components, and the digital intelligence of chain managementThe three cornerstones are to insist on continuous innovation, adhere to common values, and adhere to sustainable development.
Adhering to the "five new, three modernizations, and three cornerstones" to build Chery's characteristic ** chain is the core direction of our work in the next five years.
Let me explain them one by one for you.
Stock up on new technologies. In the era of dual carbon, 5G and artificial intelligence, the car will be in the field of intelligence for the second half of the finals, Chery in accordance with the six steps to reserve new technologies, and excellent business to establish close cooperative relations, and finally focus on the needs of customer consumption upgrades, insight into the development trend of technology, forward-looking layout. Actively reserve first-class business resources, develop a generation, reserve a generation, and pre-research a generation.
Chery always welcomes new technologies. In the past two days, many of our parts manufacturers have displayed their latest products and latest technologies, and we welcome you to bring these new technologies to Chery at any time to jointly empower customers and create value for customers.
Refactor the new model. In this era of increasing involution, cost optimization is always the main theme of autobots. The traditional model has been unable to achieve a qualitative breakthrough, and vertical integration with breadth and depth has become the best means to pursue the ultimate cost and achieve new breakthroughs. Vertical integration, I believe you are no stranger, in April this year, in the Lingxuan class Changxing station, I had the honor to share this thinking with the Lingxuan class.
Vertical, as the name suggests, is to manage the downward exploration, from the first level of business to.
Second, the depth of business control;Integration is to reduce the variety, merge similar items, expand the number of single varieties, and improve efficiency.
Vertical integration mainly focuses on three aspects: technology integration, core software and hardware decoupling, white box delivery, and finding ways to turn black boxes into gray boxes and gray boxes into white boxes;**Chain integration, the core is to manage down, from the first to the second level and then to the first business, the more strategic the category, the more we must go to the lower level, even traced back to raw materials, mines, etc.;Ecological integration, also known as localization integration, one of the 10 major trends of the first chain introduced earlier is short chain and blocking, and the core is to build an industrial ecology and cluster, which is of great help to reduce costs and ensure safety.
Capture new opportunities. There are many changes in the industry, and there are many potential opportunities. Among them, we think that the mining of the chain structure is a good opportunity.
The traditional chain is a chain structure, and the upstream and downstream are matched with resources according to the division of responsibilitiesThe new ** circle is customer-centric, value-oriented, presenting an open and win-win three-dimensional Internet-like structure, and carrying out accurate and flexible resource allocation according to demand.
In the past, we spent 90% of our energy focusing on tier1, but now we must change from focusing on tier1 to focusing on tier2 and tier3. Tesla has redefined the car and reconstructed the industrial chain. As of 2022, Tesla has 89 first-tier merchants and 1,195 second-tier merchants. Traditional car companies such as Volkswagen and Toyota generally have more than 200 first-tier companies and more than 1,800 second-tier companies. This is a new breakthrough point, and it is also where the new opportunity lies.
Create new value. Procurement managers must shift from a focus on unit price to a focus on total cost of ownership. When we choose the best business, in addition to considering QCD, we should also consider comprehensive factors such as after-sales costs, convenience of exporting overseas, and ESG. Only by calculating the comprehensive accounts can we choose the best partners.
In addition, we also need to pay attention to the customer's perception point and find new customer experiences to empower customers. When designing, creating, and providing value for customers, enterprises should start from customer orientation, and take the customer's perception of value as the determining factorWhat configuration do customers really like?How can we exceed our customers' expectations?How do we excite our customers?Only by understanding the real needs of customers can we create value for customers and create value for ourselves from the product itself.
Create a new ecosystem. Different categories, cooperation models and ecological models are different, we establish procurement systems and cooperative relations by category, make full use of the Yaoguang laboratory project, and carry out cross-border integration with the industry where the new technology is located with a more outgoing and inclusive attitude.
For traditional parts, we must follow the objective law to ensure quality and quantity;For new energy components, we focus on mastering the core technology to achieve the control of vehicle performance;For new technology components, we focus on innovation in development mode and cooperation mode, and achieve long-term mutual benefit and win-win results with partners.
Let's talk about the three modernizations.
The three modernizations are the general requirements of the automotive industry, and it is also the general trend to jump out of their own industry to find the three modernizations, and it is our ultimate expectation to apply the world's leading technology on a large scale and ultimately achieve customers.
The first is the sharing of industry resources. Chery has established a three-dimensional management of the group that is mainly promoted by the core brand and extended to the group, and at the same time, we maintain close contact with friends to promote the three-dimensional management of major parts and components in the industry. BYD Chairman Wang Chuanfu once said: "Together is the Chinese car", here I want to say that the sharing of excellent business resources together is the bright future of Chinese automobiles.
The second is the localization of parts and components. We repeatedly emphasize proximity and regionalization because it is really too important. In China, we are promoting the localization of major production bases, and we welcome all excellent partners here to work with us to expand cooperation.
Internationally, we are actively carrying out overseas layout, and we also sincerely invite outstanding entrepreneurs here to go overseas with us to develop and draw a blueprint together. Promoting local and global support not only helps to improve the security of supply, but also reduces costs and improves quality. Through the improvement of the whole value chain, the ultimate goal is to benefit customers and create value for customers.
The third is the digital intelligence of the first chain management. Frankly speaking, Chery has not done a good enough job in this regard, we should keep up with the leading ICT enterprises, and gradually improve the six looks: look at risks, operations, information, business, exceptions, and tasks, promote the construction of the group's integrated chain, and simultaneously promote the improvement of the digital level of the chain, and create an end-to-end interoperable smart chain.
I particularly emphasize end-to-end digitalization here because assuming that only OEMs do digitalization, and the first chain partner cannot achieve the same frequency resonance if it does not do digitalization.
Three cornerstones. The first is to insist on continuous innovation. Innovation is the soul of Chery's orderly development, looking back at the cultural and spiritual roots since Chery's establishment, I think it is to always adhere to continuous innovation, and all our partners must adhere to continuous innovation in the construction of the internal value chain to the external first chain and the whole chain of customers.
The second is to adhere to common values, which are the cornerstone of long-term cooperation. To build the brand, reputation and integrity of Chery's first chain, the most important thing is that we must do what we promise. Create an open and transparent communication environmentEstablish an interactive and coordinated competition mechanism, and establish a culture of honesty and self-discipline cooperation. We have always adhered to the concept of cooperation that the first chain is a win-win chain, and common development and mutual achievement are our purposes. So we have to have common values, which is a responsibility.
The third is to adhere to sustainable development. The sustainable development of the automotive chain is a complex and important topic. By promoting the application of environmentally friendly materials and environmental protection technologies, realizing green chain management, promoting a circular economic model, improving resource efficiency and energy conservation, establishing partners and other measures to achieve sustainable development. This is our social responsibility, the merit is in the present generation, and the benefit is in the future.
Every sailor only takes the weather as an assumption, whether it's a sunny sky or a storm. Because we know that, first, we can't change it, second, it's fair to all, and third, we can overtake as long as we make good use of it.
In the current era of speed, efficiency and thinking, risks and opportunities coexist, good times and adversity coexist, we can only live better and go further if we strengthen our core competitiveness. Thank you!