Lingkun Zhou, President of Deloitte China Consulting Enterprise Technology & Performance Practice Group.
In the long run, Chinese automakers need to "evolve" to go overseas - from products to value chains, which needs to focus on "building and consolidating local cooperation ecology" and "overseas construction of value chain links".
In recent years, with the deepening of the transformation of the automobile industry, it is time for Chinese car companies to go overseas!According to data from the China Automobile Association, in October this year, China's automobile exports were about 39220,000 units, a year-on-year increase of 597%, the annual is expected to reach 4.5 million, China may become the world's largest car exporter. Among them, the export volume of new energy vehicles continued to rise, and the growth rate was higher than **. In October 1 this year, China's new energy vehicle exports were 9950,000 units, a year-on-year increase of 991%。
Going overseas is becoming the "second growth curve" for many Chinese car companies. So, what are the opportunities and challenges for Chinese car companies in the process of globalization?How to face the explicit barriers and barriers?What is the key to its global success?Lingkun Zhou, President of Deloitte China Consulting's Enterprise Technology & Performance Practice Group, answered our questions.
Competitiveness tags: cost-effectiveness and product power
In recent years, Chinese automakers have made breakthroughs in the global market, with regional expansion, rich product matrix, and gradual improvement of the value chain. Among them, new energy vehicles performed well. Zhou Lingkun said that there are two main labels for the current export of Chinese electric vehicle models: cost performance and product power.
Let's look at the price-performance ratio first. According to UBS's latest teardown report, the low production cost of BYD seals is not only a low-cost advantage brought by production factors, but also a systematic cost advantage brought by technological innovation, high integration of parts and components, and vertical integration of the first chain. In a sense, strong vertical integration capability means that it can give the market a competitive cost performance and more controllable. For example, three-quarters of the seal's parts are self-produced, especially the core components with a high proportion of BOM such as batteries, motors, and power semiconductors, which are self-developed and self-produced, not subject to first-class suppliers, and have stronger cost control. These factors give Chinese NEV OEMs a significant cost advantage over international OEMs.
Let's look at the product power. This label stems from the all-round improvement of the technical strength of Chinese car companies. For example, BYD's self-developed blade battery, highly integrated electric drive system, and silicon carbide power module enable the product to obtain higher battery energy density (higher mileage), stronger performance experience, and faster charging speed. This is a capability that is difficult for OEMs that rely on first-class solutions and are only responsible for integration and integration. In addition, China's own brands are equipped with more advanced electronic and electrical architectures, adhere to self-research in key areas of intelligence, and have a better user experience in cockpit, human-computer interaction, and intelligent driving.
From the product to the value chain
There is no doubt that "cost performance" and "product power" are the most important competitiveness of Chinese car companies going overseas, but this does not mean that there are no challenges for car companies to go overseas. Zhou Lingkun said frankly, "Some of the challenges exist objectively, such as the different road facilities overseas, traffic rules, charging standards, etc.."The other part is subjective, including tariff barriers, protectionism, and so on. ”
As for subjective challenges, Deloitte believes that Chinese automakers need to be proactive and proactive. For example, the European Commission recently announced the launch of a countervailing investigation into China's electric vehicles, and France urged the European Union to launch an anti-dumping investigation on China's electric vehicles. Subsequently, it may also evolve into a dual investigation of anti-dumping and anti-subsidy. Zhou Lingkun said frankly, "This may dilute the cost-effective advantage of Chinese car companies." ”
Zhou Lingkun reminded that in addition to explicit tariff barriers, Chinese companies also need to be vigilant against the most important barriers. For example, the European Union recently passed a new battery law, which proposes strict regulations on the sustainability, safety and end-of-life management of power batteries used in electric vehicles sold locally. The above-mentioned laws of the European Union may evolve into international guidelines in the future, which will be introduced and implemented by other overseas markets, which makes Chinese electric vehicle and parts companies face compliance standards that are much higher than those in China when going overseas, and must bear more onerous compliance responsibilities and pay higher compliance costs. For Chinese electric vehicle companies, carbon compliance is a capability shortcoming that must be filled, and attention is paid to the carbon management of the first chain to avoid potential legal risks and penalties, which will damage the reputation of the enterprise.
In the long run, Deloitte believes that Chinese automakers need to "evolve" to go overseas – from products to value chains, which requires efforts from "building and consolidating local cooperation ecosystems" and "overseas construction of value chain links".
First, build a local ecosystem. In addition to refining the traditional sales and after-sales links, car companies in the new overseas era need to pay more attention to local cooperation in new services and new experiences of car ownership, and bring high-quality services that meet local standards and needs in terms of Internet of Vehicles, charging, and autonomous driving. In the process of cooperation, car companies need to flexibly adjust the relevant domestic experience, establish an efficient partner screening framework and management methods, and explore the "1+1>2" overseas cooperation model.
Second, the overseas construction of the value chain. To deepen the overseas market, car companies also need to consider building local R&D centers, vehicle and parts factories, logistics companies, etc., to improve overseas market insight, production capacity, reduce vehicle costs, and achieve optimal allocation of resources. The layout of the value chain has a profound impact on long-term overseas business, and car companies need to fully consider the local supply and demand characteristics, including demand scale, industry maturity, capacity concentration, ** policies, production and logistics costs and other factors. The layout and construction of the value chain can also reduce the best barriers to export models and the exposure to external risks, and will also dispel the doubts of the local market about Chinese products and reverse consumers' perception of Chinese brands.
Do a good job of "localization" and tell the story of Chinese brands
Zhou Lingkun said that compared with the localization level of foreign car companies in the Chinese market, the localization construction of Chinese electric vehicle companies in overseas markets is still in a very early stage. Localization involves many aspects, and the lack of brand recognition and influence is one of the biggest challenges faced by Chinese electric vehicle companies going overseas. How to tell the new Chinese brand story to overseas consumers and export the brand concept and brand culture of Chinese car companies overseas is the next topic that Chinese electric vehicle companies need to think about urgently.
According to Deloitte's research, there are several ways to improve the brand awareness and image of Chinese automakers:
Product localization: including product tuning that is more in line with the driving and riding needs of local users, software adaptation to the local application ecology, and self-developed or independently developed cockpit applications in some key contact points, including voice, UI, etc., highlighting differentiated intelligent capabilities
Localization of production: For EV OEMs that have already achieved a certain amount of sales, localization of production needs to be put on the agenda, which can avoid international disputes and political risks, and win trust and reputation for enterprises in the local area
Innovative business models and services: including building direct sales channels, cooperating with local partners to provide users with diversified energy replenishment networks, optimizing car owner APP Internet of Vehicles services, and building user communities
Extensive cooperation ecology: not limited to traditional marketing and sales, including key user touchpoints such as charging and battery replacement, autonomous driving, and after-sales service, we have established a wide ecological network to provide consumers with high-quality, convenient and efficient services, and lay the foundation for improving user reputation and reputation and establishing user stickiness in the future
Efficient Organizational Decision-Making: Hire local talent in key roles to ensure that the core business is led by those who know the local market and consumers best
Compliance capabilities: including product compliance, operational compliance, financial compliance, etc. Enterprises should do a good job of product planning and adaptive development in advance to ensure that products meet target market access conditions and emerging regulatory requirements;Identify and manage potential first-chain risks, employee risks, and business partner risks, protect corporate interests and reputations, and enhance the sustainable development of global business.