In the past year, China's automobiles have basically completed the industrial upgrade to electrification and intelligence, and a new industrial cycle is coming. In an atmosphere of pessimism about the future, we believe that 2024 is the beginning of a new cycle for China's economy and an optimistic new decade for automobiles.
Editor丨Zhijia.com Fish frozen in ice.
At the "2024 Smart Car Award Ceremony" held on January 24, Jia Hongbing, founder of Zhijia Media, shared "2024: The Best Gift of Chinese Cars and Smart Cars Entering No Man's Land".
He said that after achieving a production and sales scale of 30 million in China, the production and sales of new energy vehicles exceeded 9 million, and the export exceeded 5 million, there are deficiencies in defining the Chinese market with a big automobile country and an automobile power.
Although Chinese automakers have experienced a year of crazy involution, under this full competition, Chinese auto brands have preceded joint venture brands and foreign brandsIt has realized the industrial upgrading of intelligence and electrification。China's auto industry has entered the no-man's land of product definition and intelligent driving, and Chinese automakers are beginning to try and make mistakes in the exploration of new automobiles.
It is precisely because China's auto industry has completed this upgrade, for the industry's pessimistic expectations for 2024, Jia Hongbing said that China's auto industry is starting a new round of business cycle, is expected to open a relatively optimistic new decade.
For some in the industry, criticism of the Chinese market may trigger the Tasmanian effect, namelyThe silo effectHe said that today's successful intelligent functions in the Chinese market will gradually spread to the world market, China will not become an island, but the consumption habits of the world market will slowly become Chinese.
This optimistic expectation has sparked widespread discussion.
We will publish the full text of his speech below
For the evaluation of the automobile market in the past year, the word "volume" has been chewed up, and for 2024, the entire industry seems to continue this involution, anxiety, and hesitation.
Keywords about this year's industry have been pre-locked last year:"The Year of Obsolescence".
This year: both the high and the dead, but also the life and death.
The Chinese market is about to face a brutal round of elimination, and many people have already asserted that many brands are destined not to see the spring of 2025.
Chinese brands have basically completed the switch from pure fuel vehicles to new energy sources
But in the cruel year of 2023, although every brand is struggling to live, when I look back, I suddenly find that we have become a world automobile power. China has created an unprecedented production and sales scale of 30 million vehicles in the world's history.
Miao Wei, former Minister of Industry and Information Technology, once put forward three criteria for China to become a world automobile power
The first is a large automobile enterprise with a production and sales scale that has entered the top few in the world;
The second is to have its own proprietary technology, which is widely used in automotive products and leads the development of the global automotive industry;
Third, automotive products are not only aimed at the domestic market, but also can be exported in batches and occupy a place in the international market.
Regarding the first one, BYD's production and sales in 2023 will exceed 3 million units, and the results achieved are world-remarkable, and its limelight has the potential to overshadow Tesla.
China's power battery industry, represented by CATL, accounts for more than 50% of the global market, and is already the world's largest power battery manufacturer, and its business has entered the European and American markets.
In terms of export markets, China has become the world's largest exporter of automobiles for the first time with an export volume of 5 million units.
In 2023, there are three figures that can represent the vitality of China's auto industry: the annual production and sales will exceed 30 million units for the first time, the production and sales of new energy vehicles will exceed 9 million units for the first time, and overseas exports will exceed 5 million units for the first time (Zhijia.com Note: The vehicle export data released by the China Automobile Association is 4.91 million units, and according to the CCPIT, China's vehicle exports in 2023 have exceeded 5 million units).
Before using these three sets of numbers to prove that we are the world's automobile power, we might as well look at these three sets of numbers from a different perspective
China's first generation started in 1953 and ushered in its 70th anniversary in 2023, and in 2009, production and sales exceeded 10 million for the first time; Only four years later, in 2013, it surpassed 20 million again, but it took ten years to go from 20 million to 30 million.
An Lao (director of the China Automotive Advisory Committee An Qingheng) just mentioned that although the production and sales of automobiles have exceeded 30 million, a careful analysis has found that excluding the export part, domestic automobile sales have basically remained at the level of about 25 million in recent years, and the domestic sales of automobiles have even shown a downward trend year by year in recent years.
In other words, despite the best efforts of the whole industry, domestic automobile consumption has not achieved growth in recent years.
Why are these three breakthroughs achieved at the same time in 2023 - 30 million, 9 million, 5 million?
The immediate reasons are:Chinese brands have basically completed the switch from pure fuel vehicles to new energy vehicles.
The first-mover advantage of this switch has allowed China's auto industry to break the involution and achieve years of stagnation in production and sales through overseas markets.
China's new energy passenger vehicle production and sales accounted for 40% of the total passenger vehicle production and sales9% and 404%, and the market share of new energy products in Chinese brand passenger cars reached 499%。
Nearly half. The market share of Chinese brand passenger cars continues to stabilize at more than 50%. In 2023, the sales of Chinese brand passenger cars will reach 1,45960,000 units, a year-on-year increase of 241%, market share increased by 61 percentage point to 56 per cent.
In 2023, the export of new energy vehicles will be 12030,000 units, a year-on-year increase of 776%。
The export market is precisely because of the strong strength of China's own brand new energy vehicle products to achieve a breakthrough in volume.
However, from our observations, although Chinese brands have basically completed the switch from pure fuel vehicles to new energy vehicles. But China's auto market still needs to recognize two realities:
1. Pure electric vehicles have not yet achieved absolute advantages
2. The absolute advantage is the hybrid model (plug-in hybrid, extended range).
In 2023, China's pure electric vehicle sales will be 4.95 million, accounting for 676%, a decrease of 8 percentage points compared with 2022; Plug-in hybrid vehicle sales were 1.74 million units, accounting for 238%；The sales volume of extended-range hybrid vehicles was 630,000 units, accounting for 86%；Plug-in hybrids and extended-range hybrids will grow faster than BEVs in 2023, with their market share increasing by about 4% each.
The proportion of pure electric vehicles is likely to continue to decline in the next few years.
However, pure fuel vehicles have completely entered the twilight of idols, and the trend of being marginalized is irreversible.
In 2023, the domestic sales of traditional fuel passenger vehicles will be 140430,000 units, down 109 percent from the same period last year40,000 units, down 72%。
But Chinese automakers also have to be true to a reality:The rapid decline in the market share of fuel vehicles in China is not conducive to the healthy and orderly development of the industryThere will be two consequences:
Traditional sales channels will collapse;
The original industrial chain will be broken;
However, we firmly believe that pure fuel vehicles will not disappear and the life of the internal combustion engine will still last.
The veteran will only go away, not die.
Will China become an island in the world's auto industry?
These changes in the Chinese auto market have made us more and more unique compared to other major auto markets in the world, and some people are not able to understand them.
In 2023, Toyota and Hyundai will not only set a new high in sales in the global market, but also create a new profit in history, but they have suffered a sharp decline in the Chinese market.
This kind of double heaven makes international brands in the international market begin to look at the Chinese market with an incomprehensible and critical attitude and perspective.
Will the advantages that Chinese brands have achieved in the Chinese market through electrification and intelligence first be replicated in other markets around the world, or will China become an island far from the world's mainstream auto market?
Evidence can be found when the automobile power, the automobile power, and the automobile island seem to describe the Chinese market.
Concerns about "car silos" have arisen in the industry in recent years.
The so-called car island is someone who transferred the "Tasmanian effect" proposed by Darwin in "The Origin of Species" to the Chinese auto market.
Today's Tasmania is an isolated island 200 kilometers away from Australia in the southern hemisphere, covering an area of about 67,000 square kilometers.
According to archaeological experts, humans are about 4Tasmania landed 20,000 years ago, and about 10,000 years ago, the appearance of the Bass Strait severed the connection between Tasmania and the Australian mainland, and Tasmania has been isolated ever since.
This isolated living environment has gradually degraded the civilization on this island.
When the island was rediscovered in the 18th century, the people of the island lived the most primitive life, the ability to make tools had been lost, they could not weave clothes, they could only use the simplest stones and sticks as tools.
It took tens of thousands of years for humans to develop civilization from the Stone Age, and the indigenous people of Tasmania only took 10,000 years to bring civilization back to its most primitive state.
This phenomenon of degradation of civilization is known as the Tasmanian effect.
The portraits of Chinese car users that we see many Chinese and foreign auto brands, including some consulting agencies, often mention several aspects:
1. Chinese car users are more receptive to digital technologies such as intelligent networking (many foreign executives one-sidedly think that Chinese users especially like to sing karaoke in the car, like refrigerators, and color TVs);
2. Don't pay much attention to personal privacy;
3. Don't pay much attention to the handling performance of the car.
There seems to be a group of automobile consumers in the world with Chinese characteristics that are different from the rest of the world.
This concern and stereotype is biased, and the world's largest exporter of cars cannot be an island.
We have to firmly believe in three things:
1. There is no unique automobile consumer group with Chinese characteristics in the world;
Second, smart cars are not a product of the market with Chinese characteristics, and Chinese consumers will promote smart cars, including car refrigerators, color TVs, and large sofas, to become the common choice of the world's major car consumers.
3. The uniqueness of today's Chinese market is that China has become the birthplace of the world's automotive innovation.
However, the reason why there is such prejudice and concern in the market is that many people have not realized that there are shortcomings in defining China's auto industry as a big automobile country and an automobile power.
We believe that the biggest characteristics of today's Chinese auto market are:
China has entered a period of maturity.
We have built a stable, sustainable, iterative, and upward growth of the world's leading and industrial chain.
What are the characteristics of the maturity period:
There are buying and selling, life and death, advance and retreat.
There is constantly capital coming in, capital constantly going out, new brands are constantly born, and old brands are constantly disappearing.
In the past year, three new brands have been born in the Chinese market: Polar Stone, Zhijie, Xiaomi, etc.
At the same time, a number of old brands have disappeared: Weimar, Borgward, etc., Zhu Huarong, chairman of Changan Automobile, said that by 2023, 90% of new car brands have disappeared, such as Singularity Automobile, Zotye Automobile, Cheetah Automobile, Luxgen, Lifan Automobile, Brilliance China Automobile, Hainan Mazda, can be said to have disappeared.
In 2023, foreign capital such as Acura, Suzuki, Fiat, Opel, Renault, Jeep, and Mitsubishi will withdraw from the Chinese market.
At the same time, Volkswagen's investment in Xpeng, Stalantise's investment in Leap, and Middle East Capital's investment in NIO, Gaohe, and Qiantu Auto can all be regarded as new capital entry.
This kind of entry and exit, simply put, is four words: full competition.
China's first or the most important policy since the reform and opening up is:
Opening.
It is open to foreign capital on a limited basis, to private capital on a limited basis, and to all capital on an all-round basis.
Forty years ago, in 1984, Beijing Jeep Company, jointly invested by Beijing *** Company and Chrysler of the United States, was established, which is the first vehicle manufacturing joint venture in China.
Thirty years later, in 2014, with Tesla's entry into China, the relevant domestic departments began to open up qualification applications for new energy vehicle start-ups, and the vigorous new car manufacturing movement started.
In 2022, the shareholding restrictions were fully lifted to foreign investors, and BMW and Volkswagen became the controlling shareholders of joint ventures in China.
These three stages gave birth to three generations of local Chinese car companies and brands with completely different personalities and temperaments.
In fact, 2023 is only the second year of our full opening up to foreign investment, but what is the result of the market?
Reverse joint venture, reverse anxiety:In the past year, the price of fuel vehicles has been much higher than that of new energy vehicles (see "Has the Pricing System of Fuel Vehicles Collapsed?"). The bottom line of 200,000 yuan can't be kept).
To this end, they began to invest in and acquire local Chinese brands and technologies.
This change in landscape demonstrates the second characteristic of mature markets:
A source of innovation
1. China's local mainstream car companies have established independent and complete R&D centers to pursue full-stack self-research capabilities;
2. The world's auto giants have set up R&D centers in China comparable to their local scale, and Chinese R&D centers such as BMW, Mercedes-Benz, Continental, and Bosch have exported technological achievements to their global headquarters;
3. The Chinese market has established a relatively independent, but complete local smart electric vehicle industry chain.
This proves that there is no such thing as a unique Chinese market in the world that is different from the tastes of the world's consumers, and the only explanation is:The Chinese market is ahead of other markets.
China's auto industry has entered no man's land
1. No man's land defined by the product
2. No man's land for intelligent driving
These two no-man's lands are actually one no-man's land:No man's land of technology.
Wang Xia, president of the automotive industry branch of the China Council for the Promotion of International Trade, delivered a speech last year, he said:
The stacking of functions and the shallow application of new technologies have come to an endThe "lower fruits" are almost finished, and it will be more difficult to pick the "higher fruits". In the field of electric intelligence, China is no longer a follower but a pathfinder, and it is bound to bear more trial and error costs.
From the definition of products, especially the new models launched by Chinese brands have begun to be concerned by the old automobile powers, during which our car people are experiencing:A process from being caricatured and sarcastic to beginning to imitate, pay tribute, and even begin to respect.
Let's start by looking at what is the no-man's land of product definition:
1. Chinese automakers shorten the new car development cycle to 12-24 months; Internationally, it is usually 48-60 months, close to 4-5 years, and China has shortened the cycle by more than 50%;
2. For the first time, intelligent driving has become the core element of Chinese consumer buyers.
According to the data released by Xpeng Motors, users who buy the Xpeng G9 570 MAX version account for more than 50% of the intelligent driving functions; And 7% of the M7 MAX version customers choose Huawei's ADS high-end intelligent driving package.
Su Tan, general manager of the intelligent vehicle business department of the Intelligent Driving Business Group (IDG), said:
The latest survey shows that intelligent driving has shown signs of breaking the ice in the importance of car purchase decisions, and the proportion has increased significantly. This provides a very, very large number of opportunities for autonomous driving companies to apply products, put them on the car for mass production, and achieve a good closed-loop of user reputation and commercialization. "Intelligent driving has become a key factor in the core car purchase decision," he saysEspecially in the 150,000-250,000 range, and 250,000-300,000 ** range of new energy vehiclesThe penetration rate of core intelligent driving has increased very fast, almost doubling at a rate of two years. ”
iResearch's ** shows that the penetration rate of high-end intelligent driving is expected to exceed 10% in 2023 and 25% in 2025, and the market is currently in the blue ocean stage.
According to data released by the Ministry of Industry and Information Technology, in the first half of 2023, the proportion of new passenger car sales with combined driving assistance functions will reach 424%, an increase of nearly 10% over the same period last year.
3. There are four new trends in smart cars:
Chassis wire control,
The electronic and electrical architecture is integrated
The global operating system of the whole vehicle is AI-based
Virtualization of business models
The core of the above four trends is that the new generation of automobiles has begun to fully decouple software and hardware.
In terms of business model, hardware has begun to become an accessory to the software ecology, and the revenue created by software will continue to offset the losses suffered by the car due to the first warThe battle never ends.
According to a survey report released by Founder ** in 2023, 88% of Chinese users take the smart cockpit configuration into account when buying a car, and more than 47% of users are willing to pay for the value-added functions in the smart cockpit.
Chinese consumers are pushing for new business models for smart cars.
Is there a product on the market that embodies these four trends?
Yes. This is the NIO ET9 released not long ago: a silicon-based lifeform that is completely decoupled from software and hardware, has the best computing power, has an intelligent brain, and can fully drive itself.
The reason why it will not be delivered until the first quarter of next year is that it will take enough time to complete the technical research and development to realize the above vision.
In the past year, we have interviewed many people and asked them, "Can you say that China's smart cars are a generation ahead of their foreign counterparts in terms of product definition?" “
Many R&D personnel gave us a positive answer.
Of course, being leading in product definition does not mean leading in manufacturingSome shortcomings still need time to polish.
This is from a product definition perspective.
China's automobiles have completed industrial upgrading in deep involution.
Let's take a look at what is the no-man's land of intelligent driving:
1. In fact, China has fully opened L3, and conditional autonomous driving has been legally on the road;
China is currently the first market in the world to carry out large-scale high-speed NOA and urban NOA full liberalization. The battle for Kaesong for two consecutive years has basically been dominated by car manufacturers, and no city has introduced restrictive policies.
It can be said that China has in fact crossed the threshold of L3, and high-speed NOA and urban NOA are de facto conditional autonomous driving, which is what we often call L3 now.
The L3 and L4 test pilot policies promulgated last year are significantly lagging behind the policies of many pilot cities in China, which is more like a retrospective recognition of regulations and recognition of the legitimacy of pilots in various places.
In addition, at the technical level, the visual perception route of mapless intelligent driving and BEV+Transformers+OCC will further accelerate the popularization of L3.
2. The commercialization of L4 has been carried out in key cities in China;
In China's first-tier cities and even core areas such as Wuhan, Guangzhou, Shanghai Jiading, Beijing Yizhuang, and Shenzhen, Robotaxi has been connected to the online ride-hailing platform we use every day and has begun to operate commercially.
In Ordos and other places, Didi's Cargobot and Pony.ai's RoboTruck have started team operations.
China's smart cars drive into no man's land, what's in the no man's land?
There are the natives of China's first generation of smart cars, and there are also the keys to breaking the involution of Chinese cars.
Based on this, we have three expected judgments for the future:
1. China is expected to complete the full electrification (non-pure electrification) of the automobile industry before other countries in the world
2. China is expected to launch a generalized vehicle global operating system before other countries in the world (completely get rid of the situation that the operating system is controlled by others since the era of PCs and smartphones. )
3. It is expected to take the lead in the commercialization of unmanned driving in major cities across the country.
We say so much, it can be summed up in one sentence:
China's automobiles have completed industrial upgrading in deep involution.
In the past year, the pain and anxiety of many people around us are related to the changes in this industry: because in any market, industrial upgrading is always accompanied by the rapid progress of some enterprises, and other enterprises are slapped on the beach by the back waves.
But fortunately, China's super-large auto market has given Chinese cars a historic opportunity to switch tracks.
At this stage, our country can provide the world with the most valuable public good:
An open, unified market based on the rule of law.
As long as this market exists, globalization will exist, and a free and prosperous world will always exist.
Therefore, under various pessimistic expectations for the future, we believe that 2024 is the year for China's economy to meet a new cycle and an optimistic new decade for automobiles.
This is the most positive and optimistic expectation that China's auto industry has brought to us for the future.
In 202, we encouraged the automotive industry to embrace the "Smart Car Society", in 2021 we warned that "the world's automotive map is ushering in a fission year", and last year we proposed that "luxury brands are about to die".
For 2024, optimism and pessimism are both options, and we firmly choose to be optimistic.
2024 will be the first gift of Chinese automobiles, and it will also be a historic year for China to promote smart cars into no man's land.
These are some of our observations and reflections.
——Previous Intelligent Driving Annual Speeches——