Documentation Brochure - Hamburg Summit

China´s Emerging Automotive Sector
Zhu Yanfeng, China FAW Group
Corporation, expects China´s automobile
production to double by 2010
Summing up the outlook for
China’s automobile industry, Bernd
Gottschalk, President of the German
Automotive Industry Association (VDA),
stated that “today China is one of the
great challenges for the automotive
industry – and soon it will be one of the
great challengers.” The challenge is a
fast-growing market with production
set to increase from well over five
million vehicles this year to more than
ten million in 2010, according to Zhu
Yanfeng, President of China FAW Group
Corporation and Chairman of the CFIE
Presidium.
You can see with the naked eye how
fast the automobile industry has grown
in China in recent years, said Mei Zhaorong,
Honorary Director of the Institute
of World Development, State Council of
China, and recipient of the China-Europe
Friendship Award of the Hamburg Summit
2006, “You used to see more motorcycles
than cars on Chinese roads, now it
is the other way round.” Gottschalk
agreed, saying that “no other market has
experienced such growth in volume and
nowhere else have such large investments
been made in recent years.” The
automotive market in China has
changed significantly since China joined
the WTO in 2001, said Winfried Vahland,
President and CEO of Volkswagen Group
China. Vahland, whose company was active
in China at a very early stage and is
one of the leading manufacturers, noted
that “we have to fight for all our customers.”
Volkswagen does so mainly by
means of state-of-the-art technology.
“Today we have 1,600 R&D people in China,
and we will be increasing that number,”
he explained. VW has decided to offer
only the latest technology in China,
partly with a view to reducing the
contribution of traffic toward environmental
pollution.
Zhu Yanfeng promised that “the
automotive sector will play a key role in
the economy.” In the next five years
China would develop one or two brands
of its own. It would do so, however, in
accordance with the axiom “some
people play tennis, we play ping-pong.”
In other words, Chinese firms seek to
conquer the low-price segment, whereas
cooperations or imports will continue to
predominate at the upper end of the
market. This view was shared by Zhang
Guangsheng, Vice Chairman of the
Board of the Shanghai Automotive
Industry Corp. (SAIC). “Domestic competition
corresponds with international
cooperation because competitiveness is
a difficult process, but the result is
worth it,” Zhang said.
In China and everywhere else in the
world, the emergence of strong brands
is a key factor in modern competition
on the automotive market. “For this to
happen it is important that automotive
production in China is integrated
seamlessly into the worldwide supply
networks of manufacturers and suppliers,“
Gottschalk stated. In this case,
Gottschalk said, he is convinced that
China will achieve its targets.
“Everything I read in the five-year plans
I have seen in reality. And whenever
a competitor shows up, take him
seriously. Chinese competition in
Europe will happen.”