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[Nikkei BP News Agency] From October 20 to 21, the "2003 Tokyo International Motor Summit" sponsored by the "Nikkei Business" editorial office (published by Nikkei BP) was held in Tokyo. The summit was held for the second time since 2001, with the theme of "the 21st century automobile industry, new markets, and new technologies." Nearly 40 people, including the heads of all the major car manufacturers in the world, and heavyweights responsible for sales and technology, attended the meeting and delivered wonderful speeches.
At this year's summit in which the top figures in the automotive industry gather, the most striking feature is the China Forum, which continues to grow at a high rate. At present, auto manufacturers and component manufacturers in various countries are rushing to enter China where labor is cheap and rich, economic growth and purchasing power are rapidly rising. There are also opinions that China’s auto production will reach 10 million in 2010, becoming the second largest market in the world after the United States. "The Boiling Chinese Market" - Is It True?
The journalist exclusively interviewed Miao Wei, general manager of Dongfeng Motor Co., Ltd., who is the most compelling person in the Chinese automobile industry at this summit. Dongfeng is one of China's "three major auto makers" and its cooperation with Japanese manufacturers is very active. Following a cooperation package with Nissan Motor last year, this year it also established a joint venture with Honda. General Manager Miao of the first visit to Japan talked with reporters about the future of China's automobile policy and the insider's cooperation with Nissan and Honda.
Q: It is estimated that China's auto production this year will reach 4 million, of which cars account for about half. According to your estimation, at what scale will the Chinese auto market develop to the 2008 Olympic Games and the 2010 Shanghai International Exhibition?
A: It is estimated that only the car will reach about 7 million cars. By then, Dongfeng hopes to gain 18% market share.
â— The new policy is favorable to the three major automobile manufacturers
Q: In the process of rapid market expansion, what do you think are the positive factors and negative factors?
A: The biggest positive factor is: With the strong growth of China's economy, personal purchasing power is increasing year by year. A few years ago, the number of cars purchased by state agencies and taxi companies accounted for 80% of the market, but about 60% of them were purchased by individuals last year. The development of the expressway is also very rapid. China’s expressways have reached 20,000 kilometers and are still under construction. As car manufacturers launch new models one after another, competition has intensified, and car prices have been declining. At the same time, more and more people have already reached the standard of living for buying private cars.
On the other hand, the drawbacks caused by the increase in cars have begun to show. For example, taking Beijing, which accounts for 10% of national sales, as an example, sales have grown at a base of 300,000 vehicles per year in recent years. As a result, despite the ongoing construction of roads, social problems such as increasingly serious traffic jams and deteriorating atmospheric pollution have been triggered. Local governments such as provinces and cities are likely to take measures such as restricting the issuance of car licenses and cooling the popularity of cars. As long as the corresponding restrictions are not introduced, China's auto market will continue to expand.
Q: Following China's release of the automobile industry policy in 1984, a new policy will be issued this year. How do you think the new policy will affect Dongfeng Motor's market positioning and strategy?
A: The new policy may pay more attention to large-scale manufacturers and it is very beneficial to Dongfeng Motor, one of China's three major auto makers. The purpose of the new policy is to promote competition and optimize the industrial structure in the Chinese auto industry where more than 100 manufacturers are fiercely competing.
As one of the largest manufacturers, Dongfeng Motor must also do its utmost to carry out business reforms, such as mergers and acquisitions of other manufacturers, the establishment of an industrial group to restructure. However, reorganization is not a simple layoff. More importantly, it is advancing into new areas and carrying out developmental reforms.
For example, car manufacturers generally have many manufacturing and sales personnel, but there are very few repairs. Most employees of the factory have the technology. As long as they have been trained to arrange the series of sales stores under the company, they can deploy personnel without laying off employees and improve production efficiency. In addition, because Dongfeng Motor produces large-scale trucks, many employees own driver's licenses for large-scale vehicles and can enrich this part of the staff to the logistics business. At present, the number of people deployed to different areas of business is around 1,000. In the near future, it is planned to reach around 10,000 people.
Q: Miao General Manager himself, like the partner Nissan President Carlos Ghosn, succeeded in quickly reforming Dongfeng Motor's operating conditions and thus won the reputation of “China’s Ghosnâ€. What is the trick of business reform?
A: In a word, how to mobilize the enthusiasm of the staff. As many state-owned enterprises have experienced, it is impossible to mobilize everyone's energy in an environment where wages are ensured regardless of whether they are desperately working or absent.
First of all, I set up numerical targets for the managers, business ministers and ministers of subsidiaries to evaluate their implementation and reflect this situation in treatment. Whether it is promotion or salary reduction or salary reduction, it has a direct relationship with my own efforts. The company’s employees are actively working to achieve their goals and the company’s overall reforms have been successful.
Of course, the conflict of people who are used to eating “big pot rice†is also very strong.
However, at that time, Dongfeng Motor had a serious shortage of liquidity, and at the worst, it was unable to pay salaries for four consecutive months. The government also made it clear that "If the profit cannot be realized before the end of 2000, the company will be bankrupted. In order to avoid bankruptcy, only the persistence of reforms.
◠The reform measures led Nissan’s president Ghosn’s forehead
Q: In September last year, your company and Nissan signed a cooperation agreement, including co-production of cars and trucks, and began cooperation in various fields. Why choose Nissan?
A: With China's accession to the WTO, the domestic automobile industry will encounter fierce competition including foreign companies. We also understand that only through the use of foreign capital to carry out business reforms can we get out of the woods.
Of course, this does not mean that we decided to cooperate with Nissan from the outset. Please do not misunderstand this point. Before deciding to cooperate with Nissan, we also explored contact with a number of foreign automakers to see if they were interested in cooperating with Shibuya City and Xiangfan City, the old base areas of Dongfeng Motor.
However, due to the inconvenience of transportation, the two factories located in the western part of Hubei Province did not intend to cooperate here. Of course, Dongfeng Motor's performance is also a very important reason for the other party not interested.
Although Dongfeng Motor had established a joint venture company with Yulon Motors, a Taiwanese company with a capital partnership with Nissan, to use Nissan technology to produce "Bluebird" in Guangzhou, it did not consider cooperating with Nissan itself.
Now it can be said publicly that the initial cooperation with Nissan was limited to producing "March"-class small cars in a factory in Xiangfan City. The opportunity for large-scale cooperation was the visit of President Ghosn in Beijing in July 2001.
President Ghosn was famous as a successful reformist. Wu Bangguo, who was then Deputy Prime Minister, said at the meeting that “I hope that the successful reforms in Japan can also result in Chinaâ€, director of the National Economic and Trade Commission Li Rongrong also told Ghosn. Introduced the purchase of 10 film factories in China and quickly expanded the success of Eastman Kodak's business in China.
Ghosn, who visited government officials, re-understanding the growth of the Chinese automotive market, and at the same time recognized the potential of Dongfeng Motor, which is steadily improving in accordance with my reform strategy. This is the background for Nissan to successfully cooperate with Nissan.
◠Expand Honda’s joint venture production
Q: Dongfeng Motor will also joint venture with Honda to produce RV "CR-V" in Wuhan.
A: The local production of parts made in China will begin officially in February next year. Due to the full use of Dongfeng Motor’s base areas in Hubei Province and parts and components manufacturers in Guangzhou, which has a joint venture with Toyota’s engine, it is expected that the local procurement rate of parts will be able to achieve higher levels from the beginning, reaching more than 40%. .
Q: Miao General Manager proposed a plan to expand the "STEPWGN" and "CIVIC" models at the 2003 Tokyo International Automobile Summit.
A: At present, it is only a preliminary consideration. In the negotiations with Honda, the model has not yet been decided, but additional cars will be produced. "(Small van) STREAM" is also one of the choices. However, before adding a new model, the most important thing is to increase the CR-V's annual output to 30,000 units.
Q: Honda has a joint venture with Guangzhou Auto - Guangzhou Honda. Will Dongfeng and Guangzhou Honda compete for the Honda model?
A: When Honda began producing cars in Guangzhou, it was also considered that Dongfeng Motor was its use partner.
However, Dongfeng failed to obtain approval for the production of passenger cars in Guangzhou. As a result, Honda’s cooperation partner became Guangzhou Auto. At that time, Dongfeng and Honda’s engine cooperation was approved, so Dongfeng Honda was established in Guangzhou and the engine was provided to nearby Guangzhou Honda. From this situation it can also be imagined that the relationship between Dongfeng Motor and Guangzhou Auto is very close today.
Some people also summarized this cooperation as "three ones." In other words, Dongfeng, Guangzhou, and Honda are the “three†partners. Through the two joint ventures of Guangzhou Honda and Dongfeng Honda, they are responsible for the production and sale of the “1†project for Honda brand cars.
Under current circumstances, Guangzhou Honda and Dongfeng Honda cannot sell Honda cars at the same sales outlets, subject to China’s automobile policy. However, if the three companies cooperate to set up a company, they can sell Honda brand cars in one sales channel. This is a very reasonable thing in brand strategy and improving efficiency. Although this idea is still in the research stage, I hope to implement this plan.
Q: At present, Dongfeng Motor cooperates with Nissan, Honda, PSA, and Kia Motors (of Korea Hyundai Motor Group) in a total of four companies. Is there any plan for further cooperation with other foreign companies such as Toyota Motor?
A: It is not clear about the finished car. However, we will actively promote cooperation in the parts and components business.
Q: Is it considered that the cars produced by the four series of joint venture factories will be sold in the form of "Dongfeng Channel"?
A: The four joint venture manufacturers have their own brands. We want to cherish this image, so the sales channels will take their own form.
Q: China's famous electronics manufacturers are actively exploring overseas markets, such as exporting and setting up factories abroad. Is there any plan to enter overseas?
A: As a first step, we plan to export parts and components manufactured in China and use them at partners' overseas bases. For example, since Honda’s “Accord†is a global model and its quality standards are the same, parts produced in China are fully applicable to factories in other countries, and they are highly price competitive. PSA's French plant has begun to use parts produced in Xiangfan.
Second, it plans to export small commercial vehicles such as pick-up trucks. Sales are made through Nissan's overseas sales network. It has not yet been decided where to sell, but at least the first car will be sold within the year. After repeated trials of market research and sales in multiple regions, a system for formal sales is established. Overseas investments such as setting up factories overseas are our long-term goals.
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