Integrate resources to cope with competition in the new era

A few days ago, FAW Group, Dongfeng Group and China Military Equipment Group once again ushered in a new round of high-level positions in the management staff. This is another important personnel adjustment involving the three automobile central enterprises following the adjustment of the top positions of FAW Group and China Military Equipment Group last year. Analysts believe that this also indicates the further strengthening of the strategic integration of the three major automobile central enterprises.

The flow of talent in the automotive field has been very frequent. According to statistics, in 2017 there were changes in the positions of more than 150 senior managers in the automotive industry. However, as strategically deployed as it is today, the adjustment of executives among such large-scale automobile central enterprises is relatively rare. With the advent of a new era, auto companies have also entered a new period of competitive development. The integration of managers and resources has also become an important manifestation of this change.

Consolidation of Automotive Central Enterprises

Among the changes in the automotive industry, the adjustment among the three central enterprises of FAW, Dongfeng, and Bingshuang Group has become the focus of attention.

In 2015, when Yan Wufeng, Chairman of Nobel Group Corporation, and Xu Ping, the chairman of Dongfeng Motor, had an inter-registration, it also opened the curtain for the integration of the three automobile central enterprises.

Afterwards, in 2017, An Tiecheng, the general manager of No.1 Steam Sedan, was transferred to the position of deputy general manager of Dongfeng Motor Co., Ltd. At that time, deputy general manager of Dongfeng Motor Qiu Xiandong was transferred to the deputy general manager of any steam group. In August 2017, FAW Group and Chang'an Group again reported a major move. Xu Liuping, who was then the Chairman of Changan Automobile, was transferred to the chairman of any of the group. When Xu Ping, chairman of Renwuqi Group, was transferred to the chairmanship of the Corps Group.

In May 2018, the three automobile central enterprises again ushered in the mobilization of executives. You Yong served as the standing committee member and deputy general manager of Dongfeng Corporation Party Committee. Liu Weidong no longer served as the standing committee member and deputy general manager of Dongfeng Corporation Party Committee. He went to the Changan Automobile Group under the China Military Equipment Group, and the executive vice president and secretary of the Party Committee of Dongfeng Motor Co., Ltd. Lei Pingyun. From Dongfeng Corporation, served as Deputy General Manager of FAW Group.

This series of frequent high-level individuals mobilized a lot of attention from the society. The news that the three automobile central enterprises will be heavily integrated will be heard in a matter of time. So far, the three parties have not shown any sign of consolidation, but have continuously strengthened the integration of resources between them and sought to jointly cope with the new automotive market competition.

In December 2017, Dongfeng Corporation, FAW Group and Changan Automobile signed a strategic cooperation framework agreement, which will carry out a full range of forward-looking and common technological innovations, full-value-chain operations of automobiles, joint-venture “going global” and exploration of new business models. Cooperation, the three parties share the cooperation results, in order to enhance the three core capabilities and international competitiveness.

Personnel Adjustment Accelerates Auto Industry Deepening Reform

In addition to promoting the integration of resources, another important goal for personnel adjustment among auto companies is to accelerate the reform and transformation of auto companies.

After Xu Liuping joined the FAW Group, he immediately began to promote FAW Group's reform and adjustment, and proposed a "new red flag strategy" to fully revitalize the Hongqi brand. On the one hand, it has made great efforts to adjust FAW's organizational structure, employment, and other institutional mechanisms. On the other hand, it vigorously promoted the rejuvenation of its own Red Flag brand. Establish new standards, systems, processes, and build longer-term products, technologies, services, etc., and strive to achieve a better competitive advantage in the market in 2018 and 2019, so that products, technologies, services, etc. can reach new levels. Red flag brand requirements.

Originally, FAW was a centralized management-type organizational structure. After Xu Zuiping took office, he made a relatively large adjustment, subdivided into business units, responsible for the rights, benefits, production, supply, and sales. The relevant directives are no longer issued from the headquarters and are only issued from that business unit. This will greatly increase the clarity and enforceability of the entire management chain and the directives, so that the correlation between the general staff and the final results will be closely related.

At the same time, in order to effectively implement the new Hongqi strategy, FAW has done a lot of work in product, R&D and so on. Including the R&D centers in the “Three Kingdoms and Five Lands” around the world, we will establish a new energy-based development direction and invite world-renowned designers to join us. At the highest level of the company, there is a weekly discussion about the world's leading technologies. These technologies will be applied in a series of products in 2018, 2019, and 2020.

According to reports, in the future, FAW will continue to display the concept of the Red Flag brand, including new energy, intelligent network, including the shape of DNA, in the follow-up products.

According to FAW's plan, FAW's own brand will achieve the goal of selling 100,000 units by 2020, 300,000 units by 2025, and 500,000 units by 2035.

Increased competition in the new situation

With the continuous opening of the automotive industry, the automotive market is facing a new competition. The continuous introduction of policies such as the reduction of VAT, reduction of tariffs and the release of joint stocks ratios indicates that the automobile industry has entered a new stage of competition. Increased resource integration and the exertion of group effects have become an advantageous way for Chinese auto companies to respond to new competition.

The Ministry of Finance recently announced that since July 1, 2018, it has lowered the import tariffs on vehicles and parts.

After the release of the policy, imported luxury brands such as Volvo, Porsche, BMW and Audi all expressed that this policy will benefit consumers and help to further enhance market vitality. It will assess and adjust the current price system and the retail price. Make adjustments to serve consumers at more optimized prices.

Industry experts said that the reduction in automobile tariffs will help increase market competition and help upgrade auto consumption. The reduction of automobile tariffs will increase the number of customers entering the store, promote sales, and the reduction of automobile tariffs will be the strongest support for the strengthening of the luxury car market this year. However, as China's auto market continues to deepen, it will also make market competition more intense.

A person in charge of an auto company stated that with the changes in import tariffs and the policy of loosening the ratio of stocks in the future, it is expected that the elimination of the automobile industry will intensify, and mergers and reorganizations will become increasingly fierce. At the same time, the reform and opening-up of the automobile industry is a general trend. In the context of the domestic and foreign competition in the auto industry has entered a white-hot stage, we must strengthen the complementarity, integration, and utilization of the value chain resources, both internally and externally. Looking for a win-win situation in innovation and open cooperation.