Survey: Who will lead the reform of China's auto consumption concept?

Do Chinese auto brand cars need a thorough revolution in auto consumption concepts? The answer is yes, the key depends on who will guide. The latest industry survey at Gasgoo Auto Show (from November 21 to November 28, the effective number of voters was 1848) shows that government officials will be the most powerful guiding force in this transformation.

China's domestic self-owned brand car Xixi has a long history of entering the government's bus procurement system. However, due to the short growth period, weak brand influence, lack of product safety and comfort, and even the appearance of the car is not enough to win people's attention. It has always been difficult to enter the eyes of government officials, and it is therefore only possible to see foreign brands divide the rapidly growing bus market at their own homes. However, as the government attaches greater importance to the development of the autonomous auto industry, this long-cherished wish of China's own-brand automakers is expected to be realized. A government-led revolution in car consumption may be brewing.

Recently, a micro-blog by Zhu Yiping, Assistant Secretary General of the China Association of Automobile Manufacturers, attracted the attention of the industry. According to its disclosure, on the morning of November 15, the Ministry of Industry and Information Technology of the Ministry of Industry and Information Technology held the "Accelerate Auto Innovation Forum in China" and discussed and conveyed the spirit from the Central Government: "It is recommended that we start with senior leaders and take the lead in riding domestically produced branded automobiles. This is undoubtedly a positive signal, at least indicating that high-level government officials have realized that senior leaders take the lead in riding their own brand cars will play a huge role in promoting the development of the auto industry as a whole.

Undoubtedly, the concept of Chinese automobile consumption that is popular in the present is extremely unfavorable for the development of self-owned brands.

The poll results of Survey 1 show that as many as 90% of the respondents believe that Chinese consumers clearly have the consumption characteristics of “advocating foreign to look down on local” car brands, and that only 1% of consumers are currently inclined to “know local brands”.

It is an indisputable fact that the development of China's self-owned brand cars has remained weak for ten years after China's accession to the WTO, and it is mainly competing in the low-end market. However, it cannot be denied that independent brands have made major breakthroughs in recent years and many have emerged. Home-grown manufacturers with potential for growth. Although the product quality has been greatly improved, it is still very difficult to change the image of low price in the minds of consumers.

We believe that the current concept of car consumption in China, which has become a “following foreigner”, has become a major climate. If there is no strong guiding force involved, it will be difficult to reverse this situation in the foreseeable future.

Fortunately, the release of the Central Committee's above-mentioned directive spirit has brought a glimmer of hope to its own-brand cars.

In survey 2, 74% of people think that officials take the lead in riding on self-owned brand cars. This is clearly demonstrated by the fact that only 14% of people are opposed to it. Another 12% still have doubts and say “not to say”.

From the feedback of our offline investigation and interview results, at present, some independent brand manufacturers are very active in their efforts to enter the bus procurement system. On the one hand, because of the large amount of bus purchases per year, the market capacity is objective, but the longer-term consideration is the bus pair. Ordinary consumers play an obvious leading role. In other words, in the eyes of many independent brand manufacturers, as long as the bus market is opened, the replacement of government officials' seats with self-owned brand models means that the general automobile consumer market has been opened.

Among them, the demonstration of senior government leaders is even more important.

Due to the political system and multiple historical factors, the buses used by Chinese government officials are clearly differentiated according to the level of their administrative levels. If senior leaders are able to take the lead in the use of local self-owned brand cars, the buses of the officials below them will be driven by the buses. At the administrative level, there is actually a certain degree of binding force. Of course, lower-level officials will also be more willing to take the initiative to benchmark the selection of the corresponding self-owned brand cars. Therefore, the exemplary role of senior government leaders in taking the lead in the use of self-owned brand cars in the bus industry cannot be underestimated. Once the government’s actions are actually implemented, the exemplary meaning of ordinary consumers will have more market value. Independent brands create a very good market environment.

And the role of this exemplary significance is not limited to this. In addition to the market-oriented efforts to promote the brand value and image of the brand of auto brands, the market revenue and the need to continuously meet the safety and comfort of the bus market, manufacturers are bound to further Increase investment in product development and product quality to form a virtuous circle.

Of course, in the face of this positive signal, the industry has not shown corresponding optimism.

Although the central government’s spirit of “recommended to start with senior leaders and take the lead in domestic self-owned brand vehicles” has, to a certain extent, boosted the confidence of self-owned brand manufacturers, whether this signal indicates that independent brands can take advantage of this Entering the bus procurement system is still unknown. This can be seen from our survey results.

In survey 3, only 25% of the people were optimistic about this signal and thought that the self-owned brand car has entered the bus procurement system in full. Twenty-four percent of people disagreed with this and denied the actual driving effect behind this positive signal. It is also worth our attention that up to 51% of the people did not make a clear statement and chose to “don’t say it”.

The industry’s lack of hope for this signal is also based on consideration of many practical factors.

In fact, China’s “Government Procurement Law” that has been in effect since January 1, 2003 has explicitly stipulated that “government procurement should purchase domestic goods, engineering, and services”. However, it includes many fields such as automobiles. Although "home goods" are cost-effective but they have not received due attention, one of the reasons is that the identification of the concept of "domestic goods" has not been implemented by scientific standards. Although the industry has many appeals, it has been delayed.

In addition, the Central Government once revised the standards for official vehicles used by state agencies, and stipulated that since 2009, all levels of governments and public institutions will be equipped with and updated official vehicles, and the proportion of self-owned brands should not be less than 50%. Although most of the independent brand manufacturers were included in the supply list, and a large number of self-branded automobile models entered the government procurement catalog, the actual order purchase volume was low, and the bottom limit of 50% was far from being reached. This policy regulation has so far stayed in the document. At the same time, it did not enter the implementation level.

In fact, as early as 2004, China had already issued the "Circular on Adjusting the Standards for the Use of Vehicles by Party and Government Authorities." It stipulated that the standard for the purchase of general buses shall be 2.0 liters (including 2.0 liters) of vehicle exhaust volume, and the price shall be 250,000 yuan ( Including 250,000 yuan). In recent days, the "Administrative Measures for the Use of Official Vehicles for Party and Government Organs" was issued, which imposes further restrictions on the purchase of models. For instance, it is stipulated that the general procurement standards for official vehicles shall be reduced to 1.8 liters and within 180,000 yuan. This new regulation also basically excludes the current mainstream foreign-funded B-class models from the threshold of bus procurement. However, self-owned brand vehicles still have difficulties in trying to squeeze into the bus procurement system.

The reasons for this are self-evident: Foreign brands have established mature trading rules with each other through long-term dealings with various government departments, and independent brands have stepped in and broken this game rule; some government officials regard the car as a “face”. Some of them are unable to accept the self-owned brand cars with low brand and product quality and performance; many government officials will support their own brands to stay on the verbal, and deal with all interest groups...

The more crucial point comes from our review of the views in the offline survey interviews: We learned that while most respondents welcomed the government's encouragement of senior leaders to take the lead in driving home-grown self-owned brands, they also worried that this stayed in verbality. Whether the call can really become binding, and the corresponding implementation rules and supervision system does not support the follow-up is likely to make such a central call similar to the above major policies and regulations eventually in form.

From survey 4, we can clearly see that the vast majority of those with a ratio of 74% think that the government needs to educate consumers to promote the development of self-owned brands. Only 21% of the people opposed this. It can be seen that although the current industry does not fully agree with the excessive involvement of government executives in the micro-management of the auto industry, the mainstream view still recognizes that the government gives more guidance to its own brands at the consumption level to help it. This is also one of the most important means by which Japan, South Korea, Russia and other countries, including India and Germany, support the local auto industry.

We believe that with the continuous improvement in the quality and brand appeal of self-owned brands, China’s current concept of “respecting foreigners to look down on the local” will inevitably gradually change, but without the intervention of the government and leading officials, this transformation process will After a very long process, it will also extend the growth cycle of self-owned brand manufacturers to a certain extent. From the perspective of the overall competitiveness of a country’s industry, this will place the auto industry in a passive place. Therefore, we suggest that senior government leaders should promptly participate in and guide this revolution in the automobile consumption concept.