The Sustainable Development of China's Automobile Industry under High Oil Prices 2008 Record of China Automotive Industry Development Summit Forum

The "2008 China Automotive Industry Development" summit forum hosted by Shanghai Securities News was held in Shanghai. Tong Dongcheng, Deputy General Manager of Dongfeng Corporation, General Manager of Dongfeng Commercial Vehicle Company, Xu Changming, Director of Information Resources Development Department of China National Information Center, Gan Wenwei, President of General Motors China, and Quan Chunze, President of Delphi Asia Pacific Region, were invited to participate in the forum and discussed The topic of sustainable development of China's auto industry under the oil price has been a positive and in-depth summit.
How to deal with the rise in oil prices?

Tong Dongcheng: As we all know, the international oil price has exceeded $140 a barrel. I think there are now two indisputable facts. First, we must recognize that the current increase in oil prices is a social existence. Second, we must take countermeasures. This response is exactly a prerequisite for the healthy development of the Chinese auto industry. Well, as a business, I think there are two responsibilities. The first responsibility is to meet the needs of our customers through technological upgrading to develop more energy-saving and emission-reducing products. The second responsibility is still to seek more alternative energy sources through technological upgrading. Finding alternative energy sources is the responsibility of society as a whole, and not just a business, a responsibility of a discipline. This will inevitably lead to a corresponding alliance between our company and the enterprise. As a company, it is called a horizontal combination, or it means that the effect is maximized.

In addition, the state must also formulate more stringent laws and regulations for high-energy-consuming industries in terms of laws and policies. As consumers, we should be more sensible to look at the current reality of energy and social development. We need more rationality in the consumption of energy-intensive individuals to extend the lives of the Earth.

Xu Changming: The international community now has different views on the rapid growth of oil prices. Some think that the supply is limited, while others believe that the hot money is sought after by the United States. There may be many factors, but in any case, the current price of oil may not be able to maintain in the future. Recovery to three or forty dollars a barrel is less likely. With the background of high oil prices, auto companies must make choices, and consumers must also make decisions based on the level of oil prices. This will ensure the sustainable development of the automotive industry.

Haruo: I'm Korean. I was in the United States in 1971. I remember that at that time, the price of oil was still 30 cents per gallon. Well, now the price of oil in the United States is 4 US dollars per gallon.

I remember that in the early 1970s, some Japanese auto companies started to enter the American auto market. In 1976, I was at General Motors. At that time, we did not regard the Japanese car company as an opponent. Because at that time Japanese companies produced small-displacement cars, the Americans did not like to drive cars. But every time there is an oil crisis, Japan’s car share will exceed that of companies like GM, Ford, and Delphi.

I think there is a very close relationship between the size of the car and the price of oil. Everyone buys cars because the fuel economy of the cars is relatively better. Delphi is also working on the research of hybrid vehicles. Personally, I am very optimistic about the development of hybrid vehicles in the future automotive industry.

We are also very concerned about biofuels such as ethanol. Delphi has also been working on some research and development in biofuel technology. From the perspective of auto parts, we currently provide 250 parts of the world's auto parts for biofuels. In the future, the current situation of high oil prices may require us to pay more attention to cars, and we also need to focus more of our R&D efforts on the development of related technologies.

Gan Wenwei: I very much agree with the previous views. As a member of the automotive industry, we must face the current status of very high oil prices, we must also solve the problem that the car may affect the environment. However, I do not think there is a panacea that can solve all the problems we face. We may need different methods to meet the challenges we face. For example, in environmental protection, we must ensure that we can use the most advanced technology to improve the quality of fuel. It also improves engine management. Only in this way can the car's emissions be reduced. There are already many technologies used in our cars. What we have to do is to ensure that we continue to develop and update our technology in the future.

From GM, we will also introduce hybrid vehicles in China in the next few months. In addition, we also need to cooperate with relevant universities and academic institutions to use talents in this field in China to accelerate the speed of technological development. We also need the support and assistance of the government to help us to smoothly transition into the development and transformation of the next generation of cars, as well as support and assistance in technology and infrastructure.

How to treat large-displacement vehicles more popular in the Chinese market?

Tong Dongcheng: From the immediate situation, this oil price is still affordable. If we say that we will rise to 11 blocks or 12 blocks in the future, it will be in line with international standards. This is mainly to comment on the price of the entire world oil market. So whether this phenomenon constitutes a fatal blow to the development of the Chinese auto industry, I think it is still too early. Without a car, we have something else to replace. We will not return to the walking era.

I think the phenomenon you mentioned just now has something to do with the thinking of the Chinese people. However, I believe that in the case of rising oil prices, small-displacement vehicles still have the process of growth, development, and improvement as our consumers become more sensible. This trend will not change. The temporary phenomenon does not represent the future.

Xu Changming: The total child has said, I simply say that China's oil prices should not be said to be the cheapest in the world, but it is also very cheap. After the oil price rises in the future, large displacement cars will still be affected. In addition, from the perspective of demand, China does have a traditional culture. Big is good. As long as there is money, it is certainly a big house, a cart, and a large displacement. There should be some adjustments in policies to reduce the proportion of cars with large displacement and high fuel consumption. Although wealthy people will also buy, policy adjustments need to be made. Internationally, European cars are prevalent in Brazil, Brazil, South Africa, and Japan. The United States now dominates the world in large displacement vehicles.

If our country wants to make the auto industry sustainable development and realize a well-to-do society, we must let the people have a car. This is unquestionable, but it is definitely a big car that cannot bear it. We must make some adjustments in policy. We are also appealing that, in the study, it is recommended that the purchase surtax be adjusted. Japanese carts are not the same as carts. The minimum level of the car is 10,000 yen a year, and the largest is 70,000 yen.

I feel that it is necessary to adopt a comprehensive policy. It is time for it to be introduced.

Quan Chunze: I will compare China and India. India may lag behind China in the entire automotive market and automotive technology. Indians basically bought motorcycles when they didn’t have money at first. When they started to have money, they bought some cars. However, when we look at the Chinese auto market, when it has just begun to start and open, it was the cart that first started selling. Those wealthy people, as well as people from the government, are buying big carts. They didn't launch or valued them at first.

Now China's middle class also wants to buy a car. I also saw many employees in Delphi who were around 30-35 years old wanting to buy a car. These people also don't have much money. It is because they did not have much money, and when there were some problems with higher oil prices, even the cars did not want to buy them. For wealthy people, they can still buy a car regardless of how the price of oil goes up. However, I think that as time passes, China's middle class will still enter the tide of buying cars. On the whole, it may be like starting India to buy cheaper cars.

I have also been talking with Delphi colleagues in the United States. According to the situation seen from the Indian market, we are very concerned about the technology of small-displacement cars. At the time, there were $2,500 vehicles in India, and many people said it was impossible. From my observation, India basically made many changes in the entire car manufacturing process from beginning to end, including the supply chain also has many innovations. It is because of this complete set of changes that a very cheap car of $2,500 can be produced. Well, in the final analysis, this is a matter of time. As China's middle class becomes richer, they will also start buying some smaller cars. Probably this ratio, this amount will be more than the rich people buy a big car.

Gan Wenwei: First of all, there are more people in China starting to pay attention to the car, or to the engine of the small-displacement car. This phenomenon is not a new phenomenon. At present, 80% of the cars we sell in China are four-cylinder cars. I think this trend is beginning. As more and more private users purchase cars, they will pay more attention to things like price and fuel economy. However, with the rise of oil prices in the future, this trend will develop rapidly.

We can also see that for medium-sized or large-scale vehicles, technical solutions can be used, and it is not necessarily said that the cart must be very fuel-efficient. For consumers, he does not want everyone to have the same car, they also have personalized needs. In the future, there may be various solutions to achieve different fuel economy improvements for different models. It is not only the car that has fuel economy.

How can automotive companies fulfill their social responsibilities for energy conservation and environmental protection?

Tong Dongcheng: Dongfeng will definitely respond to the country's call first, and it is our responsibility to establish a resource-saving society. Dongfeng has its own advantages in the automotive industry. In fact, we used to be like this. Today is the case. I think we will continue to do so in the future. I give some data to show that we used to be like this. We invest in technology development, and 40% of the funds are spent on new energy and emission regulations. In our manufacturing investment, 30% of our funds are spent on resource conservation, improving resource utilization and environmental governance. What are the results we get from these two sets of data? In other words, till now, Dongfeng's products have been completely implemented in accordance with national emission regulations in the field of environmental protection, and we have sufficient technical reserves in the future for national IV emissions and national V emissions.

At the same time, our hybrid vehicles have been fully operational on five bus lines in Wuhan. In the field of electric vehicles, our research has been deep in the country. In the national "863" program, Dongfeng has undertaken a large number of tasks. Also, in the field of manufacturing, we should say that the annual funding for the use of new materials accounts for about 10% of the cost of technology development. Therefore, Dongfeng can responsibly say that in the past we did it, now we have done it, and in the future we will do better in this area.

Xu Changming: With regard to environmental protection and energy saving, I think that corporate social responsibility is a very important aspect. It must be done in this way and it must take on this responsibility. From the perspective of the development of the global automotive industry, the first century, the car has changed the world, the car has changed the layout of the city, we can live in urban villas. From 1996 onwards, it was an era in which the world's environment changed cars. I think the world is the same, and China is the same. China must continue to introduce standards in terms of safety, environmental protection, and energy conservation. In this case, companies will take the initiative to take responsibility. The government must also construct this standard as soon as possible.

Gan Wenwei: From the perspective of GM, we have several methods. First of all, we will cooperate with Chinese universities and related government departments to find out different sources of energy, or find solutions to different alternative energy sources.

Second, we will use a large amount of funds and resources for research and development in China so that the latest relevant technologies can be applied to the Chinese market faster.

Third, there are actually many technical solutions that are now mature, but may be more expensive for consumers. The next step, including the introduction of smart technology, we also hope to cooperate with the government to find the most appropriate solution, so that the entire conversion process can be more rapid.

If we can do a good job of the work just mentioned, and all of us work together and work together, the entire automotive industry will surely achieve sustainable development in the future, so that our next generation can enjoy more free and smooth traffic.

Quan Chunze: Delphi is a global leader in terms of technology, especially in terms of electronic systems, and can play an important role in environmental protection in the future. In addition, including the engine management, as well as exhaust emissions, electronic systems will play a big role. Delphi's engine control management system is also a global leader. Many companies are very interested in this technology and hope to use this technology to help their products, including their traditional engines are more environmentally friendly.

In addition, Delphi has a very strong technical field, that is, diesel engines. We have a diesel common rail supply system. If everyone is not familiar with it, there may be some misunderstandings about diesel engines. The diesel engine it implemented was not as bad as it was 30 to 40 years ago when compared to gasoline engines. In many cases, the exhaust of diesel engines is actually cleaner than gasoline. In the past, many people did not like it. They were reluctant to buy a diesel engine. They did not think it was very clean. They felt that the diesel engine's car was shaking more violently. But now when you compare diesel and gasoline engines, you will find that diesel engines are not inferior to gasoline engines in terms of vibration or emissions. In the European market, diesel engines account for more than 50% of the market.

When it comes to hybrid technology, Delphi has been researching and developing this field for more than 20 years. We now have very sophisticated hybrid engine technology that can be used in cars today, and we have provided Ford with a lot of this. technology. Including the field of biofuels, Delphi is also very concerned and can make a great contribution to environmental protection.