第一章 会议综述

Executive Summary
of Global Automotive Forum 2013
Global Automotive Forum Organizing Committee
October 28, 2013
 
 
With the theme of “The Future Development of the Automotive Industry - Target • Strategy • Implementation”, the 4th annual session of the Global Automotive Forum (GAF2013) came to a successful end on October 18, 2013 in Wuhan. In all, over 900 people from 20 countries and regions participated in the event with great enthusiasm. 82 distinguished speakers aired their views on different topics in 16 sessions, all of which are of great importance to the future of the automotive industry. Besides, the 2.5 days event also witnessed a closed-door meeting, 6 press conferences, 10 official meetings with the local government, a carefully prepared concert mixing the eastern and western music, and dozens of bilateral discussions and exchanges. 
 
GAF 2013 was co-sponsored by the CCPIT Automotive Committee and the People’s Government of Wuhan, participants included the representatives from the National Development and Reform Commission of China, the Ministry of Industry and Information Technology, Ministry of Commerce, the State Administration of Industry and Commerce, the State Administration of Quality Supervision, Inspection and Quarantine, China Machinery Industry Federation; government officials from US, Germany, UK, Republic of Korea, Brazil, Indonesia and Thailand; international big names such as Lord Neil Davidson, a Member of the House of Lords of UK, Gao Xiqing, Vice Chairman and General Manager of China Investment Corp., Alan Mulally, President and CEO of Ford Motor Company, Fumihiko Ike, Chairman and Representative Director of Honda Motor Co. Ltd., Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen AG,President & CEO Volkswagen Group China, Suk-geun OH, Executive Vice President of Hyundai Motor and Amedeo Felisa, CEO of Ferrari S.p.A., as well as the presidents, chairmen, general managers of 20 major Chinese automotive groups and businesses. Besides, economists, financial specialists, consultants, scholars and journalists were also there at the event to conduct face-to-face interactions with the auto industry and government agencies.
 
GAF2013 attracted the attention of media organizations both at home and abroad. In all, hundreds of journalists from 85 domestic and 24 foreign media organizations covered the forum on site, such as the New York Times, the Wall Street Journal, Forbes, Bloomberg, Reuters, Automotive News, Wards Auto, Autoline, AutoCar, Automobile Industry from Germany, Springer-Verlag, Le Journal de l'Automobile, Auto India, as well as the Xinhua News Agency, CCTV, Voice of China of China National Radio, China Daily, Phoenix Satellite Television. The TV production team from Blue Sky Production in US and the film production teams from Sirens of Chrome will conduct live recording and rebroadcasting of the event. China Central Television played an active part again as an “in association with” partner. Real time, all-dimensional and in-depth coverage by leading Chinese and foreign media and major websites have made the voices of the forum heard by people from different parts of the world, and thus aroused intensive responses among people from all walks of life. 
 
GAF2013 has attained new heights in terms of scale, composition of the participants, level of internationalization, and diversity of activities, especially in terms of the height, depth and breadth of the topics for discussion. Instead of serving only as a platform for multilateral exchange, GAF2013 has also been a platform for bilateral exchanges, with one-on-one meetings between auto enterprises, enterprise press conferences addressing the media, meetings between government officials and top level executives from enterprises. All these have proven that the GAF is an effective platform for all the stakeholders of the automotive industry. 
 
GAF2013 has received the continuous support from our partners/sponsors such as Deloitte, Bank of America Merrill Lynch, Continental, BMW, WISCO Tailored Blanks, Bridgestone, Bose, Iveco, Magna, Delphi, HCP, Red Bull, 5100 Mineral Water, etc., with such a good platform, we have established solid and long-term win-win relationship with our partners.
 
Thanks to the great support by the whole industry, the relevant municipalities and partners, Global Automotive Forum, after rapid growth and continuous improvement over the past 4 years, has been well established and acknowledged worldwide. The following are the details of the executive summary of the 2013 (the 4^th) Global Automotive Forum.
 
Session 1: Auto Dream, Chinese Dream -- GAF 2013 Open
 
The 4^th Annual Global Automotive Forum (GAF2013) was held on Oct. 17^th to 18^th, 2013 at the East Lake International Conference Center. More than 900 participants, including senior government officials, top executives from mainstream auto groups and leading industry experts from home and abroad, gathered to discuss key issues at the core of China’s automotive industry, provoke in-depth thought and broach constructive ideas for shaping the future of the automotive industry.
 
The theme for the GAF 2013 is “The Future Development of the Automotive Industry – Target · Strategy · Implementation” and panelists will have dialogue and discussions on topics including“Urbanization and the automotive industry”, “Opportunities and challenges outside China”, “Financing services for furthering the development of the automotive industry”, “Attracting, retaining and nurturing global talent” , “An insight into Chinese consumers” and etc. helping to introduce perspectives and insights into the global auto industry and the path for future development.
 
Mr. Wang Ruixiang, President of China Machinery Industry Federation, expressed that the automotive industry is an important symbol of social development and progress of science and technology. The annual production and sales in 2012 reached 19.27million units and 19.3 million units respectively, accounting for a quarter of the global automotive industry. By the end of last year, the number of cars owned increased to 120 million units, representing 10% of the total global volume.
 
He also said that while China’s automotive industry has made great strides, compared with developed countries in the world, there remains a big disparity due to the lack of domestic innovation and imperfect supply chain, especially in the technology of core components. Theses conflict between the market and other sectors including energy consumption pressure, resources consumption, traffic condition and environmental protection prevents us from building a strong industry with globally recognized brands.
 
Building a stronger country by developing core industries such as the automotive industry is part of the Chinese Dream, and is the driving force pushing forward the development of global automotive industry. The realization of the dream calls for entering into the foreign auto market, sharing global resources and cooperating with auto enterprises around the world.
 
According to Mr. Wang Xia, Chairman of CCPIT Automotive Committee, as a symbol of industrial civilization, the vehicle is changing our lives and society. Despite its difficulties the automotive industry has continued to grow and the volume of annual production is the highest in the world. New problems continue to raise such as issues on safety, energy consumption and environmental protection which are being addressed in all countries with an automotive industry, without exception.
 
He also said that although China's auto industry has become the enginefor development of the global automobile industry, the enormous challenges and problems should gain global attention. The solutions to these problems not only concern the development of China's automobile industry but also impact the global automobile industry.
Weshould not only place more efforts on product technology and marketing, but also remain concerned about the impact on the environment and our well beings. We must be active participants and plan ahead to avoid to heavy urbanization issues such as pollution.
Mr. Cheng Hong, Vice Editor-in-Chief of CCTV, commented that the Automotive Dream is a Chinese Dream. The auto industry is capital-intensive and technology-intensive industry, which means the scale of auto companies can easily be in the tens of billions yuan. The auto industry has made a great contribution to the growth of related industries promoting the rapid development of the state economy. China has become the largest producer of vehicles and globalization andurbanization have become the twin engines for China making the Auto Dream the high-speed Chinese Dream.
 
Mr. Ruan Chengfa, Vice Secretary of Hubei Provincial Party Committee and Secretary of Wuhan Municipal Party Committee, gave great affirmation to this year’s forum,”This forum gathers the global elite of auto industry and the discussions here will surely promote development and innovation in the industry. ”He also said, “Wuhan is a city with a dream for a strong auto industry. FromWuhan Zhongnan Automobile Factory’s being founded in 1960’s to the first car of Dongfeng Citroen factory coming out, more than half a century has passed and Wuhan has beena large part of the witnessed historical process of China’sauto industry growth, innovation and reform.”
Mr. Ruan Chengfa said we want to focus on the long term. Wuhan has a solid foundation and unique advantages to seize the opportunities within the global auto industryto realize the auto dream.”
Session 2: China’s Auto Industry
-       Defining its Future Role in China’s Economy and Global Auto Industry.
 
The Fourth Annual Global Automotive Forum was opened with the first topic: ‘China’s Auto Industry: Its Future Role in China’s Economy and the Global Auto Industry’ as the key issue that was brought to the attention of all delegates.
 
The brain storming session that occurred after the session involved both members of the panel and audience manners where both sections discussed issues relating to developing a new roadmap in term of business model innovation for China’s automotive industry.
 
It has been exactly sixty years since Chairman Mao sat down and wrote the logo for China’s first automotive manufacturer, the aptly named ‘First Automotive Works’.Since the inception of FAW and other automakers within China, the automotive industry has experienced a rapid transformation from being a zero car industry country to being a weak backwater market to developing into the biggest automotive market in the world, during this period, the ‘Automotive Dream’ to arose within China.
 
2013 To Be Marked in History
2013 marks the 60th anniversary for First Automotive Works as well as the Chinese automotive industry itself. This year will also see the 30^th anniversary of the first Santana sedan assembled by Shanghai Automobile Industry Corporation, the first joint venture passenger vehicle produced in China and also the creation of the first expressway in China. Over the past three decades China has shifted from the so called ‘Bicycle Kingdom’ into the ‘Auto Kingdom’ with lighting speed. China now ranks first in the world in terms of annual production and sales from 2009 to 2012 successively with the volume of vehicles reaching over 120 million units, becoming the second largest auto country in the world.
 
However, in 2013 the automobile industry is immersed in difficult issues due to the wide-range disclosure of product quality and safety risks which were aired during China’s annual ‘Consumer Day’ on March 15. Consumers were made aware of the long-existing problems in the automotive sector such as poor quality materials and engineering issues. Unfortunately, all the issues revealed were just the tip of the iceberg for domestic Chinese brands
 
Faced with new development guidelines from the Chinese government, no matter if it’s a joint venture enterprise or a domestic Chinese automotive company, both are tasked with the need to redesign their strategy and rethink the following questions:

• How to relocate and do business in the Chinese automotive market?
• What is the role of China in global automotive industry in the long run?
• What is the advantage and disadvantage of China within the global market?

 
Five senior executives from major automotive groups, including Mr. Zhu Fushou, the General Manager of Dongfeng Motor Corporation, Mr. Zeng Qinghong, Presidentof Guangzhou Automobile Group, Mr. Amedeo Felisa, CEO of Ferrari SpA, Mr. Zhou Langhui, Vice President of SAIC Motor Corporation and Mr. Fumihiko Ike, Chairman and Representative Director of Honda Motor Co., Ltd. exchanged ideas on the above topics and exchanged opinions with each other and the audience.
 
Mr. Zhu Fushou, participating in his third year at GAF, was quoted as saying, “China’s entry into the era of strategy and increased opportunity arouses our sense of mission and responsibility. Industry experts believe that the automotive industry will usher in a second ‘Golden Era’ of rapid growth, but I incline towards those who see the issue dialectically, actually, if we seize the opportunity, we can make it, otherwise, we are out.”
 
Three major issues are set to hinder China's automobile industry future path of development, these are:

1. The strategic stalemate between foreign brands and local brands will not change in the short term
2. The determination of Chinese enterprises to move towards the internationalization process is irreversible and the road is far from being smooth
3. Furthermore, the contradictions betweenrigid demand for cars market and sustainable development of energy, transportation, environmental concerns are high on the agenda for current social issues.

Mr. Zhu Fushou was to keen to emphasize, the correct handling of the above three kinds of issues are how we will handle the relationship between the domestic market and international markets. Among them, the domestic market is the central market, and the international market is a strategic choice, "Both of the two sides need to be focused on, but we must grasp them both.”
 
Mr. Zeng Qinghong, President of GAC Group, advised on his own self developed theory of “Three Accelerations and Four Leaps” on what Chinese automakers should do in the period of strategic opportunity. Mr. Zeng said companies should speed up their own independent innovation ability promotion,especially the key components and core technology breakthroughs. Secondly, companies should speed up the integration and reorganization. Thirdly, companies should accelerate the adjustment of economic structure, especially the industrial layout adjustment. While the 4 leaps include:Transformation and upgrading from pure manufacture to increased R&D, leaping from pure productionbase to industrial base, leaping from asset management to capital operation, leaping from product management to brand management.
 
In addition, Ferrari CEO Mr. Amedeo Felisa described the contributions having been made by him for constant innovation for vehicle structure and design; Shanghai Automotive Industry GroupVice President Mr. Zhou Langhui made a deeper analysis of what Chinese companies face and need to do to gain further breakthroughsin China's automotive industry, such as the contradiction betweenrapidgrowth of car ownership and insufficient infrastructure within cities, the higher customer demand forproduct safety, environmental protection, in-car intelligence and vehicle individualization, and the contradiction between cars and environmental concerns etc. Mr. Fumihiko Ike,Chairman and Representative Director of Honda Motor Co.Ltd., offered some suggestions on how to take a good advantage of better technology to promote the sustainable development of the global automotive industry.
 
Session 3: Helping Automotive Manufacturers Go Out
 
On the first day of the 2013 Global Automotive Forum, distinguished guests from government, financial institutions and various automotive-relatedenterprises from both within China and abroad gathered to discuss the current hot topics of overseas investmentandequity cooperation to look for a new path for the future automotive industry
 
Thirty years ago it is clear that there is a huge gap between the Chinese and international automotive companies in terms of concept, technology, management and product levels. China’sauto industry has pushed ahead with the introduction of overseas capital into the market which has helped China develop an international automotive market ranked first in terms of annual sales and production. Now, an increasing number ofChinese auto enterprises are looking to invest overseas and became the shareholders within multinational auto companies. The question on many CEOs and managers’minds is “to stay in China and strengthen the domestic market or go international and gain greater sales.”
 
Government: Support enterprises to ‘Go Out’
As the host of this seminar, Mr. Jack Perkowski, Founder and Chairman of JFP Holdings Ltd, shared with us several acquisition cases between SAIC and GM, Geely and Volvo, as well as Dongfeng and PSA, which put the Chinese auto company under the spotlight once more. There was no doubt that enterprises should pay close attention to market reactions and feedback, but they should also listen to government voices.
 
Mr. Chen Lin, the Commercial Counselor for Overseas Investment and Economic Cooperation Department of the Ministryof Commerce, was invited to share the policies on overseas investment; he was quoted as saying: “The Ministry of Commerce is happy to see enterprises invest overseas and will keep providing favorable support and strong service to those whowilling to establish multinational business, which is also a meaningful step to further open up to the outside world”
 
Moreover, Mr. Chen Lin proposed the principle guidelines that the government only considers capital security, impact on bilateral relations and a third party interest other than corporation concerns such as acquisition plan, investment fund, acquisition process and so on, which will undoubtedly create favorable external conditions for domestic firms to carry out overseas business activities.
 
Enterprises: Going out needs clear targets and strategies
Going abroad is an undeniable and important milestone in the development of China’sautomotive industry. Mr. Jack Hsin-Fa Wu, President of Dongfeng Yulong Motor Co., Ltd, expressed his opinion on how to obtain technology and platform needs with lower cost. He commented: “Auto companies heading into overseas markets have a clear target and strategy. Enterprises must sort out what the target and strategy is. No matter whether sales expansion mode or a resource gathering mode, all should be adapted to best suit the company’s needs and requirements from the global market.
Mr. Wu based his comments on his past experience of managing Chinese enterprises funds whilst undertaking ‘going out’ activities on their behalf. Mr. Wutook the microphone and acted as a doctor, prescribing three ‘medications’ in prescription form for the successful integration into global markets.
Mr. Wu’s first prescription is capital operation, because without capital it is difficult to operate and companies may find themselves backed into a corner. The second one is a talent exchange and integration. Harmonious consistent talent cooperation is the key to “goingout”.
Third one is strengthening the transparency of the enterprise. Only in a competitive environment can enterprises truly become strong.
The President of Asia Pacific of Lear Company, Mr. Jay Kunkel, also agreed: “Going out needs a clear target and strategy.” Mr. Kunkel went onto say: “First we need to carry out due diligence activities. Prior to any potential merger and acquisition, we need to do a full investigation to know as much as possible about the acquisition target. Post M&A, we need to plan for a better level of integration such as the technical integration into the mother company and also combining the two companies strategies into one.”
 
For FinancialInstitutions ”Going out” has become a big trend.
Compared with thegovernment and enterprises, financialinstitutions seem to have greater interest in the funds of Chinese enterprises “going out” to assist in corporate mergers and acquisitions. They are also more optimistic about it.
Ellis B. Chu, Director , Head of China M&A of Bank of America Merrill Lynch, USA, made a meticulous observation on China automobile’s “Going Out” making mergers and acquisitions. He was quoted as saying: “From 2006, 2007, Chinese enterprises going out become a big trend.They gradually did not want to cooperate with foreign enterprises only in China or just develop their market in China. They hoped to develop their sales market all around the world. This trend has become more and more passionate over the past few years.”
He followed up his remarks by saying: “In the early stages of cooperation between Chinese and Western automotive enterprises, both parties felt very suited to each other, then they entered into a period of share swapping developing even closerties.” This is mainly because Chinese enterprises wanted to verify their own value and prove they are the market leader in China. It shows that the internationalization of Chinese Enterprises is still ongoing and their aspirations to enter the globalfinancial system that funds of Chinese enterprises going out givesglobal markets a signal, eventually it will be more helpful for Chinese enterprises to list in not only IPO but also on different global exchanges.”
Session 4: Urbanizationboosts the sustainable development of the automobile
Economists have already predicted the most important two events for human beings in the near future: one is the rapid urbanization within China; the other is a period of high-tech development in the United States. This is enough to prove that the urbanization is important for China's future development, but at the same time, the urbanization process comes with a series ofcomplex social process, which has brought new opportunities as well as challenges for the automobile industry.
As both members of society and the automotive world, several questions are at the forefront of our daily lives: How do we avoid a repeat of the age-oldurban diseases that have appeared elsewhere in the world? How to deal with harmonious development as mandated by the government, as well as meeting the requirements as set by industry and society? How to seek the most effective methods of sustainable development and how can the automotive industry survive in such an environment
 
Tackling such questions is the main task of this year’s 2013 Global Automotive Forum session entitled: "Urbanization and the automotive industry: Sustainable development " thematic discussion in the morning of September 17^th.
 
Mr. Li Zuoqing，Vice Secretary-General, City of Wuhan, Mr. Ren Yong, Vice President of Dongfeng Motor Co., Ltd. (DFL) and Deputy Managing Director of Dongfeng Nissan, Mr. Wang Ning, General Manager of Iveco China Operation, Mr. James (Jim) Thomas, Mayor of Hinesville, Georgia of USA, Prof. Peter Wells, Professor of Automobility at Cardiff Business School, UK and Mr. Ashvin Chotai, Managing Director, Intelligence Automotive Asia , UK had in-depth discussions from multiple perspectivesand exchangedopinions and views on sustainable development of cities and the automotive industry.
 
Urbanization brings a 40 million auto market
Mr. Li Zuoqing remarked that: "The process of urbanization is an important goal for China's economic and social development. It is also an important driving force in stimulating domestic demand. The urbanization of the automobile industry, especially the automobile industry of China has great vitality and broad prospects for development."
He analyzed: “Thefuture automobile market in China alone is hoping to achieve an annual output of 40 million units per year is not boasting, in fact it is relative to the population of 1.3 billion and 120 million units of car ownership. There is no doubt that it will provide a huge market for auto industry with the constant improvement of China's urbanization and rural infrastructure.
 
Mr. Ren Yong made an accurate analysis regarding the market potential. “Although the speed of growth of suburban market is faster than that of tie-1 cities, the number of cars owned is still small. Compared to those saturated markets in certain cities where thenumber of cars owned by per thousand people stays between 50 and 70, although that has exceeded 100 in Beijing, the suburban market is a promising market with great future potential.
 
All the attendees are happy about the growth rates in urban auto markets, at the same time, automotive brands should make a better plan to adapt to the transition and development of the future automotive industry.
 
Mayor James Thomas remarked that economic growth is only a small part of the societal development driven by the automotive industry. Rational planning of the auto industry will become the driving force for the human society as a whole. Mayor Thomas was quoted as saying “We should guarantee all the positive factors, such as good infrastructure for the future development of automotive industry
 
Urbanization is becoming a major trend for the future auto market, hence the need for long-term policies that last for 50 years or longer. These policies should be carefully formulated and have strict inspection procedures to ensure that the policies are properly implemented at all levels.
 
According to Mr. Ashvin Chotai, the ratio of urbanization will run up to 25 percent and the number of urban citizens will reach 800 million, which means 85 percent of the car industry growth comes from the small and medium-sized cities, whilst only 15 percent of the increase came from the big cities in the next decade.
Session 5: Vision for 2030: The popularity ofunmanned cars will be no longer a dream
On October 17th, a session was held to discuss the advancement of in car technology under the title of “Future of cars and the auto industry: Vision for 2030”. Delegates from world famous automotive suppliers such as Bosch, Continental, Delphi, Magna and Pinnacle engine business representatives gathered together to forecast the future development trends within the automotive industry.

With the development of Google’s autonomous vehicle resulted in globalattention,this technology has attracted great attention in the automotive industry, especially as Google is a software company rather than hardware or even an automotive focused company.
When talking over the possibilities for automotive technology in 2030, all the participants mentioned the unmanned vehicle. Mr. Chen Yu Dong, the President of Bosch China Investment Co. Ltd was quoted as saying: “Unmanned vehicles are a new but rapidly growing development trend for the future. Currently more than 90% of road traffic incidents were caused bydriver error. The ultimate goal of car safety is autonomous driving and to eliminate human intervention.”
“We can be sure that the cars in 2030 are currently unimaginable.Existing technology can at least allow us to dream of realizing the automation of driving before 2030.In the future we can play games when driving cars, which will be very safe.” said by Dr .Ralf Cramer, Member of the Executive Board of Continental AG, President and CEO of Continental China.
In order to realize autonomousdriving dreams andgreater safety performance, major parts suppliers are stepping up the research and development work. "Bosch has received the German government’s approval for an unmanned test. We’ll continue to develop new products. Some technologies and trends fromthis process will provide more convenience for safe driving, for example products avoiding collision and pedestrian injury will be used in more models."Mr. Chen Yudong said. Dr .Ralf Cramer revealed that thousands of personnel at Continental China are dedicated to the research of safe driving support systems, with these systems eventually forming the important foundation for future unmanned driving vehicles.
Mr. Frank O’Brien, the Executive Vice President for Asia at Magna International Inc. was quoted as saying: “What makes the automotive industry worried is that unmanned driving technology not only involves the development of security technology but also is related to the government legal norms. If legal improvement is not synchronous, the application ofunmanned driving technology will be affected.” Technology is developing very fast, but the regulations are slow, which makes technology limited. I believe we will realize unmanned driving in few years, but willit be allowed by the government?”“What kind of automation will be allowed by government? This is a problem.”
Mr. Jeffrey J. Owens, the Chief Technology Officer & Executive Vice president of Delphli, said: “The trend of future development isautomation. In three US states, including Nevada, self driving car testregulations have been passed. Recently, Europeangovernments have also begun to allow automatic driving vehicle testing on expressway.” The active support of the government is especially helpful in accelerating the application of unmanned technology with eventual roll out into mass market vehicles.
 
Electrification and connectivity will become an important trend of future vehicle development besides automation. ”There is a long way before we realize the ultimate goal. In my opinion, the proportion of electric cars sold every year will grow bigger by 2013 despite small number at present. Once the crucial technology barrier of increasing the battery density is conquered, less and lighter battery can be produced and mass production can be realized.” said Mr. Chen Yudong.
 
“Power system is the field where big changes will happen in the future. We believe that including electric cars, bio fuel, and fuel cell, all of these will realize the optimization.”Mr. Frank O' Brien said.
 
“Speaking of new energy cars, situations are diversified in different countries. In Germany, many institutions are carrying out research into new energy vehicles. This work is a big challenge and calls for lots of engineers.I know little about China, but I think big cities, such as Beijing and Shanghai can be pilot markets to popularize electric cars.” said Dr .Ralf Cramer.
 
Automotive connectivity technology should be applied in wider range to produce autonomousvehicles to guarantee higher levels of safety. Mr. Jeffrey J. Owens remarked that with the development of electronic technology, the method of information processing can be improved. Better information managing technology will be applied to back up the system possibly comprised of 200 computers with remote information processing technology which will be used between cars and infrastructure by 2030 allowing for reduced accidents and eventually a lower death rate on the roads.
 
Session 6: Grasp the opportunity and cooperate to win-win
——value-added service ushers in automotive aftermarket
 
In 1985, 77 percent of automotive dealers profit came from new car sales; by 1991, this number had dropped to 25 percent over 6 years from 1985.
The enterprises that concentrate on one service will be in face of only one problem which is its fantastic amazing profits.
                      —— Henry Ford, Funder of Ford Motor Company
Faced with a growth numberof car ownership, profits from new vehicle sales have obviously become thinner. Faced with big pressure to find a way out and relieving stress, auto dealers are transferring their thoughts into the aftermarket.
Presided over by the iautos network CEO, Ms. Ma Xiaowei, the GAF2013’s brainstorming session for the automotive aftermarket was held in the afternoon on October 17th.
Mr. Pang Qinghua, Chairman and General Manager, Pang Da Automobile Trade Co.,Ltd., Mr. Joseph Vitale Jr, Global Automotive Sector Leader, Deloittee Touche Tohmatsu Limited., Mr. Daesung Yoon, Executive Managing Director, Korea Automobile Importers & Distributors Association (KAIDA)and Mr. Patrick Katenkamp, Global COO of Incadea described their plan and cognition for the automotive aftermarket from different perspectives.
Automobile dealers are the connectionlink between automobile enterprises and consumers. Customer service doesn’t only start from the distributors; it is also put into practice by dealers. Mr. Pang Qinghua said: “After ten years extreme growth, dealers are now at a crossroads. To survive dealers have to face a stark reality. They should be motivated to innovate their current service levels and auto makers should strengthen their brands.
As distributors, we should have motivation to make a brand of customer service. That is to say we should sell the cars and customer service separately when approaching customers at the same time, which is an outstanding feature of the market nowadays.  Pang Da Group has researched its own eight value-added services since last year. These eight services include: strong accessories range, light- maintenance schedules, second-hand vehicles, roadside assistance, warranty and so on.
After-sales service has become the vital part of the value chain for cars sales with the dealer’s gradual growth from the innovation of service brand to independent innovation of value-added services. For the dealers the essence of the automotive aftermarket is realizing value-added service. Dealers should no longer depend on the rebate from manufacturers to boost profits; they can maximize profits based on their own service offerings.
Mr. Joseph Vitale Jr introduced the concept that only the service industry has limitless profit space in the automotive industry, especially as new cars already have low profit margins. In the most important research on experiences of being served, a 1 percent increase in the more than expected experience will promote buying desire by 37 percent. That is why 76 percent companies express that the key point of car sales profits is still the service.
Thesis 1: win-win cooperation
Both automobile distributors and makers should pay close attention to the automotive aftermarket. Mr. Daesung Yoon, Executive Managing Director of Korea Automobile Importers & Distributors Association (KAIDA), sharedhis understanding of Korean and Chinese automotive aftermarket with the participants.
The automotive aftermarket is playing a more and more important role within the automotive industry, mostly attributed to its strong profit ability. Meanwhile, lots of auto brands are shifting their focus to the aftermarket, which also affects the sales volume and structure of the automotive market to some extent.
The automotive aftermarket is undergoing an important historic period where both challenges and opportunities coexist. Mr. Daesung Yoon took the Korean auto market as an example to describe the features of advanced automotive aftermarket. He remarked that the Korean automotive aftermarket is based on OEM orders rather than the dealer and is more diversified. Secondly, owing to the rapid replacement of vehicles, consumers prefer new cars to second-hand vehicles, which makes for a comparatively small second-hand vehicle market. Finally, market demand for IT products is an expanding attribute to the development of information markets which is the new trend for the aftermarket. In a word, service and products should be market-oriented and meeting the requirements of younger consumers so as to make them better understand the automotive industry.
Thesis 2: Seizing Opportunities
Ecommerce is gradually changing consumer’s consumption habits and way of life. Mr. Patrick Katenkamp cited an example to explain how IT influences the development of the automotive industry. According to a study into sales channels choice, consumers generally spend lots of their time on the internet to collectinformation about their prospective buys but only a few minutes in the showroom. We found that online content has doubled year after year, which has urged us to make good use of IT software, and create more information in a bid to better manage customer relationship, optimize enterprise resources and protect intellectual property.
Ecommerce is changing the traditional marketing channel as well as people’s consumption habits and concepts via its proprietary edge. As part of services, Ecommerce is playing a more and more important role in the automotive aftermarket.
Session 7: Overseas Competition Makes China a Powerful Force in the Automotive Industry
Chinese enterprises need to integrate global resources to become globally strong.
In 2009 China became the world's largest vehicle consumption market; however, the influence that Chinese enterprise have on the global market is still extremely weak due to the small volume of exports from China. It has therefore become strategically important and imminent for Chinese automotive manufacturers to clear the obstacles and participate head to head in the global market.
Key questions needed to be asked before a road map can be developed and put into action: In which areas do Chinese companies have a sustainable global competitive advantage? What’s the new mode and strategy for Chinese auto enterprises when entering global markets? How to build up risk management mechanisms? The questions above regarding overseas competition request solutions from industrial elites attending the 2013 Global Automotive Forum. Judging from the development trend of Chinese automotive enterprises and global economy, being cautiously optimistic has become the common attitude towards global market raised by the participants at this year’s Global Automotive Forum.
 A session entitled: “Chinese automotive companies: Opportunities and challenges outside China” was held in the afternoon on Oct. 17^th. Mr. Miu Xuezhong, Vice Chairman and General Manager of GAC GONOW,Mr. Wang Dazong, Chairman of Phoenix Capital Management Inc.and Chairman of US China Automotive Exchange, Ms. Lori Blaker, President and CEO of TTi Global and Mr. Bill Russo, Founder and President of Synergistics Limited and a Senior Advisor with Booz & Companycame together to discuss the issues on overseas competition.
“Going out” is the mission of Chinese enterprises.
The consensus has become that participating in overseas competition is the necessary path for Chinese automotive manufacturers that are undergoing the transition from a ‘car country’ to an ‘automotive leader’
“This should be our mission” said by Mr. Miu Xuezhong, Vice Chairman and General Manager of GAC GONOW, a Chinese domestic brand. It is undeniable that China has become the largest vehicle producer. However, there is a long way beyond powerful nation.
The ratio of automotive exports is a critical indicator for judging a country’s automotive industry. Developed countries including European countries, America, Japan and Korea, have an export proportion ranging from 50% to 80%. Even Brazil, for example, exports 20% of its total automotive produce, India exports 13%. China’s automotive exports breached 1 million for the first time in 2012, accounting for just 5% of total sales that year.
Mr. Wang Dazong explained the necessity of going abroad from another dimension and put forward his thoughts that it has been 13 years since the “going out” strategy was raised by the central government. According to the statistics released by the Ministry of Commerce, overseas investment has reached 90 billion dollars. However, as the second largest economy, our accumulated investment is comparatively small accounting for only 2.2% of the total foreign investment. Judging from the overall investment, we are still at the primary stage of internationalization as well as lack of successful investment cases.
Mr. Bill Russo remarked that the automotive industry is too fragmented in China, when compared to the U.S market, which is comparatively concentrated in a “Motor City”. There are also a lot of self-styled “Motor Cities” within China which are actually the manufacturing bases, located in different cities and counties all over the nation, further fragmenting the automotive industry into tiny pieces. Furthermore, internal competition between Chinese self-developed brands is very fierce and the competitive level should be upgraded.
 The integration of global resources
“As a brand with only decades’ history, we should apply a competitive differentiation strategy in competing with global brands with hundreds years history.”Mr. Miu Xuezhong went on to express that self-developed brand ought to undertake the mission of building a powerful nation by improving the automotive industry. Secondly, persistence is required during the procedure entering into overseas markets. We should never withdraw easily and gain valuable experience from the barriers that are put before us. Lastly, we should also use a clear strategy and exploit markets of developing countries before entering into some developed countries to gain experience and understanding.
Mr. Wang Dazong expressed his opinions in common that before going out, enterprises should have a clear understanding of what they hope to achieve along with their aims. Secondly, comprehensive management mechanisms should be established and local talent should be recruited to improve the localization regardless of skin color or nationality. Thirdly, make good use of overseas talents, which are the most valuable human resources especially when it comes to understanding the demand and requirements in your local market. Finally, cooperating with a solid partner in the intended market is critical for succeeding no matter where you are in the world.
Mr. Bill Russo also commented that automakers ought to spare no effort to improve their product quality; he went on to express that auto manufacturers should be clear with their brand value and positioning. Most of the automakers are unhappy to find low price as the only unique selling point of their product when compared with other brands. Chinese automakers are actually struggling in the brand positioning without knowing the true value of their product and how to attract consumers through branding efforts.
Actually, the Chinese brands are doing good job in recent years on the down side; however, foreign automotive brands are doing even better, attracting more consumers from native auto brands and putting up great hurdles for Chinese automotive brands. Therefore, self-developed brand should gain a foothold at domestic market at first, and then compete overseas.
Ms.Lori Blaker commented that the training course carried out by his company is an important program to cultivate leaders for Chinese enterprises to enter certain markets, such as the mid-east. Service can be optimized and standardized afterwards, which is bound to improve the product capacity and quality as well as serve the local consumers.
Session 8: Financial Innovation: Financing services for furthering the development of the automotive industry 

Experts from the financial sector shared the meaning of cross industry integration for traditional automotive industry together in the GAF2013’s sub forum，“Financial Innovation: Financing services for furthering the development of the automotive industry”. Dr. Patrick P. Steinemann, Managing Director, Co-Head Asia Industrial Investment Banking of Bank of America Merrill Lynch moderated the plenary session.
The automotive industry hasalways been a capital and technology intensive industry .Funds of course play a key role in supporting both enterprise investment and consumption demand.
Over the course of the past decade, the investment boom was supported by state-owned banks providing loans to local government and state-owned enterprises, which contrasts against overseas capital which has gone to wholly owned foreign operations within China. It will be the trend in the future that automotive industry seeks financial support through highly mature automobile finance organizations
Lord Davidson,Opposition Spokesman in Respect of HM Treasury (Ministry of Finance) Matters in the House of Lords as well as Shadow Advocate Generalin the United Kingdom said: “With new ideas coming to the traditional auto industry from the development of the IT industry, it is expected that we will have autonomous cars in the future. Previouslythe automotive industry maintained a gradualdevelopment model, now it begins to step into the stage of development by leaps and bounds with the introduction of new technologies from other industries.”
Compared with China, the UK’s domestic market is not big, but the UK is a leader in the development and innovation of technology as well as boasting an advanced financial field, which itself has considerable significance for the China’sautomobile industry.
The CEO of VW China Financing Company, Mr. Joern Kurzrock , on his Chinese "practical experience"made a detailed account of the rapid development of the Chinese domestic automotive financial market and sustainable growthof 30% to 40% for several years with a variety of financial products for consumers.
The Chairman of JFP Holdings, Mr. Jack Perkowskirecalled his previous work experience at the Wall Street during the 1970’s and 1980’s: “In the early90's of China the finance markets gradually opened and Shanghai and Shenzhen stock markets were established. Four major state-owned banks began to increase lending to small and medium enterprises. The car industry had a high demand for capital, which gave rise to the rapid development of automotive industry and an increase in new products research.”
“As a consumption product with long life cycle, the automobile is in need of financial service in different aspects including dealer financing, consumer credit, second-hand cars, auto insurance and so on.” Said Mr. Albert Zsolt Farkas, the General Manager of JAC Credit.
 
Mr. Rock Shi, Executive Director and Member of Investment Committee，Bohai Industrial Investment Fund Management Co., Ltd., was quoted as saying, “The Chinese automotive market possesses unique characteristics when compared with other worldwide markets. Two years ago, many investors were not optimistic about the China’s automotive industry at the Dubai Investment Summit, believing that China’s automotive industry will maintain a relatively low growth rate over the next 5 to 10 years. However, the market boom unbelievably attributed to its complicated and changeable economic environment. To understand the China’s auto market, you need to localize and implement a strong financial business plan.
 
The panel guests reached consensus on several issues as follows: The appreciation of RMB will in increase the pace for Chinese enterprises to participate in overseas investment; auto financial market within China possesses a huge potential market that is yet to be fully opened, the change of consumption culture will help to boost the auto financial market. International venture capital and private equity companies, who are optimistic about the Chinese market, are likely to enter the domestic market that long for capital and profit. The state-owned banks and commercial banks are the main force in the automotive finance sector at present. However, an auto finance based on enterprises and distributors is bound to be established in the near future.
 
Session 9: Methods for Chinese domestic brands to brighten their future
 
The 60 year’ of development of China’s automotive industry is a implementation of building a powerful nation by Chinese self-developed brand
 
The revolution has not yet succeeded. Work hard, comrades!
Sun Yat-Sen
 
With the maturation of self-developed brands and the expansion of business scale, competition has grown fierce in the domestic Chinese automotive market. Problems exist in several fields for Chinese automakers in terms of R&D, branding, service levels, market position and strategy. Enhancing competitiveness is of great importance not only for the survival and development of Chinese auto brands, but also for the operation of the national economy.
 
The plenary roundtable of the 2013 Global Automotive Forum was held in the morning of October 18th was hosted by Mr. Li Jie, Vice Director of Marketing Management Department of First Automobile Works. Panelists including Mr. Wang Xigao, Chairman of JMC Group, Mr. Guo Qian, Chairman and CEO of Qoros Auto Co., Ltd, Mr. Yuan Hongming, General Manager and Deputy Secretary of the Party Committee of Shaanxi Automobile Holding Group and Mr. Xu Sitao, Chief Representative of Economist Group China, exchanged ideas regarding Chinese self-developed brands and brought forward constructive suggestions from both the panel and the audience.
 
China has become the largest automobile producer and consumer in the world after 10- year explosive growth with the total production and sales likely reaching over 20 million units.
 
Self-developed brands continue to be in a weak position as whole, foreign brands began turning to the third and fourth-tier and continue to bring in increasingly cheaper products which is directly threatening the survival of self-developed brands. Panelists delivered suggestions on how to stem the flow and hopefully reverse the process of falling market share.
 
Self-development and cooperation
Speaker: Mr. Wang Xigao, Chairman of JMC Group Enterprises can absorb advanced technology introduced from developed countries via diversified methods, such as imitation and improvement, cultivating the ability of self-development and innovation. Attention should be paid to the critical step of improvement rather than imitation through copying, so as to find out a development way suitable for both the home market and international market. Mr. Wang Xigao took the JMC Group’s history to describe the difficulties the company once experienced but eventually overcame. JMC Group started from tiny workshop and developed into a giant enterprise with 3000 researchers and designers experienced a strenuous growth pattern which saw it move from being an imitator and then becoming an independent car company with a product range of solid, self-designed vehicles.
 
Recruiting an international team
Speaker: Mr. Guo Qian, Chairman and CEO of Qoros Auto Co., Ltd
The Chinese automotive industry is far beyond internationalization according to Mr. Guo Qian, who pointed out the way to narrow the gap between Chinese and global auto industry to achieve the goal of internationalization. He went on to express that the China’s automotive industry has to undergo four steps. The first step is to master a core technology, for example body assembling and transmission development. The second step is to establish integration mechanisms. The third step is to transfer the technologies into the platform. The forth step is to build up brand recognition. As for Qoros Auto, they continually move to recruit an international team comprised by industrial elites and accomplish the goal of internationalization directly. Mr. Guo Qian commented that their Qoros brand vehicle passed the E-NCAP with stricter regulation received a five stars result, ranking first.
 
Existence Rationality
Compared to passenger vehicle, commercial vehicles have left the Chinese market and are actively competing with global brands head to head in various international markets such as Africa, the Middle East, and Central Asia etc. Whilst passenger cars are purely individual consumption, commercial vehicles create value for the buyers through their daily work; they add value to the company.
 
That explains what Mr. Yuan Hongming stressed that it is reasonable for heavy trucks to gain market share in international markets whilst China’s passenger cars lag far behind. The free market is the sole criterion for testing the claims of manufacturers. It is interesting to note that passenger cars are stuck behind all foreign brands yet Chinese commercial vehicle are performing well in overseas markets.
 
New energy and the introduction of smart cars are significantly important for the commercial vehicle market. ‘Smart’ heavy truck differs from passenger cars by focus on the procedure of autonomous cars and meeting the requirement of customers, which also develop the whole vehicle assembling sector and component sector. Commercial vehicles are produced by solely by order, which makes for a smaller enterprise scale when compared with the passenger car market. Mr. Yuan called for uniting and reducing internal friction among commercial vehicle producers which would lead to a greater market.
 
Within the current economic environment, investment accounts for half of Chinese GDP.
Speaker: Mr. Xu Sitao，chief representative of Economist Group China
 
To realize China’s automotive dream, we ultimately need to rely upon the development of the Chinese Dream. In the trend of future economy, independent brands should “deleverage” if they want to be internationalized. Four thousand billion does promote the economy of China in a short term but bringing negative effects in the long term. Investment accounts for 35% to 40% of the Korean GDP. Only deleveraging can solve the problem which is how China makes investment account for 35% to 40% from 50% in 5 to 10 years.
 
In 2013, development of the economy mainly depended on investment. At the APCE meeting Chairman Xi Jinping declared that GDP is not everything for China. China should realize 5% to 6% growth of mid-term economy rather than the blind pursuit of GDP or it will lead to the financial crisis which affected South Korea and other ‘Asian Tiger Countries’ in 1997.
 
Although a coincident solution on improving self-developed brands has not been concluded, panelists reached an agreement that enterprises ought to overcome difficulties themselves by self-development, joint venture activities, introducing global talent and further research, and also increasing their competitiveness in the aftermarket.
 
Session 10: Breakthrough and Innovation - Promoting the new energy automobile development scheme
 
On October 18th, 2013, in a session entitled: "New energy vehicles: Accelerating progress ", experts from the new energy field shared ideas such as technology routes, future prospects and challenges on the road ahead.
 
China has firmly put into practice the strategy of new energy automobile so as to alleviate the pressure on already tight energy supplies and environment concerns, as well as promoting the transformation and upgrading of the automobile industry and cultivating a new economic growth point. Recently, however, a new range of issues has arisen that has made the auto industry, related enterprises and relevant departments confused on the future development of new energy automobiles. It is extremely urgent to break the deadlock and find a suitable way forward.
 
Mr. Paul Ingrassia, Pulitzer Prize winner and Managing Editorof Reuters, made a comprehensive comparison between the Toyota Prius and the Nissan Leaf, as well as Tesla’s electric vehicle from his own perspective and experience: “New energy automobiles can solve the contradiction between human traffic and energy and it has strong prospects for future development." Mr. Paul Ingrassia said.
 
Ms. Alysha Webb, the President of Alysha Webb Production, introduced the development of electric vehicles in California, USA, which has so far seen the introduction of new energy vehicles from major automotive manufactures including Toyota, Nissan, Honda, GM, Ford and other transnational automobile giants. “At present, America has built 6,800 charging stations, with new energy automobile accounting for 1% in the market, meanwhile the sales and registration quantity are also rising." Ms. Alysha Webb said.
 
According to Ms. Alysha Webb, California is strict regards to energy saving and environmental protection in the United States. It makes mandatory requirements on zero emission at the corresponding time point through legislation, "From the construction of charging infrastructure, battery recycling regulations to new energy vehicle subsidy, the government of California actively promotes the development of new energy automobiles through various acts and regulations."Ms. Alysha Webb said.
 
The development of new energy automobiles in the United States has also encountered many problems and shortcomings, for example: the public expressed greater concern about part of the California's companies’ reliance on governmental financial support; people have expressed doubt on whether the new energy automobile enterprises can continue on their path of sustainable development; and some have expressed dissatisfaction with the slow pace of construction of the required support infrastructure.
 
Dr. Charles Kung, Vice General Manager of Coretronic Corporation, Taiwan, analyzed that incomplete infrastructure, high-price products and range anxiety are the three most concentrated problems in hindering the development of new energy automobiles in the market. “We can start from the system scheme to solve these problems, encourage and attempt various new energy solutions.” said by Dr. Charles Kung.
 
In the view of Dr. Charles Kung, the Chinese government has made many beneficial attempts and initiatives to promote new energy automobiles, such as the Project of "Ten Cities – Thousand Vehicles". “This policy has brought great inspiration to Taiwan, and Taiwan is also considering introducing some policies such as encouraging increased use of public vehicles as new energy resources.” Dr. Charles Kung said. "In addition, in Europe and Japan, the super light weight automobiles are beginning to gain traction. Low-speed electric tricycles have been accepted by consumers in the markets in Shandong, Henan and other provinces in China. We can also consider introducing the ultra lightweight car to China.”
 
Promoting the new energy automobile is a tedious, progressive and collaborative task. Many guests participating in the parallel session generally recognized that the government's policy support, enterprises’ diversification strategy choice, commercialization of infrastructure and consumers' increasing environmental protection concepts are indispensable elements, which altogether support the future development of the new energy automobiles.
 
Session 11: Consuming Diversification VS. New Marketing Plan
 
In today’s Chinese automotive market, the most rapidly changing aspect is that consumers have more and more power to effect the direction of the development of automobile industry as a whole. The product development strategy and marketing philosophy is now extremely consumer-centric, which will led to the success or failure of automobile companies in the Chinese market. So, how can manufacturers move to understand the Chinese consumers and innovate entirely for them?
 
On October 18th 2013, a plenary session with the title of “An insight into Chinese consumers” was held at the 2013 Global Automotive with the goal of helping others to understand Chinese consumption philosophy and consumer behaviors.
 
Currently, the consumer trend within the China’s automobile industry is extremely clear; the consumer is willing to pay more money for an unique product. Whilst Chinese auto market development has been slower than more advanced nations, from 2008 onwards, the sales increase within the Chinese luxury car and SUV segment is more than the whole automotive market, with an annual growth rate reaching 32% and 70% respectively. From this we can see that China has already become the distribution center of luxury automotive brands.
 
Luxury automotive companies from all over the world are working hard to improve their market share in the Chinese market. Chinese consumers have become increasingly savvy with their car purchases and will choose product from different brands according to their own special demands. With this in mind, from product development to marking plans, what kind of strategy should be put into place to capture Chinese market share based on rapidly changing of consumer requirements?
 
Dr. Daniel Kirchert, Managing Directorof Infiniti China, thought that there were many opportunities remaining in the Chinese automotive market as the competition patterns have not yet settled down, after all who knows what a consumer will demand tomorrow, or the day after. In the luxury automobile field, Dr. Kirchert emphasized four key points regarding today’s Chinese luxury consumer: 1. Younger consumers; 2. Personality focused; 3. Luxury oriented; 4. Globalized mindset. According to the above four points, Dr. Kirchert suggested that manufacturers should focus on the following areas in their product management and marketing: personality, innovation, brightness, inter-connection if they are to succeed.
 
Previously it was seen that Chinese consumers opted for just the basic life necessities, but now people consume for different reasons and aims. Younger consumers have more diversified demands, so how can we maximize and explore consumer potential? Vice General Manager Mr. Wei Wenqing from DPCA believed that precision and regionalization are becoming the key words at present in marketing fields.
 
At first, the age structure of consumers has changed considerably, with more and younger consumers taking the reins whilst third-tier cities have also increasingly become the main market. Second time purchases are also increasingly rapid, and have already occupied roughly 25 percent of all sales. Mr. Wei indicated that with this change marketing people will have to move their strategies from targeting first time buyers to second time buyers who are increasingly younger and increasingly savvy towards their purchases.
 
Another expert forecasted that the Chinese market is more and more important, and it will replace America to be the biggest global economic entity within the next decade. At that time, Chinese automotive consumers will have an increasingly higher education level, a greater income, more high pressure etc. smarter consumers will not just follow international brands, and this give the local brands a greater chance.
 
Vice President of BAIC, Mr. Liang Guofeng emphasized that domestic brand automobiles, no matter what kind of change happened in the market, the first thing is doing our job well; making cars, with every process to make sure that every model is engrained with high quality standards. This is our basic requirement in the era of new media time and rapidly changing consumer trends where opinions and news travel faster than ever before.
 
Chinese consumers are now pursuing vehicles that will boost their self-enjoyment, convenience and certain uniqueness in their vehicle choice. Manufacturers should move to focus on these new consumer traits and act upon them accordingly with speed.
 
A popular saying in 2013 is that the purchaser needs only spend six seconds when deciding on a brand, after that they will look for an alternative. It is because consumers have too much choice when they choose a product and have less time, so a non-planed purchase will happen. With this situation, the marketing plans of automotive companies should be more precise. Therefore, Autohome CEO, Mr. James Qin believed that in an age of new media, manufacturers should move to base their marketing plans on current data whilst developing new marketing strategies to improve old strategies and develop new marketing modes to bring to automobile companies the change and challenge that is required by consumers.
 
Session 12: Cultivating Global Talents
In the 21st century the resource that companies lack the most is talent. At the 2013 Global Automotive Forum, industry experts on the talent issue came together in Wuhan to discuss the greatest issue companies facing in 2013.
Mr. Zhou Liang, Board Director and General Manager of Nanjing Iveco Automobile Company Limited, Mr. Jay Kunkel, President of Asia Pacific Region for Lear Co., Ms. Mary Thornton, Director of Human Resources for General Motors China and Ms. Vanessa Moriel, MD Asia & Founder, Human Capital Partners (HCP) came together to discuss the topic on how to attract, recruit, train and retain talent within their own companies.
What is the definition of international talent? Mr. Zhou Liang expressed that it’s a “person with broad international vision and rich professional knowledge”. Such talents just meet the needs of the auto industry of China, even the Chinese economy today.
Pay More Attention to Education
Mr. Zhou Liang, the only Chinese executive on the panel, pointed out the key element for cultivating talent. He commented that the key reason for China lacking international talents is that the education system of China limits the emergence and development of talents to a certain extent. He went on to explain: “China's education system needs a thorough reform, allowing for the cultivation of talent from babies and training them to have international vision, the education system must cultivate talents in accordance with international standards.”
Mr. Zhou Liang went on to express that open attitudes should be adopted as well as a more open environment on cultivating talents and attracting international talents from the country, government, enterprises and from the talent themselves. Mr. Zhou Liang hopes that people who are interested in the development of the auto industry can open their arms to accept international positions, local talents should cultivate management ability and language through international practice and gain broad understandings of internationalization to make themselves become internationalized talents; Meanwhile, overseas talent can also enter China, as long as the enterprises can formulate a strategy of internationalization, all kinds of talents who are familiar with Chinese culture, language and proficient in Chinese laws and regulations can play a role on a global stage.
Solve the two problems of cultivating and communication.
Mr. Jay Kunkel, who has worked for three international manufacturing enterprises within China, has profound experience in developing talents. Mr. Kunkel also believes that the fundamental level of education plays a very important role in talent development. “I have carried out a survey, in general, only a few engineering graduates are able to start a competent engineering work, only 10 percent can take to it directly.” Mr. Jay Kunkel said. He commented that enterprises must pay attention to training young workers.
Another loss comes from the brain drain which directly affects an enterprise bottom line. “The management department and human resources department should work together to solve the problem by communicating directly with employees, understanding their ideas as well as developing the working skills that they need on a personal basis.
General “Eight Core Abilities” to Retain Talent
As a human resources department director, Ms. Mary Thornton from General Motors, the world's largest automobile company, was quoted as saying, “the only prerequisite of creating and selling the world's best car is to retain the best talents.” GM developed its own eight core essential abilities for enterprise leaders to solve how to retain the talents.
GM’s eight principles starts with honesty; the second is the ability to adapt to the uncertain situations; the third is the development of local talent; the fourth is the ability to innovate; the fifth is the management ability; the sixth is the organization ability; the seventh is the strategic acuity; the eighth is the ability to control the vision and goals.
Ms. Mary Thornton hopes that leaders of GM should have these eight capabilities. This is also what should be mastered by the Chinese enterprises and entrepreneurs, she was quoted as saying: “We are faced with many challenges; these are eight essential abilities which are in order to meet the consumers’ satisfaction and to deal with these challenges.”
Allow for Fuzziness with Employees
When talking about the method of culturing and retaining talent within the company, Ms. Mary Thornton specifically raised the theory of allowing a certain amount of ambiguity and uncertainty, Ms. Thornton cited one example, “A 50-year-old employees will have very rich occupational experiences. To allow some uncertainty exists,it is of great significance to explore this type of employees’ potential.”
Ms. Vanessa Moriel, Managing Director and Founder of Human Capital Partners (HCP), is dealing with vagueness and uncertainty problems every day. China develops rapidly with diversified problems in different cities.In the view of different situations, we should recommend different types of talents to serve different enterprises.Chinese enterprises are searching for the best talent around the world. As long as they are equipped with technology ability, fuzziness in other aspects should be accepted as well as a flexible salary system.
Session 13: Design is the perfect combination of aesthetics and idealism
 
On 18th October, a number of specialists in the automobile design industry from various parts of the world shared their views in exterior designs, subject styles, design DNA, brand building and brand power upgrading which are valuable to the development of the China’s automobile industry.
 
Global consumers have compared Japanese and Korean automobile manufacturers with the Chinese manufacturers and they have commented on the advantages of the manufacturers which will have great influence on booming Asian automobile brands in the future. In the 90s, Korean cars still depended on the overseas technologies and designs. Once it had transitioned into its own independent style languages, they made significant progress. 
 
Mr. James Hope, Design Director of Chery reviewed the growth of the Korean car brands and said that in the 80s, the Korean cars started to have its voice and style in North America with its first Hyundai Pony model.
 
Mr. Xuan Qiwu, Chairman of IAT Automobile Technology Co., Ltd. previously served at Mitsubishi in his early years and he remembered that in the early 90s, the Korean Hyundai had borrowed many technologies from Mitsubishi. At that time, he did not feel the Korean cars were good; however, he discovered that the Korean cars had made great progress when he returned to China to start a career in 2004.
 
Statistics show that Korea has at least 200,000 auto designers, and in comparison, China has fewer automobile designers of which many designers are too young, lack patience and necessary professional growth processes. 
 
Mr. Xuan Qiwu said 10 years ago, it was easy to carry out automobile design, as the automobile manufacturers can directly approach design companies where they requested reverse engineering of an existing car. In recent years, Chinese manufacturers have started to develop their own products and they have become more demanding of the uniqueness of their car design.
 
The participants at the meeting think that the configuration of Korean cars is more reasonable and Hyundai can still operate two brands even if it has acquired Kia. Compared with the Korean automobile industry, the Chinese automobile industry has too many brands which are loose and cannot form a concentrated design language. It is a warning to the industry that the Chinese car brands lack significant features.
 
Mr. Suk-geun Oh, ExecutiveVice President of HyundaiMotor Company(in charge of Hyundai’s design center) has described the rapid growth of Hyundai Automobile with his own experience that the production scale of Hyundai Automobile was between 200,000 cars and 300,000 cars per year 30 years ago when he joined this company and its production and sale of cars last year exceeded 1.1 million cars. The continually developed product lines and family DNA has higher requirements for Hyundai car design, he said.
 
Mr. Suk-geun Oh said what he “feels about terracotta armies: the Chinese people could manufacture such vivid sculptures 2000 years ago and I have full confidence in the automobile design of China in the future.”
 
The design and development of cars are a collective creative process as it requires coordination of various factors, to include the fashion impulses and traditional classics. It needs to maintain the overall family style and new blood to the DNA. This is negative-and-negative creative process.
 
Session 14: Investment in ASEAN Needs Both Opportunities and Patience
 
ASEAN countries have been drowned by China, Japan, South Korea, and India. However, in the last 15 years, ASEAN economic development has been strong, improvement of infrastructural facilities, urban development and income growth have provided strong support to its number of cars on hand and benign growth. From the view of development, the ASEAN region has increased its demand of cars by 45% last year and 42% in production, and the production and sales have exceeded the quantity of 2 million. In the future, the ASEAN countries are expected to become a large consumer market and will establish a freer and more equal trading platform.
 
It has become an urgent matter that the ASEAN countries must face as to how these China-ASEAN countries free trade zone will operate, whether the Chinese cars and European cars will break the monopoly that Japanese car brands currently enjoy, and what roles the governments of ASEAN countries will play. On 18th October, the 2013 Global Automotive Forum discussed ASEAN countries. Mr. Madani Mohamed Sahari, CEO of Malaysian Automotive Institute, Ir.Soerjono, Director of Ministry of Industry, Directorate General of Leading Industry Based on Technology, Directorate for Land Transportation Equipment Industry in Indonesia, Mr. Yeap Swee Chuan, Chairman, CEO and President of Thai AAPICO  Hi-tech Public Co. and Mr. Armin Keller, Executive Director of ASEAN Sales Operations,Volkswagen AGcame together to express their views and conduct deeper discussion regarding the change of car competition in the ASEAN countries.
 
Ir. Soerjono stated that the Indonesian auto market sells 1.2 million cars per year and currently imports 120,000 vehicles per year, with most of vehicles being imported from Japan whilst the market in Thailand is more concentrated. Mr. Yeap Swee Chuan stated that the Japanese automobiles have basically controlled 90% of the import car market in Thailand and it has created much pressure and competition for other car companies to enter this area.
 
Mr. Yeap Swee Chuan further stated that Thailand is a potential car market but it is not easy to enter this market. Many global brands will spend 10 to 20 years to enter the Thai market and a great initial investment is required. How can the Japanese take the control of this market? Mr. Yeap Swee Chuan believed that this is a historical issue because the Japanese car manufacturers such as Toyota and Honda have spent much in the initial investment which brought them the low cost of operation in the long term.
 
Mr. Armin Keller stated, “Japan has built a large network in the ASEAN countries because it entered the market 40 to 50 years ago and has consolidated everything”. Facing a large potential market, the European brands such Volkswagen and the Chinese brands with great advantage are also seeking their opportunities.
 
According to Mr. Armin Keller, as the largest auto manufacturer in Europe and China, Volkswagen has invested in the markets in Indonesia and Thailand in small scale and this investment will increase with the expansion of market as Volkswagen will set up its manufacturing facilities in the ASEAN countries to reach the production scale of 3 million units. Mr. Armin Keller said that “Volkswagen will speed up its investment in the next 4 to 5 years to achieve the rapid growth. We wish to achieve a success in this region although we have entered this market rather late”.
 
Volkswagen has the courage to challenge the Japanese car manufacturers due to its influence as a European brand and its strong technology and high quality levels. To China, it has become a challenge for the automobile manufacturers to take a piece of the ASEAN market. Mr. Yeap Swee Chuan frankly said: “the Chinese brands have their advantages compared with the other brands but China cannot build a strong brand because it is too powerful, to impatient, too fast and too uneasy.”
 
Mr. Armin Keller has also expressed his idea and suggestions: it is very important to find a local partner. In addition, the investment should not be too large at the beginning, as it should be slow, not too fast and impatient.
 
Session 15: When will China have world-class auto parts suppliers?
--“Challenges and opportunities: Building world class components suppliers with complete supply chain capabilities”
 
Can China create its own world-standard suppliers? My answer is yes. When? It is not an easy question to answer as long as ‘when?’ is concerned.
 
As the forum continues to talk over the challenges and opportunities for Chinese auto parts manufacturers in the global market, representatives of automotive parts manufacturers from various parts of China and abroad came together to discuss as how to create the best and world-class suppliers in the global supply line. Mr. Tom Tan Yuesheng, Vice President of BorgWarner and President of China Region and Vice President of BorgWarner Drive train Systems Grouphas expressed his best wishes for the Chinese automobile development and has pointed the current weaknesses of the automotive parts industry.
 
China has become the largest manufacturer and consumer of automobiles in the world for four consecutive years but we are not the strongest automobile manufacturer and consumer in the global markets. Everybody should know that we are weak in auto parts. Mr. David Wu, Executive Vice President of Shenzhen Hangsheng Electronics Co., Ltd. pointed out that our ancestor Mr. Liang Qichao once said: “strong youths lead to a strong country, and we also believe that strong auto parts industry will make the China’s automobile industry strong.
 
In the newly released list of the top 100 auto parts suppliers in 2013, Japan has 29, USA has 25 and Germany has 20 which cover 74 manufacturers in the world. Added with 4 in South Korea, the total is 78. Only one Chinese company has been listed as one of them but it is ranked at 92. This shows that the China’s automobile industry is still weak, particularly in the areas of core and key technologies; China still relies too much on overseas companies for key components. 
 
Mr. Tom Tan Yuesheng believes that the world-class auto parts suppliers have three features; The first feature is that they play an important role in the market supply chain; the second feature is that they own high technologies; and the third feature is that they are strong financially which protects them from being knocked out as with the last global financial crisis.
 
Mr. Tan shared his ideas on how to create automotive parts suppliers in China and said that we should have a great insight and be creative in order to attract talents from the global market. He also pointed out that as all global brands currently are doing well in the Chinese market, Chinese companies can directly be involved in the auto parts supply systems of Ford, Volkswagen and GM etc., which is an advantage for them to create the world-standard auto parts suppliers that can be a short cut into the industry.
 
As one of the industries key automotive parts suppliers, Hangsheng has devoted its efforts in exploration and has concluded that Chinese auto parts suppliers currently are challenged by technology. It is necessary for them to invest at the initial stage and their investment in technology this year covered 8.5% of the total revenue. They estimated that the investment in technology would reach 10% of the total revenue in the next year. Mr. Wu said that the auto parts suppliers must depend on themselves in creating the core technology system and brands. Currently the number of R&D employees in Hangsheng has reached 600 people, which covers 20% of its head count.
 
In addition to its huge investment in R&D, Hangsheng has also attracted talent who have studied abroad to join its R&D team in order to integrate the global resources. Hangsheng currently boasts 15 overseas Chinese who have returned to China to assist in the R&D work in the auxiliary system and the new-energy system. Mr. Wu said: “We have also cooperated with Intel to establish our creative center and we have been cooperating with our upstream IC chip manufacturers to resolve technical problems by working with high-end parts suppliers.”Hangsheng has entered the systems of a number of multinational companies, to include Nissan, Volkswagen, Honda, PSA and etc..
 
Mr. Li Fan, Vice General Secretary of Zhejiang Association of Automobile Manufacturers thinks that the development of the Chinese auto parts development needs an unified system and the auto parts manufacturers and OEMs should have proper coordination, Mr. Li was quoted as saying: “we are now building our database of best auto parts suppliers and are actively establishing Zhejiang Automobile Engineer Association in the hope of uniting the automobile manufacturers and auto parts manufacturers”.
 
Wilson Ni, Visiting Professor of Tsinghua University, who moderated the session, said that the automobile manufacturers are very noisy and have attracted much attention. However, the auto parts manufacturers seem to have been ignored by the media and the governmental departments.
 
China has become the largest market of complete cars and vehicles but it is still far from a world-class of global auto parts supplier. If no entity moves to unify the industry then it will be difficult for China to establish a strong automotive industry
 
Session 16: The future opportunity is greater than the challenge and the coordinated cooperation has become a common view
 
The automotive industry faces various challenges and also opportunities, particularly today when the world has undergone true global economic integration. The development of the car industry now faces various limits, such as environment, oil consumption, future energy, safety and traffic control. Under such circumstances, policy designers, industrial institutes, auto manufacturers, suppliers and all automotive related industries have exhibited their skills in developing under difficult conditions
 
On October 18, 2013, a number of senior officers shared their ideas and have designed a blueprint for development of the automobile industry in the future at the closing ceremony of the 2013 Global Automobile Forum. Those people included Mr. Jia Yaobin, Executive Vice Mayor of Wuhan Municipal Government, Mr. Alan Mulally, President and CEO of Ford Motor Company, Mr. Li Shufu, Chairman of Volvo Car Corporation, Founder and Chairman of Geely Holding Group and Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen AG, President & CEO Volkswagen Group China.
 
“Today our host has proposed a question whether we are able to present an answer regarding the sustainable growth in this cooperation. Our answer is firm that we can do it and this is the idea of Ford.” Mr. Alan Mulally, CEO of Ford, said.
 
Ford is a company with a history exceeding 100 years which has allowed Mr. Alan Mulally to have more consideration regarding the coordinated cooperation opportunities. He believes that our auto industry has gained great progress in the past few years and has contributed greatly to economic development within China, which is very important to the realization of energy independence and safety of energy supplies. In addition, it has also created some solutions to sustainable growth with a focus on environmental issues.
 
We can see now that the confirmed sustainable technical route is very clear and we need much more coordination and cooperation in this area. Firstly we have large space for further improvement including the internal combustion diesel engines and gasoline engines, high strength steel, aluminum alloys and composite materials. Therefore, we have much to improve in the material area; in addition, there are improvements for aerodynamics, electronic devices and system integration. One of the key technologies is compatibility. 
 
Mr. Alan Mulally stated that we really want more people to participate in this process and we are very willing to answer all questions from our host. Enhanced cooperation is an answer to the coordinated cooperation for sustainable growth.
 
As the only Chinese enterprise in this session, Mr. Li Shufu has deepened understanding of the coordinated cooperation after his Geely Group acquired the Volvo brand.
 
Mr. Li was keen to stress that Geely is Geely and Volvo is Volvo as Geely is a brand for the masses whilst Volvo is a luxury car brand. Geely and Volvo are like brothers instead of having a father and son relationship. Mr. Li Shufu went on to say: “Since the acquisition in 2010, Geely and Volvo have made progress in cooperating in step-by-step process. In February this year, Geely Holdings Co. set up a R&D center in Sweden which started operating in September. We have integrated the best R&D resources for Geely and Volvo by depending on the strong R&D basis, developed a brand-new medium-class module structure, which has set a solid foundation for developing the next generation of Geely and Volvo car models. 
 
Mr. Li Shufu stated that as long as Geely continues to work hard on the new technology and new car models, to explore and practice and maintain our leading position of the Volvo cars in technology, the Volvo cars will gain greater opportunities of development in the market in the future.
 
With the expanding influence of the China market, Dr. Haizman, CEO of Volkswagen Automobile (China) expressed the same view: “Firstly we are facing the future challenge, secondly we have demand for sustainable growth in the future and thirdly the employees are very important to us, including all employees in the auto industry who are very important to the future development of automobiles and the Chinese society.” “The conditions within China are full of challenge and we are facing various uncertain things, such as climate changes, urbanization process, traffic jams and air pollutions.” Dr. Haizman thinks that the first task for China is to solve the ecological problem. All people present are obliged to contribute to environmental protection.
 
Sustainable growth is a challenge for the whole auto industry and we need to find a way to balance the dynamic needs, to consider the environment and our resources.
 
Dr. Haizman stated that the three columns of the auto industry in the future for development include energy preservation, highly efficient dynamics and smart systems to ensure that our driving habits are in line with urban needs. To achieve these goals, the Chinese auto industry should become more cooperative and have a deeper cooperation with suppliers. It needs a clear and stable legal framework in which we can establish a partnership with all participants and partners. Our employees should work together and we also need thorough cooperation with the joint ventures in China.
 
Mr. Jia Yaobin, Executive Vice Mayor said that with a view to the future, the automotive technology revolution has boomed and the new model of technology and business is changing the outlook and form of competition. The global automotive industry has extensive opportunities. Facing the challenge and proposing solutions, the policy makers, industrial institutes, auto manufacturers and suppliers and various related parties should enhance cooperation in various fields which is key to solve the problem of growth, seize opportunities and create a future for the auto industry.
 
As the host of this forum, Mr. Jia Yaobin has a positive attitude towards the achievements made in this forum and he said that we have discussed the future growth regarding the auto industry in the future from our goals, strategies and modes and have reached constructive and fruitful common views. Mr. Jia said that this forum is successful and has reached the objective as it has drawn various ideas, thoughts and views from the participants.