On April 26th, 2018, jointly organized by the China Association of Automobile Manufacturers and CCTV Financial Channel, the 2018 China Automobile Forum supported by the World Automobile Organization (OICA) was held in Beijing in the afternoon. In the afternoon, many important representatives of the domestic automobile industry centered around 'new' “Development Strategies and Layout of the Automotive Industry of the Era” presented their respective views on the theme. Mr. Zhang Chi, Senior Manager of Strategic Planning of Beijing Automotive Group Co., Ltd., shared with them the important strategic issues currently under focus from BAIC Group and the strategic actions of BAIC Group in the new era. In two aspects, we have learned more about the efforts of BAIC Group as a domestic large-scale auto group to achieve self-breakthrough in response to this change, as well as the action steps in the future. We will focus on research and development to enhance the overall development strategy of 2025 new energy. Share travel, put forward full-scale research and development, comprehensive new energy, embrace the future of strategic ideas, refreshing.
Mr. Zhang Chi, Senior Manager of Strategic Planning, Beijing Automotive Group Co., Ltd.
Mr. Zhang Chi said at the meeting that the strategic planning business line of BAIC Group has been tracking the international industry situation and industry trends for a long time. We feel that in recent years, the industry is actually full of all kinds of bright waves. Our research is mainly focused on two issues. The first one is the full opening of China's auto industry, the possible structural impact on our group companies, and some countermeasures we may take. We started from five years ago. Concerned about the fact that some legislatures have started discussions on whether to sell fuel vehicles in the country. Up to now, some countries have already made a legal ban on fuel vehicles gradually over the next five to 10 years. Decisions to sell in the country. Some countries have not made similar decisions, and they have also made statements that are windy in terms of policies through various forms, whether they are from parliamentary resolutions or proposals, etc. At the same time we observe There are at least two large auto group companies at home and abroad, including Yuan Chang’s Chang’an Automobile, Shangri-La Plan, and A similar plan to stop selling traditional fuel vehicles.
Based on the BAIC Group's understanding of such a problem, we believe that from the analysis of the situation in the Chinese market and other major automotive markets in the world, the rate of decline in automobile fuel consumption standards may be the cause of this phenomenon. In accordance with the trend of the current regulations, we The national fuel consumption may develop at a standard of four liters per 100 kilometers. According to the analysis of the road map of China's new energy vehicles and energy-saving vehicles launched by the expert group at the State Department level, we may reach an average fuel consumption standard for our national enterprises by 2025. The level of one hundred kilometers is 3.2 liters. We think that, in fact, if laws and regulations are to change in this direction, in fact, is a national government making such a decision, or saying that a company, is it right? The plan is open. Actually, by 2025 and 2030, the vitality of traditional fuel vehicles will have to be a question mark. It's not that when the fuel tank is not available on the market, it is not. In addition, it is possible to improve the efficiency of fuel vehicles through light mixing systems, or other hybrid forms. Including fuel cells, other alternative fuels, will appear on the market.
Based on this consideration, at the end of last year, we officially announced the Beijing Automotive Group’s leadership of 2025, which is the new energy strategy. The BAIC Group’s own brand passenger car will first stop selling traditional fuel vehicles in Beijing in 2020. Mixed, pure electric vehicles all kinds of generalized new energy and energy-saving cars. Then gradually in 2025, the national market tends to stop the sale of fuel vehicles.
As for the full opening of China’s auto industry, President Xi also publicly announced the direction of such a policy. It is very clear that BAIC Group has paid a long-term attention to this issue. Our concern for this issue also stems from the entire vehicle of BAIC Group. The existing structure of parts and components business. Our vehicle business actually started to be stronger than the entire vehicle joint venture business. The development of our parts and components business is also bridging the joint venture. We go further with the international parts giant through the business of parts and components. The joint venture has completed our original accumulation. Of course, we also realized that such a model actually has hidden dangers. Under the state of opening up the automobile industry in the country, the original joint venture company of China’s auto companies, the right to control the entire vehicle joint venture and The weakening and declining of equity is considered to be inevitable. This cannot be avoided on an absolute level. You absolutely want to put an end to saying that our influence will not decline. I think it is impossible. On this basis, think about attachment again. In the original joint vehicle cooperation model, we are talking about a simple OEM. Quality, it also loses the foundation of existence. The opening up of the country's industries is for many of China's entire vehicle and parts companies. This is a declaration of weaning. Our country has been fighting for the auto industry for more than 30 years after the reform and opening up. The development opportunity has given great support at the policy level. Now it needs to grow up and it needs to rely on its own ability to survive in the market. Not only BAIC, but also many domestic brethren companies face similar situations and industrial structures. The state of adjustment, this change is both an opportunity and a challenge, and the challenge is actually very great. The promotion of autonomous metabolism will be the most important topic for BAIC Group in the coming period of time. Despite the protection of vehicle joint ventures, Commercially, there are certainly ways and means to negotiate. Only the improvement of autonomy is the fundamental way to deal with this problem.
In the near future, the main work of BAIC Group will focus on three aspects. The primary work is actually the integration adjustment and improvement of our own brand vehicle R&D system of BAIC Group. At present, BAIC Group’s own brand business From the heart, we should say that with outstanding brother companies in the industry, we believe that there is a gap in the competition, and we also realize that there are disadvantageous situations in the competition of independent brands. Here we want product strength to be a Important issues. The key to determining product strength lies in product planning and technology research and development. During the period of one to two years, BAIC Group will integrate and integrate vehicle organizations, R&D institutions and resources within the group, while reducing duplication of resources. Sexual construction and waste, and more importantly, unified the research and development of technology, products and core components within the group. On this basis, through the adjustment and optimization of the brand, complete the comprehensive review of the product line. The support and investment of the technology center of the platform, seeking breakthroughs in the field of electrification, light weight, and automatic driving. In the domain, we will focus on the new technology research institute and will promote the research and development of new energy vehicles. Our L4 experimental autopilot system has been tested in part of the experimental road environment, as well as related units and specific environments. Some exemplary operations were carried out. At the same time, BAIC Group, as an undertaking unit, also undertook the first state-level new energy vehicle technology innovation center. In the future, it will rely on the capabilities and resources of the national innovation center to help enhance its own research and development capabilities.
On the one hand, some actions were taken in response to Beijing Automotive Group's 2025 new energy strategy. On the one hand, a series of active adjustments were made to the production capacity, and the old production capacity was removed and the new production capacity of pure electric vehicles and light-duty vehicles was adjusted. The field of pure electric vehicles is moving earlier and faster. So far, BAIC New Energy has also made remarkable achievements. But based on the current status of industry development and our understanding of the market, we believe that The energy technology development strategy is adjusted. We have adjusted it to a new technology line that combines three lines. We have also explored cooperation in business models. At present, BAIC and Didi have signed a cooperation agreement that will follow the The company's operating needs, based on the Beijing Automotive Group's new energy vehicles as the basis for research and development, developed and operated custom vehicles for DDT, and explored new modes of cooperation with travel service companies.
Mr. Zhang Chi also said that besides its main business, BAIC regards shared travel services as an emerging business opportunity. BAIC set up a Huaxia travel company in April 2017 to explore the shared travel business. The business has covered two kinds of leasing business for the government and individuals, and also cooperated with the Internet travel service company to intervene in the network about the car business with specific roles. At the same time, it is exploring the market of light logistics vehicles. Based on this, it explores This creates a series of new value-added services. Huaxia has more than 1,100 time-share leases and 1,200 parking spaces in 15 cities. We invested a total of 17,000 vehicles, mainly pure electric passenger cars. In the later period, we will invest in hybrid vehicles and fuel vehicles. We will invest pure electric vehicles and new energy vehicles in cities and regions that are more suitable for pure electric vehicles. At present, Huaxia Travel Company has been established for more than a year, and we have achieved more than that. Annual revenue of 500 million yuan. We now have 200,000 registered users, of which more than a quarter are long-term active users.
Judging from the current business practices, we have found that sharing travel business is a new area worth exploring. The shared travel business will also serve as a long-term concern for BAIC Group and will continue to focus on the future.
For BAIC Group, in the future, the principle of business strategy is very simple. First, it insists on the use of new energy vehicles in a broad sense as the breakthrough point for independent R&D and product planning. Second, to abandon the illusion and strive to enhance technological innovation. The third is to embrace the future and explore new modes of travel.
Beijing Auto Group is still an auto company. The basic task is to make a good car and do the car well. The vehicle and its components are still the core and foundation. BAIC Group will also learn from outstanding brother companies and learn from their successful experiences. Chinese consumers contribute more and better products.