Industry Rethinking: Private Car Dealers' Hands and Roads


Before the CPPCC National Committee member and Chongqing Lifan chairman Yin Mingshan set foot on his way to Beijing, several photos of the Lifan 520 rollover shot several months ago began to stir up on the Internet.

"In the industry, 70% of people are not optimistic about Lifan cars. The rollover incident has deepened people's doubts about the future development of Lifan." Yin Mingshan is aware of the pressure of survival. As one of the few private enterprises made by the National Development and Reform Commission, Lifan was pushed into the cusp of this time.

Although China's automobile industry has achieved rapid development since the mid-to-late 1990s, the proportion of private enterprises in the entire automotive industry is still insignificant. The proportion of enterprises accounts for only about 13%, and the output value is less than 10%. As for private enterprises, the industry has always been mixed.

On the one hand, although the number of private enterprises in the entire automotive industry is small, the private enterprises represented by Geely, Great Wall, etc. have become the main driving force for the development of the automotive industry, especially for self-owned brands. When Sino-U.S. trade continued to create "sparks," Geely threatened to "enter the U.S. market in 2008" and shook the global industry. In the days when China’s auto exports were the first to exceed imports, the Great Wall became a well-deserved top exporter of automobiles.

But on the other hand, we have to face up to the failures of private enterprises to build cars in recent years. Some people think that private enterprises such as Oaks, Midea, and Amoi have withdrawn from the auto industry one after another. This proves that private enterprises often do not aim at industrial development. This is inconsistent with the automotive industry that requires long-term technical investment and service investment, which has also deepened people’s attitude towards private enterprises. Motivation and persistence of skepticism.

Our industrial policy also seems to be interested in supporting the latter kind of judgment. Prior to the introduction of the new automobile industry policy in 2004, the entire vehicle sector basically restricted the entry of private capital. However, after the introduction of the new automobile industry policy, although all capitals are treated on the surface without discrimination, a careful analysis will reveal that the policy has raised the threshold for the entry of private enterprises. For example, a new automobile manufacturing company will invest at least 2 billion yuan, and another 500 million yuan will set up a research and development center. For most of the private enterprises aiming at small investments, gradual returns, and rolling development, policies actually retreat from admonishing them.

From the perspective of the current form of industrial development, in fact, the pressure for survival of private enterprises has been increasing. The phrase "overcapacity" has been looming over the automotive industry in recent years. Once the State Council has officially established itself as an overheated industry, a series of targeted concrete remediation measures will follow. In the future, there seem to be only two ways for private enterprises: either to accept state-owned enterprises or to increase investment. And these two roads have undoubtedly increased the risk factor of private enterprises to build cars.

Not long ago, a sample survey was conducted by the China Social Survey Institute. The results showed that the products trusted by domestic consumers were still owned by FAW, Dongfeng, SAIC, and their products. "If you lose trust, your company will be paralyzed." In Yin Mingshan's view, the confidence crisis faced by private enterprises may be even more urgent. And where will the private enterprises under internal and external troubles go?

There is no doubt that the technical quality standards of the automotive industry will continue to increase, and safety and environmental protection requirements will also be more stringent. The “Geely model” that had been used to beat up and beat the home to develop 200,000 vehicles per year has become history. There is no shortage of dazzling brands in the auto market. There is no shortage of inexpensive cars worth 350,000 yuan. If private companies hold only a low-priced card in their hands, their roads may be narrower and narrower. (Author: Wang Jing)


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