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Written by Terry Costlow
Chinese planners are focusing on "new energy" vehicles (NEV) that don"t rely primarily on internal combustion engines to become a mainstay of its future automotive production and consumption. Although there"s overcapacity throughout China"s automotive supply chain as the economy slows down, a number of new companies are expected to enter the NEV market. At the 2016 Global Automotive Forum in Chongqing attended by Automotive Engineering, speakers from government and private industry described a strong push to design and produce vehicles that utilize alternative power sources including batteries or hydrogen. This prediction comes as the country ramps up to cement its position as the world"s largest automotive manufacturers by building up to 30 million vehicles by 2020. "New energy vehicles have become a critical aspect of China"s future," said Wang Ruixiang, Vice Director General of Committee for Handling Proposals of 11th Chinese People"s Political Consultative Conference. "Funding from the national government has opened a new page of development." This strategy comes amidst a slowdown in the Chinese economy, where the gross domestic product is expected to grow at around 6% annually, down from double digit growth in recent history. Nonetheless, automotive production is expected to grow significantly from roughly 25 million made in China last year. "China"s 13th Five Year plan calls for production of 28-30 million vehicles by 2020," said Luo Zheng, President of Transportation Finance at Ping An Bank. "Sales in China will account for the dominant role, but vehicles will be exported to other countries." Some speakers said that focusing on alternative energy gives Chinese companies a better opportunity to develop their own technologies, since electrified powertrain design is still in its early stages compared to the long reign of combustion engines. "New energy vehicles are expected to become the dominant market in China first," said Wang Xia, Chairman, China Council for the Promotion of International Trade"s Automotive Committee. "New energy vehicle companies in China have their own proprietary intellectual property." A number of OEMs are ramping up their efforts. The emergence of startups competing with existing suppliers is creating challenges for Tier 1s and other suppliers. It"s difficult to support several new development programs, particularly at a time when GDP growth is slowing significantly. "No less than 18 companies have approached us for developing new energy vehicles," said Frank O"Brien, Executive Vice President, Asia Magna International. "There"s not room for 18 "new energy" vehicles in China. Our challenge is determining which OEMs and which of the 18 platforms we want to work with." GAF speakers said that most vehicles manufactured in China will be sold in China. International automakers selling in China may have to refocus their design efforts to compete with local competitors. While entry-level vehicles are a dominant factor in China, there"s a major opening for advanced technology, particularly longer term technologies like driverless cars. "As the market slows down, we need to develop vehicles specifically for the Chinese market," said Hubertus Troska, the Board of Management Member at Daimler who"s responsible for Greater China. "Electric cars lower the barrier for new entrants. Autonomous electric cars will be a new area, new companies are coming in. Competition is increasing." Some panelists at GAF said that China could become a leader in autonomous driving too. Some surveys have shown that potential car buyers are more interested in self-driving vehicles than those in many other regions. "China is the country with the highest score for people who will accept autonomous driving," said Ralf Cramer, CEO of Continental China. "Autonomous driving will come sooner in China than elsewhere." <br />
Date written: 10-Jul-2016 07:45 EDT
More of this article on the SAE International Website
ID: 4207
Chinese planners are focusing on "new energy" vehicles (NEV) that don"t rely primarily on internal combustion engines to become a mainstay of its future automotive production and consumption. Although there"s overcapacity throughout China"s automotive supply chain as the economy slows down, a number of new companies are expected to enter the NEV market. At the 2016 Global Automotive Forum in Chongqing attended by Automotive Engineering, speakers from government and private industry described a strong push to design and produce vehicles that utilize alternative power sources including batteries or hydrogen. This prediction comes as the country ramps up to cement its position as the world"s largest automotive manufacturers by building up to 30 million vehicles by 2020. "New energy vehicles have become a critical aspect of China"s future," said Wang Ruixiang, Vice Director General of Committee for Handling Proposals of 11th Chinese People"s Political Consultative Conference. "Funding from the national government has opened a new page of development." This strategy comes amidst a slowdown in the Chinese economy, where the gross domestic product is expected to grow at around 6% annually, down from double digit growth in recent history. Nonetheless, automotive production is expected to grow significantly from roughly 25 million made in China last year. "China"s 13th Five Year plan calls for production of 28-30 million vehicles by 2020," said Luo Zheng, President of Transportation Finance at Ping An Bank. "Sales in China will account for the dominant role, but vehicles will be exported to other countries." Some speakers said that focusing on alternative energy gives Chinese companies a better opportunity to develop their own technologies, since electrified powertrain design is still in its early stages compared to the long reign of combustion engines. "New energy vehicles are expected to become the dominant market in China first," said Wang Xia, Chairman, China Council for the Promotion of International Trade"s Automotive Committee. "New energy vehicle companies in China have their own proprietary intellectual property." A number of OEMs are ramping up their efforts. The emergence of startups competing with existing suppliers is creating challenges for Tier 1s and other suppliers. It"s difficult to support several new development programs, particularly at a time when GDP growth is slowing significantly. "No less than 18 companies have approached us for developing new energy vehicles," said Frank O"Brien, Executive Vice President, Asia Magna International. "There"s not room for 18 "new energy" vehicles in China. Our challenge is determining which OEMs and which of the 18 platforms we want to work with." GAF speakers said that most vehicles manufactured in China will be sold in China. International automakers selling in China may have to refocus their design efforts to compete with local competitors. While entry-level vehicles are a dominant factor in China, there"s a major opening for advanced technology, particularly longer term technologies like driverless cars. "As the market slows down, we need to develop vehicles specifically for the Chinese market," said Hubertus Troska, the Board of Management Member at Daimler who"s responsible for Greater China. "Electric cars lower the barrier for new entrants. Autonomous electric cars will be a new area, new companies are coming in. Competition is increasing." Some panelists at GAF said that China could become a leader in autonomous driving too. Some surveys have shown that potential car buyers are more interested in self-driving vehicles than those in many other regions. "China is the country with the highest score for people who will accept autonomous driving," said Ralf Cramer, CEO of Continental China. "Autonomous driving will come sooner in China than elsewhere." <br />
Date written: 10-Jul-2016 07:45 EDT
More of this article on the SAE International Website
ID: 4207