Zhao Ying: The "New Normal" Lets Multinational Car Enterprises Deepen Strategies to Accelerate Product Launch


As China's macroeconomic growth slows down, restrictions on purchases and restrictions on tourism policies have been adopted. Has the investment environment of multinational vehicle companies gradually deteriorated in China? Zhao Ying, a researcher at the Institute of Industrial Economics at the Chinese Academy of Social Sciences, holds a negative view. He believes that "for a multinational car company, China's current investment environment is not deteriorating."

According to Zhao Ying, the current reason why China’s economic environment and environmental protection policies do not cause pressure on multinational car companies is because they also have harsh restrictions in their home countries. For example, in Europe, America, Japan, and other developed countries, the product requirements of multinational car companies themselves are much higher than China's. Therefore, the policies introduced by China are the roads that multinational companies have experienced in their home countries. In addition, the treatment of Chinese local car companies and multinational car companies is the same.

The slowdown in China's economic growth will inevitably affect the auto market, but the auto market itself is also undergoing changes. Zhao Ying said that China’s auto market is in short supply from the past, and competition is not very fierce, and it is now in the stage of fierce competition. "If the automobile industry and the automobile develop their own laws and requirements, the Chinese automobile has entered the "new normal." This "new normal" I think can maintain the growth rate of 5% to 6%," Zhao Ying said.

In this case, if all the existing production capacity can be achieved, the competition will be very fierce, and for multinational companies, as in the past, if a model with a higher grade than the domestic product is used, it will not be possible to sell the product. Changes have occurred and the weaknesses of multinational companies due to their own characteristics will also be exposed.

The weaknesses mentioned above are mainly divided into two aspects. Zhao Ying believes that first, due to the control of the company’s headquarters, multinational corporations have been slow to reflect changes in the Chinese market, and they have to report on emergencies at all levels and deal with delays. The second is that multinational companies naturally consider their products to be good in China and arrogant to consumers. Most critically, the sensitivity of multinational companies to the changes in the Chinese market and the rooting of the Chinese market are not as deep as those of local companies.

For 2016 and the next two or three years, Zhao Ying, the chief investment direction of cross-border car companies in China, also made predictions. He said that it was a short board because multinational companies originally had several cars in the Chinese auto market. Not a full range of models, they have a gap in meeting different levels of demand. "If you have a gap in an increasingly competitive market, it is clear that the market will change and you will not be able to adapt to this market."

The second is new energy vehicles. The next step for multinational companies to understand and grasp the development pulse of the new energy vehicle market, how to compete with Chinese local companies is crucial. Because from a technical point of view, the gap between multinational car companies and local car companies will become smaller and smaller. At the same time, new energy vehicles will face many complex factors such as business models, charging models, and sales models. The company focuses on considerations.

As for the future, will the core technologies of auto manufacturing achieve localization, Zhao Ying said bluntly, “Don't hope that transnational corporations will give China independent innovation, they are only a company. I think the process of independent innovation of multinational corporations in China, It is a spillover process that they engage in some R&D in China and may set up some R&D institutions in China, which may help China’s independent innovation capabilities.As for core R&D capabilities, from the perspective of economics, foreign countries The core capabilities of capital-based multinationals can never make contributions to China's independent innovation, which is impossible."

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