Presentation on Internet of Vehicles at Citigroup China Auto Conference

Shanghai, China, November 14, 2014

Gao Feng’s Managing Director and Auto Practice leader Bill Russo will join a panel discussion titled Opportunities and Challenges of the China Auto Industry at 11:15am, and after this will deliver a keynote speech titled “Reinventing Mobility in China” at 12:15pm.

Topic:  Reinventing Mobility in China

With the auto industry developments and the increasingly prevalence of the wireless internet and mobile devices,  the Internet of Vehicles will create discontinuous opportunities for product and business model innovation. 
The conditions in China – the world’s largest auto market and the market with the largest number of both internet and “smart phone” users – will likely make it the incubator for rapid commercialization of such innovations. China’s urban transportation challenge, the high rate of adoption of connected mobile devices, combined with the rapid and aggressive introduction of alternative mobility and vehicle ownership concepts from new entrants, will ultimately compress the time needed to commercialize smart, connected car technologies and related services. Such developments will dramatically alter not just the feature content of vehicles, but may also usher in a revolution to the business model of the automotive industry – where a model focused on “users of mobility services” could emerge as a real alternative to the traditional model of “car ownership”.

Conference Agenda

8:00 – Breakfast / registration

8:30 – 8:45 – Opening Remarks

8:45 – 9:30 – China Economic Outlook: Moderation, Mobility and a New Normal

9:30 – 10:15 – Tri-dimensional view of the Automotive Landscape –  China, Asia, Global

10:30 – 11:15 – The Global M&A Context

11:15 – 12:15 – Panel: Opportunities and Challenges of the China Auto Industry

12:15 – 1:00 – Lunch and Keynote Session: Reinventing Mobility in China

2:00 – 3:00 – Key Developments in the China Debt Markets


Venue: Mandarin Oriental

Mandarin I + II LG I

111 Pudong Road (South)

Pudong, Shanghai

200120, China

+86 21 2082 9888


How Connected Mobility Technology Is Driving The Future Of The Automotive Industry – Part 1

After over 20 years of advances in the world of mobile connectivity, big data and social networks, technology is now rapidly infiltrating the traditional realm of the automotive industry and shaping it to be at the forefront of global technology.

This new form of “connected mobility” is driving new technologies in the world of navigation, analytics, driver safety, driver assistance and information virtualization.  The challenge of understanding the opportunities and the threats (both cyber and physical) of this new industry will set the scene for a new competitive environment for both traditional OEMs and non-traditional players looking to establish themselves as the global leader of connected mobility.

At the same time, the rapid emergence of markets like China has changed the nature of competition in the 21st Century global auto industry as well as the commercialization pathway for such technology frontiers.  The rapid embrace of mobile connectivity by Chinese mobile device users, combined with the commercial aggressiveness of China’s internet giants will create conditions conducive to the rapid commercialization of smart connected car technologies.  As the leading automotive market, China is poised to revolutionize the global automotive industry, especially in the area of the Internet of Vehicles, making mobile vehicle connectivity the next great frontier of automotive innovation.

Traditional industries remain unchanged across 10 decades…

For over 100 years, our global economy has been reliant on traditional industries for fuelling our economies and for the production of goods and services.  From energy, through water and resources we have seen little change in these sectors since their inception, many of them using the same fundamental technologies. However, in recent years we have seen technological advances slowly being deployed across these industries, a trend that we expect will impact the very foundation of these sectors.

While much of our traditional industry backbone has been trapped in the industrial era of the early 1900’s, more modern sectors have shifted through the Information Era of the mid 1900’s to the knowledge era of the 2000’s.  This lack of progress can mostly be attributed to the conservative nature of traditional industries as well as the general lack of reform and cost and complexity for transitioning from old legacy platforms.

After 20 years of technological advances, traditional industries are shifting…

Following 20 years of significant advances in technology, the market conditions are now in place for a fundamental shift in industrial technologies.  Four key technological game changers are driving this transformation – cloud computing, big data, social networks and mobile/connected technologies.  The convergence of these technologies is expected to revolutionize business, society and industry, disrupting old business models and creating new ones.

A transformational impact on the automotive industry

The industrial technology revolution is particularly visible in the automotive industry, an industry that for 100 years relied on engineering innovation and is rapidly becoming more dependent on digital demands and mobile connectivity.  This is on top of traditional industry challenges such as cost pressures, diverging markets, and a shifting industry landscape.

There is also a growing sentiment that OEMs cannot simply turn to their traditional toolbox. OEMs will need to review and adjust their strategic priorities, deploy the appropriate investments and resources, and develop new skills to execute these strategic objectives.  Accordingly, we have seen the automotive industry focusing on innovation more than ever before with fourteen automakers among the top 50 most innovative companies (in BCG’s 2013 survey) with the focus on innovation in four areas: power train, lightweight materials, connectivity, and active safety/assisted driving.

We have also seen OEMs working with open innovation as a paradigm to drive external ideas and internal incubation.  Using open innovation platforms, OEMs are boosting innovation capacity and harnessing the talents of people outside their organisations.  This method is enabling OEMs identify new requirements, unarticulated needs or existing market needs, accompanied by innovative solutions in the form of new technologies, new services or new uses of existing technology.

The challenge for OEMs will be to effectively develop processes for integrating technology into their product lines and through this to find new ways of achieving a competitive advantage in the marketplace.  This will also uncover the need for supporting new business models and vehicle ownership trends (such as vehicle leasing models or car sharing schemes).  One mega-trend we are seeing in the market is the development of connected car technology.  This technology is already revolutionizing the auto industry and is likely to be one of the key differentiators in the auto industry of the next few years.

End of Part 1

For further discussion, please contact the authors:
Bill Russo
Managing Director,
Gao Feng Advisory Company

Chee-Kiang Lim
Gao Feng Advisory Company

Guy Pross
Managing Partner,
31ºNorth Innovation Exchange 

Uri Kushnir
Managing Partner,
31ºNorth Innovation Exchange