Your future driving experience: Q&A with auto expert, Bill Russo

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Few observers of the evolution of the automotive scene have had a better vantage point than Bill Russo. With more than 30 years in the industry — half of that time as an auto executive with experience in China and Asia — Russo nowadays heads up the Automotive practice for Gao Feng Greater China, working as the company’s senior representative in Shanghai. We spoke with Bill recently for our third installment of our Q&A series to get his take on the impact of autonomous driving and the emergence of smart vehicles on the roads.

Q: How will the driving experience change in the Autonomous Age?

A: The potential is there for a complete redefinition of what we mean by transportation, both in terms of comfort and convenience. With the advent of autonomous driving, we’re talking about a transition from a device where we really had to focus on the road — because we were the brains of the car — to where we can focus on other things. That is time given back to us that will allow us to do other things because we won’t have to monitor what’s going on with the vehicle itself.


Q: Thinking back to how the public reacted to other major technology shifts in transportation, such as trains or commercial aviation – To what extent were these shifts driven by the user-convenience factor?

A: When you look back in history, the greatest inventions by humans — the wheel, the bicycle, the steam ship, the train, the airplane — they all exist to give us the ability to travel over increasingly greater distances. Over time, each invention added more convenience and more new features to make the experience of mobility much more enjoyable and less painless. And as each of these solutions became commercially viable and affordable, they did so by offering users a benefit versus whatever preceding form of transportation they had favored up to that point―a benefit for which they were willing to pay.


Q: How important was the pace of technological progress?

A: It’s not about creating a technology for the sake of having the technology; it’s about providing a more comfortable and convenient way for people to travel the distances that we travel each day. They have to provide a tangible benefit for people to be willing to pay and use the new mode of transport. For example, trains reduced the amount of time that it took to travel across the country from months to days. The commercial airplane reduces that same time to a matter of hours. We can circle the world in a jet in little more than a day. Not so long ago, in historical terms, that journey took people years in a boat and they may not even have lived to tell the story.


Q: Where do cars fit in the historical narrative?

A: The car became a primary means for the average person to satisfy their daily needs for mobility. We’ve designed city and transportation networks that were basically designed for vehicular transportation. In the 21st century, we’re seeing a phenomenon — particularly in emerging markets in Asia — where there are now very densely populated urban centers. That urbanized context is not really well suited for the car that we know today. Today’s cars are designed really for highway transportation. So in an increasingly urbanized world, we’re going to experience the next evolution of convenience and mobility which I think will be an autonomous mobility solution.


Q: Will perceptions of autonomous driving vary by country due to local conditions?

A: Absolutely. First of all, comfort and convenience are solutions to mobility “pain points” and the degree to which people experience pain points varies greatly based upon where they live. Mobility pain is much higher in densely populated cities, like New York or Paris or Delhi — and virtually all major cities in China. A city like Beijing experiences gridlock several times a day. And the driving experience in a highly urbanized country like China can be horrific. You can spend an hour going less than 10 miles in a car. So the joy of being behind the wheel and driving is not really there. It’s a big difference from the driving experience of getting out on the open highway. New forms of electric and autonomous mobility―like the advent of on-demand mobility where a user pays only for the time they are in the car, rather than owning it 24/7 and using it only seldom — will be a common solution to address the mobility pain points in many places.


Q: What does it mean when we have autonomous vehicles on the road that are designed from a user-centric perspective
 as opposed to the current driver-centric mindset?

A: With autonomous cars, we will be able to transform travel time into productive time — especially for longer distance commutes. There’s the potential to participate in the digital ecosystem, offering users in autonomous cars access to services and content that they can consume while mobile. Convenience services could include infotainment or watching news or doing emails and conference calls. The car thus becomes a connected rolling space that transports us to places where we live, work, and play.


Q: As autonomous technology removes the drudgery of mundane tasks associated with driving, how does that reshape how we relate to vehicles?

A: Vehicles will have the intelligence to diagnose the situations that they’re in and make the more complex decisions that human beings today make. That not only reduces the pain points of driving, it also is going to make the overall experience more convenient, safer, and enjoyable for the occupants.


With autonomous driving, we’re arriving at a point where we can define a new paradigm that refocuses how the passenger conducts and uses their transportation time. Observing what happens outside of the car, for instance, moves from being a requirement to a choice. You don’t have to look outside the window any longer. You can — if that’s what you want to do. But you really don’t have to concern yourself with what you see outside. It’s like being an airline passenger looking out the window. You can look out the window but do you really need to?


Think about the “cockpit” space that’s now allocated in vehicles for the purpose of giving drivers information they need to make decisions. You can repurpose all of that from a driver-passenger perspective to a connected user perspective. You will be able to provide people display space that allows them a more productive use of information that they may need to go about their day. While the purpose of the car doesn’t change — it’s still a transportation system — this new concept of how to offer a convenience-oriented autonomous vehicle to the occupant(s) is different.

For more stories, please visit our page on Medium.com, https://medium.com/drive-publication

About Nissan Motor Co., Ltd. 
Nissan is a global full-line vehicle manufacturer that sells more than 60 models under the Nissan, Infiniti and Datsun brands. In fiscal year 2015, the company sold more than 5.4 million vehicles globally, generating revenue of 12.2 trillion yen. Nissan engineers, manufactures and markets the world’s best-selling all-electric vehicle in history, the Nissan LEAF. Nissan’s global headquarters in Yokohama, Japan manages operations in six regions: ASEAN & Oceania; Africa, Middle East & India; China; Europe; Latin America and North America. Nissan has been partnered with French manufacturer Renault since 1999 and Mitsubishi Motors since 2016 under the Renault-Nissan Alliance.

China’s Answer to Tesla Is Hopeful Entrant to Global Car Market

The New York Times, January 26, 2017

Lu Qun, chairman of Qiantu Motor, in Beijing in December.

by Michael Schuman

BEIJING — On a windswept lot near Beijing’s main airport, Lu Qun talks up the electric sports car he hopes will transform him into China’s Elon Musk.

“This is a real performance car,” the entrepreneur boasted of his sleek, gray-and-black Qiantu K50. “It’s fun. You can feel the quality. You’ll love driving this car.”

For Mr. Lu, 48, the roadster is his best chance to make it big. After a lifetime of obscurity creating vehicles for other companies, the bespectacled engineer is betting that the rise of electric cars will propel his company — and his country — into the automotive spotlight.

“Traditional auto manufacturers are constrained by their old models,” he said. “We can see things with fresh eyes.”

Across China, government officials, corporate executives, private investors and newcomers like Mr. Lu are in a headlong rush to develop a domestic electric car industry. The country’s goal, like Mr. Lu’s, is to capitalize on the transition to electric to turbocharge the country’s lagging automobile sector to become a major competitor to the United States, Japan and Germany.

That has been a goal of China’s industrial planners for decades, as the government has lavished resources on building homegrown automakers and discriminated against foreign players.

But so far, that effort has failed.

Local manufacturers have lacked the brands, technology and managerial heft to outmaneuver their established rivals, either at home or abroad. Chinese consumers have preferred more reliable Buicks, Volkswagens and Toyotas to the often substandard offerings from domestic manufacturers, while little-known Chinese models have struggled to gain traction overseas.

Electric vehicles could offer a second chance — one China’s policy makers do not intend to miss.

They targeted electric cars for special support in an industrial policy called “Made in China 2025,” which aims to foster upgraded, technologically advanced manufacturing. By 2020, Beijing expects its automakers to be able to churn out two million electric and hybrid vehicles annually — six times the number produced in 2015.

This time, China’s carmakers may be better positioned. Since electric vehicles are a relatively new business for all players, Chinese manufacturers and international rivals are largely starting from the same point.

“There is a smaller gap between where China is today and the rest of the world” in electric cars, said Bill Russo, managing director at Gao Feng Advisory, a Shanghai consultancy, and a former Chrysler executive. “There is room for newer start-up companies to dream big in China.”

Mr. Lu is one of those dreamers.

Fascinated by cars since he was a boy, he studied automotive engineering at Beijing’s prestigious Tsinghua University. Upon graduating in 1990, he joined the research and development team at the China-based joint venture of Jeep, then a division of Chrysler.

During his time there, which included two years in Detroit, Mr. Lu came to feel such overseas operations had limited prospects in China — the ventures’ partners would try to balance their interests, and so were slow to develop strategies and make decisions.

So in 2003, he and nine colleagues started CH-Auto Technology Corporation as a specialty research and design shop for the local car industry. Since then, the firm has designed vehicles for some of China’s biggest automakers.

Mr. Lu decided to start manufacturing his own vehicles because of the shift to electric. Since producing electric cars requires new parts and technologies, he believed a small entrant could better compete with these new vehicles than traditional automakers.

“Electric vehicles won’t just replace cars with conventional engines, but they will bring a huge change to the entire car industry,” Mr. Lu said. “We wanted to be part of this revolution.”

The result is the K50. Designed at his research center, the two-seater has a light, carbon fiber exterior and a console stuffed with touch screens. Rows of batteries propel the roadster to a top speed of about 120 miles per hour and carry it as far as 200 miles on a single charge.

No longer content to watch others produce his designs, Mr. Lu is currently constructing a $300 million factory in Suzhou, a city near Shanghai, to manufacture 50,000 cars a year. In all, he expects to invest as much as $1.4 billion into his venture over five years.

He did not specify what the car would sell for, but Mr. Lu intends to price the K50 at the top of the market when it goes on sale this year.

That sets CH-Auto on a collision course with the industry’s flagship: Tesla.

Elon Musk’s company already has an edge. While Mr. Lu is building his business from scratch, Tesla has been established in China since 2013. CH-Auto will have to persuade wealthy customers to plunk down a large sum on an unfamiliar brand — Qiantu — over Mr. Musk’s recognizable models.

Mr. Lu nevertheless remains confident. He argues the sporty K50 will appeal to a more leisure-oriented driver than Tesla’s cars. As a logo, the company has chosen the dragonfly, because its managers believe the speedy, nimble insect has similar attributes to his electric car. To market it, Mr. Lu is considering opening showrooms in major Chinese cities, backed by a platform to sell online.

Elon Musk “is someone I can learn from,” he said. “Tesla has huge symbolic significance because it is the first company to make people believe a business model solely around electric vehicles is possible.”

But, he added, “we are not looking to create the Chinese Tesla.”

When it comes to competing with Tesla, Mr. Lu can count on ample help from the Chinese government.

To bring down costs and spur demand, the state has unleashed a torrent of cash. It has offered subsidies to manufacturers and tax breaks for buyers, and plowed investments into charging stations to make electric cars more practical.

In all, UBS Securities estimates that the government spent $13 billion promoting electric vehicles in 2015 alone. So far, Mr. Lu has financed the K50 through loans and injections of fresh capital, but says he “won’t refuse” government subsidies if they become available.

Some analysts fear the state’s largess could prove as much bane as boon.

China may be recreating the waste and excess in electric cars that has plagued other state-targeted sectors, like steel and renewable energy, without spurring the technological innovation the economy needs to compete. And even though China’s car market is the world’s biggest, it is still unlikely to absorb all of the electric vehicle projects underway today.

“They are fueling overcapacity, with a lot of wasted money, and I’m doubtful that in the end you’ll have a successful electric car industry,” says Crystal Chang, a lecturer at the University of California, Berkeley who studies China’s auto industry policies.

Significant sums have already been squandered. In September, the Finance Ministry fined five companies for defrauding the government of $150 million by fabricating sales of electric vehicles to obtain more subsidies, and several companies have failed to make an impression.

Mr. Lu is certain, however, that the K50 stands out in a crowded field. The car has already gotten some advance buzz; a review on one popular Chinese website praised its design as “beautiful” and “avant-garde” and its body as “very muscular.”

“A big advantage they have is their knowledge of what it takes to build a quality vehicle,” said Jack Perkowski, managing partner of the Beijing-based consulting firm JFP Holdings and a veteran of China’s car sector. “They have a better chance than many others because of that.”

Mr. Lu is counting on it.

“There are a lot of electric vehicle companies and hot projects attracting a lot of money,” he said. “Not every company and not every car will be successful.”

Perspectives on the Future of Mobility and Autonomous Driving

by Bill Russo

I recently attended the Consumer Electronics Show in Las Vegas, where traditional automakers, suppliers and several technology firms were showcasing their vision of the future of mobility.  Of particular interest were the many demonstrations and announcements related to autonomous vehicles.  Early forms of this technology are finding their way into commercial applications in the form of “assisted driving” features which incorporate cameras and radar/lidar to provide the car an extra set of eyes to sense its surroundings and inform the driver of risks.  Rapid advancement of technologies needed to fully automate the driving process is also evident, indicating that robotic forms of transportation will be possible within at least 2 industry product cycles (5-10 years).

The following is a Q&A which offers a perspective on the future of mobility and the design and function of autonomous vehicles.

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  1. The Autonomous Driving (AD) era will allow for an entirely new driving experience for drivers and passengers.  How much of an impact will AD technology have on the comfort and convenience of driving?

Autonomous Driving will completely redefine the comfort and convenience of transportation.  In our current paradigm, comfort is designed around the driver and occupants in an externally focused manner:  with eyes to the road.  The space around the front seat occupants – both driver and passenger – is oriented to the information needed to manually drive the car to its destination. Autonomous vehicles will experience fewer accidents, over 95% of which are attributable to human error.  Cars can therefore be lighter, with less structure without compromising occupant safety.  Traffic jams will be less common since autonomous vehicles will be able to leverage vehicle-to infrastructure and vehicle-to-vehicle connectivity in order to avoid congestion and smooth the flow of traffic.

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  1. When you look back at the public’s embrace of big technology shifts – trains or commercial aviation for instance – to what extent was that shift motivated by the convenience of the new mode of transportation?

Convenience always shapes our choices when it comes to transportation.  Human beings are inherently explorers and some of history’s greatest inventions – wheels, bicycles, steamships, trains, cars, and airplanes – have allowed us to be mobile over greater and greater distances.  Over time, each of these inventions added more and more convenience-oriented features to make the experience of mobility more “painless”.  Mobility devices are themselves a convenience which allow us to get where we want to be without walking.  All forms of public and privately-owned transportation are solving this basic problem of minimizing our travel time.  Each solution became commercially viable by offering a benefit versus other forms of transportation that some people were willing to pay to either use or own.  For example, trains reduce travel time across a country from months to days, and commercial aviation reduced this to hours.  We can now circle the world by jet in a little more than a day, a journey the first explorers could not complete in several years, if they lived to tell the tale.   In recent history, owing to the invention of the internal combustion engine powered car (Carl Benz in 1886), and the moving assembly line (Henry Ford in 1908) the car became the primary means for the average person to satisfy their daily commuting needs.  In the increasingly urbanized world of the 21st century, we will experience the next evolution in convenient human mobility:  personalized, autonomous mobility on-demand.

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  1. What are some ways in which the Advanced Driver Assistance Systems (ADAS) technology already in the market, like cruise control, is increasing comfort and convenience for drivers and passengers?

Such technologies act as “support” systems for drivers which allow more tasks to be “delegated” to the car.  For example,  cruise control allows a driver to focus less on maintaining a constant speed and thereby improves the driving experience.  Routine or mundane tasks like parking or adjusting speeds while driving on highways are already becoming mainstream.  Lane departure warning, parking assistance, and cruise control are features that allow the driver to focus less on routine tasks and focus on the actual experience of driving.  Over time, the number of tasks that can be handled by the “smart car” will increase in order to reduce “pain points” of driving and making the overall experience more convenient, safer and therefore more enjoyable for the occupant.

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  1. In addition to the advantages of existing ADAS and autonomous driving technologies, what are consumers most focused on when it comes to comfort and convenience of fully autonomous vehicles?

With Autonomous driving, a new paradigm can be established to re-focus the passenger on how to productively use their transportation time.  Observing the outside of the car moves from a requirement to a choice – especially for the user of a mobility service.  Space that is allocated to providing driver information can be repurposed from a driver-passenger perspective to a “connected user” perspective.  Beyond mobility, a fully autonomous vehicle’s key benefit will be the experience it gives to the user, and the primary benefit which comes from delegating the task of driving to the car is PRODUCTIVE TIME.  As such, while the purpose of the car as a transportation device has not changed, the very concept of how to treat and offer convenience-oriented features to the occupant is different:  the autonomous vehicle is built with a “user-centric” mindset, as opposed to a “driver-centric” mindset.

An autonomous car, especially one used in longer-distance (>10km) commuting distances will need to be able to transform travel time into productive time through convenient services which may include infotainment (watching news/video, gaming), online communication (social networking, e-mail, conference calls), or online-to-offline services (discounts or promotions based on mobility patterns).  In the world of personalized, autonomous mobility on-demand, the car essentially becomes a connected rolling space that transports us between the places we live, work, and play.

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  1. What Autonomous Driving feature will consumers be most surprised by and also what core functionally will they gravitate to most?

For people born in the late 20th century, it will be difficult to reimagine this new form of mobility.  Most of us from this period see a car through a nostalgic lens:  our most prized possession outside of our home, and the one that we can take with us to showcase our lifestyle and aspirations.  For many, this will never change.

However, mobility is being revolutionized by digital technology.  The rapid emergence of ride-hailing services such as Uber, Lyft, Ola, and Didi Chuxing are transforming the car into a transportation service device.  It is in this mode that we can see a great fit for autonomous forms of mobility – as the operators of such services will benefit from not having to incur the cost of a driver, along with the lower maintenance and repair cost of autonomous vehicles.  Users of such services expect to be driven and are not seeking the driving experience in any case.

The most surprising aspect of this type of vehicle will be that it affords its users the opportunity to turn inward and use their time productively.  Future cars used for short commuting will be smaller and occupy less physical space:  they simply pick people up and drop them off and do this with minimal “extras”.  These will be summoned by an app on a mobile device.  Longer commuting will be done in autonomous vehicles which have spaces designed to address the productivity needs of the occupants:  with connectivity and consumption of content at the core.  Such cars may be booked or offered through a “subscription model” to give the users some flexibility in the service offering.  The shift in this paradigm will surprise people the most since these vehicles will be designed from a pure passenger experience perspective which will include how to entertain or delight the user during the journey.

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  1. Self-parking, one of the earlier semiautonomous features, is now found on many mainstream models and widely used by drivers. Do you think the public will adopt more complex autonomous features or a fully autonomous vehicle in the same manner?

The commercialization path for more complex and fully autonomous driving will be very different than what we seen so far.  In the current owner/driver-centric business paradigm, new features have to be sold to customers who accept the value proposition of the technology and are willing to pay for it.  Early-stage technologies typically come with a heavy price premium and are typically introduced to “premium” brands where customers are less price sensitive.  However, barring regulatory intervention, this will likely limit adoption of technologies including electric and autonomous vehicles as there are cheaper alternatives (conventional engines and human drivers).

The game-changer for both electric and autonomous vehicles comes from the convergence of On-Demand Mobility (ODM) with electric and autonomous vehicles.  ODM players, such as Uber and Lyft are highly investing in autonomous vehicles as a means of lowering their operating costs and unlocking the potential to participate in the Digital ecosystem through offering the users of its services access to content and O2O services.  This will create a new pathway to commercializing and scaling up the autonomous driving technology in a way that has not been seen before:  as we have seen with other “smart devices”, hardware innovation is backed by the digital ecosystem and thereby eventually becomes mainstream for everyone.

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  1. Since road conditions vary globally, will perceptions of comfort and convenience vary by country? For example, will it permeate places like Amsterdam where many travel by bicycle or public transportation already?

Comfort and convenience are solutions to mobility “pain points”, and the degree to which people experience these pain points varies greatly based on where we live.

Mobility pain is much higher in densely populated urban cities like New York, London, Paris, New Delhi, Mexico City and virtually all major cities in China.  The driving experience in highly urbanized countries like China can be horrific.  Cities like Beijing experience gridlock conditions at several times during a day, and suffer from severe environmental impact from the tailpipe and other emissions.  Electric and autonomous mobility on demand would be a welcome solution to address these mobility pain points.

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  1. From a societal perspective, how will AD technology change the way individuals get to and from their various destinations?

Adoption of autonomous driving technology will improve flow of traffic, reduce accidents and improve the quality of life in an increasingly urbanized world.  Scaling up this technology through the convergence of ODM with electric and autonomous vehicles in these cities will accelerate a transition from a transportation model where we own an under-utilized asset that is used 1-2 hours per day to a model where autonomous cars, directed by a smart-city transportation grid, are deployed on demand to where they are needed.  This is a far more efficient system where we will witness a shift from ownership of hardware toward paying for the utility that is derived from the hardware.

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  1. When it comes to commuting, how will AD technology ease the problem of extensive traffic jams in cities like Beijing or Los Angeles?

Autonomous vehicles deployed by on-demand mobility services fleets will be able to communicate with each other, and will be directed to and from users and their destinations by a Smart City transportation network.  These cars will be highly utilized assets, which minimizes the amount of city space which needs to be allocated for parking lots for cars which sit idle for more than 22 hours a day.  Cars can be routed around the traffic, minimizing the traffic jams that define the life of residents of cities like Los Angeles and Shanghai.  Smart, connected, and autonomous mobility devices backed by advanced algorithms used to govern the mobility patterns will improve the livability of cities in an increasingly urbanized world.

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  1. Besides the impact AD will have on productivity, how else will it improve lives for people outside of transportation?

Autonomous driving will have a tremendous impact on our environmental footprint.  The technologies required to power and govern a network of personalized, electric and autonomous mobility on demand (A-MOD) have the potential to transform the lives of people all over the world.  For example, these increasingly electric-powered vehicles will be also be part of the energy storage grid, we could very well moderate energy consumption and potentially shrink our carbon footprint.  Transportation innovation has reshaped the history of mankind, and the transportation revolution of the next decade will set the course and has the potential to improve the lives of all generations to follow.

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Bill Russo is the Managing Director and Automotive Practice Leader at Gao Feng Advisory Company, based in Shanghai.  He has 30 years of automotive industry experience and has lives and worked in China since 2004.  He was formerly the leader of Chrysler Group’s business in North East Asia.

Bill Russo to Chair the Connected Mobility ROADSHOW Conference

Shanghai, China, December 1, 2016

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Bill Russo, the Managing Director and Automotive Practice leader at Gao Feng Advisory Company will  chair the Connected Mobility Roadshow conference in Shanghai – hosted by Messe Frankfurt.

The main players in the mobility industry are currently re-evaluating their positions, for connected mobility promises huge potential: by 2020, the market for interconnected cars is expected to have increased by 45% – ten times the growth of the general automobile market. It is estimated that in five years, three quarters of all new cars will be able to connect, and, from 2025, autonomic driving could be possible outside of protected areas.

Disrupting the Disruptors: The Merger Of Uber China And Didi Chuxing

Forbes, August 8, 2016

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I co-authored this article with my colleague Edward Tse, CEO of Gao Feng Advisory Company

On August 1st, Didi Chuxing (Didi)and Uber China announced a plan to merge their businesses in China, effectively placing Didi in control of their combined ride-hailing business for the China market.  This deal has attracted a great deal of attention since the announcement, raising a number of critical questions which we address in this article, including:

  • Did the China government play any role in the merger?
  • Can foreign tech companies compete in China?
  • Did Uber China win or lose?
  • Could Uber China ever have become a dominant player in China if it decided to press ahead?
  • What will this deal mean to Uber and Didi’s global strategies?

China has become the epicenter of a disruptive wave of digital innovation, and the rapidly evolving landscape of partnerships for mobility services is a clear indication of this.  For sure, we can look forward to even more exciting developments in the future.

Click here to read the article at Forbes.com

Uber-Didi Merger Has Chinese Consumers Worried

The Sixth Tone, August 2, 2016

A passenger holds a smartphone showing the Didi Chuxing application, Shanghai, May 22, 2016. Qilai Shen/Bloomberg via Getty Images/VCG
A passenger holds a smartphone showing the Didi Chuxing application, Shanghai, May 22, 2016. Qilai Shen/Bloomberg via Getty Images/VCG

by Fan Yiying

After a prolonged price war for ride-hailing customers, Chinese market leader Didi Chuxing and its biggest rival Uber merged on Monday. Now, passengers are worried this will mean a quick end to heavily discounted trips.

Shanghai native Ma Yanyan, 29, rides with either Uber or Didi to work every day. She told Sixth Tone that she has noticed Uber is sending fewer coupons to its users. “As a consumer, I’m very realistic,” she said. “I’ll go back to taking taxis once Uber raises its prices.”

Wang Mengyan, 25, is a frequent user of ride-hailing apps, and she is afraid the merger will mean higher prices. “As a consumer,” she told Sixth Tone, “we want to see competition between Didi and Uber so that we can enjoy the best discounts.”

Yang Mengyi, 28, told Sixth Tone she spends about 150 yuan (about $22) on Didi every week, but that she thought the merger wouldn’t have much of an impact. “Taxis will always be another option,” she said, adding that she prefers cabs because they are more strictly regulated.

Online, many net users echoed Yang’s opinion, saying that if prices rise too high, they will just go back to using regular taxis. News of the merger — and the possible end of discounted fares — has cab drivers delighted.

Chen Yugang, a taxi driver in the northern coastal city of Tianjin, expressed his relief after Monday’s news. He told Sixth Tone that he used to earn about 5,500 yuan per month before the emergence of car-hailing apps. His current monthly income has decreased to less than 3,000 yuan. “Why would passengers take a cab and pay me 20 yuan when they can ride with Uber for as low as 5 yuan?” he said.

Chen said that companies like Uber have disturbed the market, and he hopes the merger will bring consumers back to traditional taxis.

Bill Russo, an automobile consultant at Gao Feng Advisory Company in Shanghai, told Sixth Tone he estimates pricing may move somewhat higher after the merger, but that “it can’t be much higher for the simple reason that ride hailing services need to compete with taxis.” He added that, to Uber and Didi, the real purpose of the merger isn’t to increase prices, but to decrease costs in the form of incentives given out to passengers and drivers in order to win market share.

Full-time Shanghai-based Uber driver Xing Zhiwei told Sixth Tone that the news of the merger has him concerned. “In less than a year, the allowance for 12 rides has dropped from 150 yuan to 40 yuan,” said Xing, adding that he fears such driver subsidies will drop even further.

Zhuang Chunhui, a communications manager for Uber China, told Sixth Tone on Tuesday that the incentive policy for drivers will not change after the merger. She said that the amount of subsidies varies in different cities at the different times. “The discounts we offer to our users will also change from time to time,” she added, “but this has nothing to do with the merger either.”

Wang Mingze, a public relations manager for Didi Chuxing in Shanghai, said the merger will enable the company to increase the efficiency with which it accepts orders, and that this “can eventually increase the drivers’ incomes.” As for passengers, Wang said price is just one part of the service. “What’s more important is whether users can book the car and enjoy a comfortable ride whenever they want,” he said.

Additional reporting by Wang Lianzhang.

Click here to read the article at sixthtone.com

Tencent-Backed Company Aims to Launch Smart-Electric Cars Before 2020

 The Wall Street Journal, July 12, 2016

Tencent-Backed Company Aims to Launch Smart-Electric Cars Before 2020 - WSJ Safari, Today at 1.01.49 PM

A BMW electric car at a Beijing car show in April; Future Mobility has hired about 50 engineers from car makers including BMW for its smart-electric-vehicle project. PHOTO: REUTERS

Chinese auto startup Future Mobility seeks eventually to sell several hundred thousand luxury vehicles a year

BEIJING—An auto startup backed by internet giant Tencent Holdings Ltd. plans to start selling premium electric cars globally by 2020, joining other Chinese car makers in taking aim at an increasingly crowded luxury market.

Four month-old Future Mobility Corp. seeks eventually to sell several hundred thousand fully electric, highly automated, China-built vehicles a year. The company is also backed by Chinese luxury-car dealer Harmony New Energy Auto and Foxconn Technology Group, which assembles iPhones for Apple Inc. Apple has been working on its own autonomous electric car.

Deep-pocketed tech companies have backed a wave of new auto companies in China, where a drive to cut fuel consumption and pioneer the auto industry of the future has encouraged startups. Analysts, citing increasing competition and uncertainty over a subsidy-fueled boom in electric vehicles, question how such ambitions can be turned into reality.

“Our target is to create the first Chinese brand which is premium and internationally successful,” Carsten Breitfeld, chief executive of Future Mobility, told The Wall Street Journal in an interview on Tuesday. He said the company aims to sell cars in China, Europe and the U.S. and to compete with Audi AGBMW AG and Daimler AG’s Mercedes-Benz, which combine for three quarters of China’s luxury-car market.

The company will soon complete its first round of fundraising, Mr. Breitfeld said.

Last year China’s industrial regulator amended rules to allow nonautomotive companies to invest in the electric-car industry, which Beijing has subsidized to the tune of tens of billions of dollars.

Internet giants jumped right in. China’s annual motor show in April showcased smart vehicles powered by software from online-shopping company Alibaba Group Holding Ltd. and search provider Baidu Inc. Last month, a Baidu executive said that the company plans to mass produce a driverless car within five years.

Tencent, China’s biggest social-network company, has a research team working on technology that can be used in automated cars, according to a person familiar with the matter. For now, its involvement in Future Mobility—beyond its minority stake as a financial investor—is limited, the person said.

Tencent is an investor in another electric-car maker, NextEV Inc., whose other backers include Sequoia Capital.

The companies are poaching talented engineers from global auto and technology giants, and setting up research centers in the West. Future Mobility has hired 50 engineers from BMW, Mercedes-Benz, Tesla and Google.com. Within 12 months it will have about 600 engineers globally, said Mr. Breitfeld, formerly the project manager for BMW’s i8 plug-in sports car.

He said the company will either build its own plant or partner with an existing auto maker to assemble cars. It has research and development units in Munich and Silicon Valley and is building its headquarters in Shenzhen, where Tencent is based.

Some analysts question how quickly such a new company can achieve its aims. “Several hundred thousand premium cars from an unknown brand sounds like a stretch,” said Bill Russo, managing director at Gao Feng Advisory Co. and former head of Chrysler’s North East Asia business. “Building a brand and competing with the likes of the premium car makers is very difficult. And the competition will not stand still.”

Robin Zhu, a senior analyst at U.S. research company Sanford C. Bernstein, noted that demand for electric vehicles in China is minimal except in big cities where they’re exempt from certain restrictions that apply to their gasoline-fueled counterparts.

The number of electric and hybrid cars and buses sold in 2015 was four times that of a year earlier—but at 331,000 vehicles was a small, subsidy-driven tally in a market where total sales exceeded 24 million.

Alibaba, SAIC Motor launch internet car Roewe RX5, SUV with YunOS operating system

CNBC, July 6, 2016

BillCNBC

Click here to watch the video

Two of China’s biggest household brands have teamed up to create what they call “the world’s first mass-produced car on the internet.”

E-commerce giant Alibaba and SAIC Motor, the country’s biggest car manufacturer, will launch the Roewe RX5 on Wednesday, a sports utility vehicle (SUV) featuring smart technology from Alibaba’s operating system YunOS. First unveiled at the Beijing Auto Show in April this year, the RX5 is reportedly YunOS’ first auto partnership.

YunOS was created in 2011 and is used by several prominent Chinese smartphones brands, including Meizu and Duowei.

In April, Alibaba said YunOS was the third-biggest operating system (OS) in the world with 40 million users as of 2015, adding that it would soon replace Apple’s iOS as the second biggest in the mainland, according to local media reports at the time. Google’s Android remains China’s most popular OS.

Connectivity, electric power and autonomous driving were the three principal themes for the auto market as it increasingly merged with the internet industry, Bill Russo, managing director at Gao Feng Advisory Company, told CNBC’s “The Rundown“.

The RX5 is a clear example of how car makers are employing big data to improve driver’s daily needs and mobility habits.

SAIC and Alibaba have promised that the car’s data capabilities would transform stressful driver experiences, such as negotiating traffic or undertaking maintenance, into enjoyable moments.

“The RX5 will be able suggest alternate routes in the case of road closures or traffic as well as a more personalized experience in the car,” Russo said.

Already the world’s largest car market, China is set to become a key adopter of these trends, but there’s already heavy competition to win the hearts of mainland consumers.

Apple’s recent $1 billion investment into ride-hailing app Didi Chuxingled many to question whether the two companies would produce an internet-based vehicle, while South Korea’s Kia Motors has partnered with Google to tap the latter’s Android Auto operating system. Meanwhile, Chinese online video firm LeEco has developed a self-driving concept car, called the LeSEE.

In fact, the real rivalry in the car market was no longer between car makers, Russo said.

“It’s a battle for the connected-car operating system,” he said, pointing to YunOS, iOS and Android Auto as examples.

When it came to China, Alibaba and SAIC’s biggest competitor was Apple, he added.

Apple’s investment in Didi was a strategic move to position a potential Apple car in China, Russo continued, noting that while Google had invested in Uber, it was not a threat because the search engine remains blocked in the mainland.

—Follow CNBC International on Twitter and Facebook.

CORRECTION:

This report has been updated to reflect that YunOS is an operating system, while Aliyun is a cloud computing system.

Click here to read the story at CNBC.com

Bill Russo to Deliver Keynote Speech at Electric & Hybrid Vehicle Technology Conference

Novi, Michigan, September 13-15, 2016

TBS&EVT 2016 overview.pdf (page 1 of 3) Preview, Today at 3.32.03 PM

Bill Russo will be a keynote speaker at the plenary session of the Electric & Hybrid Vehicle Technology Expo (Day 1, Track 1) on September 13 in Novi, MI on the topic China Drives the Future of Personal Mobility.

 

China’s Path to Electrification vDraft6 Microsoft PowerPoint, Today at 3.38.27 PM

Topic Outline: 

  • China has emerged as the world’s largest automotive market since 2009 and remains the growth engine of the global automotive industry.
  • The world has entered a new era since 2008, with over half of the world population now living in cities, and this increasingly urbanized world challenges the established set of paradigms for personal and commercial transportation, especially in the densely populated urban centers in China.
  • The unique context of China’s urban transportation challenge, the high rate of adoption of mobile device connectivity, combined with the rapid and aggressive introduction of alternative mobility and ownership concepts will compress the time needed to commercialize new and innovative solutions and business models for personal urban  mobility
  • Shaped by several forces, China is already the largest EV market in the world and will continue to grow exponentially.  Several scenarios will be described that are shaping the market dynamicsgovernment policies, and competitive landscape.

Click here to view the conference flyer:  TBS&EVT 2016 overview

Click here to view the Day 1, Track 1 Agenda

Bill Russo to Chair Panel Discussion on the Internet of Vehicles at TechCrunch

Shanghai, China, June 27, 2016

Venue:
West Bund Art Center
2555 Longteng Ave, Xuhu

Time:  11:10-11:40am

The Big Data Behind the Internet of Vehicles

TechCrunch_Shanghai_2016___TechCrunch

The traditional automotive industry, where technology innovation has primarily been focused on powertrain and safety systems, must now contend with new forms of mobility services that are transforming the manner in which we experience the product.   The particular conditions of urbanization, an ever-expanding middle class population, pollution, and congestion are uniquely challenging in China, which may create opportunities for innovative new mobility solutions for China.

The conventional hardware-centric, sales-driven, asset-heavy and ownership-based business model with sporadic customer interactions is now competing with a connected, on-demand, and often personalized mobility experiences.  This new form of “connected mobility” is driving new technologies in the world of navigation, analytics, driver safety, driver assistance and information virtualization.

Innovations such as these, originating from both traditional OEMs and new mobility solutions platforms, many of whom are Chinese, could pave the way to a an entirely new business model for China’s auto industry.

Panel Members:

Dr. Markus Seidel, Vice President, BMW Group Technology Office China

Ms. Celine Le Cotonnec, Head of Connected Services, Digital and Mobility for PSA Peugeot Citroen China

Mr. Bevin Jacob, Head of Business Development, APAC, Continental Intelligent Transportation Systems

Moderated by:

Mr. Bill Russo, Managing Director, Gao Feng Advisory Company