China a lifeline for EV makers

Automotive News, March 14, 2016

New-energy push bolsters investment

by Alysha Webb

In 2013, Mike McQuary, CEO of Wheego Electric Cars, was in a bind. The maker of small electric vehicles needed expansion funds.

But with high-profile electrified vehicle makers like Fisker and Coda struggling, the appetite in the U.S. for investing in electrified vehicle makers was slight.

Since he was visiting China regularly to work with suppliers, McQuary made an appointment with GSR Ventures, a venture capital company based in Beijing. It was a good move. GSR now helps fund Wheego.

“They have a long-term view of the new-energy sector and EVs in particular,” McQuary says of his Chinese investor.

Despite early optimism in the U.S., the market for EVs and the technology that goes into them never has really taken off. In 2015, U.S. sales of plug-in hybrids and EVs actually dropped 5.2 percent to 116,099 units, according to Inside EVs.

Government support for the sector has remained tepid. That has left companies that bet on steady growth in demand for electrified vehicles struggling to survive.

In China, however, the government remains committed to growing plug-in hybrid and EV production and sales. That has given Chinese investors and Chinese companies the confidence to sink millions of dollars into U.S. companies with electrification technology.

China a lifeline for EV makers Mail, Today at 10.37.31 AM

FDG Electric Vehicles, a Chinese company, built a 2.6 million-square-foot plant in China to produce medium-duty electric vans through its joint venture with Smith Electric Vehicles. The JV, called Prevok, plans to launch the vans in the U.S. this year.

Photo credit: PREVOK PHOTOS

Focus on China
Often, Chinese investors want to focus on the China market.

GSR was “happy to invest in us as long as we turned our eyes to China,” McQuary says.

Though it has dealers and sales in the U.S., the Atlanta-based company now focuses on selling its small EVs — used by municipal governments, at airports and as delivery vehicles — in China.

He can’t discuss sales volume or where the vehicles are manufactured, McQuary says. But the company is still in business, which it might not have been without the Chinese investment.

“China seemed like a much bigger chance for Wheego to be a big success,” he says. “The subsidies they offer over there, and the government support and pressure for EVs to be successful, really trumps what they are doing in the U.S.”

Smith Electric Vehicles also found a savior in China. The Kansas City, Mo.-based company manufactures medium-duty, commercial EVs. It sold around 800 EVs in the United States from 2010 to 2014 to customers including DHL and Coca-Cola, but it couldn’t make money at such low volumes.

It needed cash and a bigger market so it could scale up. That came from Hong Kong-listed FDG Electric Vehicles, a Chinese company with two EV manufacturing plants in China as well as battery production and r&d operations. Smith, whose electric vans have logged millions of miles on U.S. roads, could provide added EV manufacturing expertise.

The Chinese company “had the resources, the money, the engineers [and] the government support, but they had no practical working knowledge” of how to produce an EV, says Bryan Hansel, former CEO of Smith.

China-U.S. joint venture
In 2014, FDG invested some $20 million directly in Smith, says Hansel. Then in May 2015, it invested another $15 million to form a joint venture, named Prevok. Hansel is Prevok’s CEO.

The JV is producing a jointly designed, medium-duty electric van at a 2.6 million-square-foot plant in the east China high-tech hub of Hangzhou. Prevok plans to launch the van in the U.S. this year.

It will be imported initially, moving to local production as volume increases, Hansel says. Demand eventually will be global, he predicts.

Smith likely would not have had the luxury of such an undertaking if it worked with U.S. investors, Hansel says. With FDG, “they said, “Get started guys, and have fun.'”

The Chinese government’s consistent financial support and policy push for development and sale of plug-in EVs underpins Chinese investors’ longer-term view.

China has declared that it will have 5 million “new-energy” vehicles — a category including battery-powered EVs, plug-in hybrids and hydrogen fuel cell EVs — on the road by 2020. In practice, the recent focus has been on battery-powered EVs.

“In China, I went from a period of no interest to one of a lot of interest.”KY Chan
CEO, Protean Electric

China’s central and local governments have combined to offer consumers subsidies that can surpass the equivalent of $16,000 per vehicle.

That is more than half the price of the best-selling plug-in hybrid EV in China, the BYD Qin PHEV, which starts at the equivalent of $31,192. The best-selling pure EV in China, the Kandi Panda, costs $23,139, says Yale Zhang, managing director of consultancy Automotive Foresight in Shanghai.

In the U.S., federal subsidies top off at $7,500. Some states offer additional subsidies.

The Chinese government’s largesse is not bottomless, however. Subsides for electric passenger vehicle purchases are scheduled to decrease, ending in 2021.

And despite subsidies, Chinese drivers have not enthusiastically embraced EVs. The lack of charging stations is one reason.

Sales of EVs did surge in 2015, however, more than quadrupling to 331,092 vehicles.

The growth in sales was largely due to local government purchases, says Zhang.

The central government in Beijing ordered Chinese cities to meet new-energy vehicle purchase targets, he says. That caused a surge in production and sales. The percentage of new-energy vehicle sales accounted for by commercial vehicles rose to 45.5 percent in 2015 from 38.4 percent in 2014, according to Automotive Foresight.

Also, Beijing in February ordered local governments to make 50 percent of all new fleet vehicle purchases new-energy vehicles, up from a 30 percent mandate.

There are other possible policy boosts for passenger EV sales. On-demand ride-hailing companies are growing quickly in China. Didi Kuaidi, China’s largest, completed 1.43 billion rides in 2015.

At some point, Beijing will require those companies to use EVs, predicts Bill Russo, a managing partner at Gao Feng Advisory Co. in Shanghai.

“If you want a higher penetration and market share of electrification, you can require these on-demand companies to electrify their fleets,” he says. “I can see a quick acceleration of electrification.”

47-mpg target
Regardless of demand, automakers in China will need to produce EVs to meet fleet fuel economy mandates, which call for 5 liters of fuel consumed per 100 kilometers driven, or 47 mpg, by 2020.

KY Chan, CEO of Protean Electric Inc., says that is one reason he found a lot of interest in China for his company’s in-wheel electric-drive systems. Protean, which has offices in Troy, Mich., the U.K. and Shanghai, has investors including GSR and Jiangsu New Times Holding Group, located in eastern China.

“No matter what, even if they are losing money [producing EVs], the OEMs will have to produce a number of new-energy vehicles in order to lower the overall [fuel economy] below 5 liters,” Chan says.

The central government’s EV push has made China a fertile market for fundraising. “The amount of resources flowing into [the EV sector] is just unimaginable,” he says. “In China, I went from a period of no interest to one of a lot of interest.”

Chan figures Chinese investors have a stronger stomach for the cash burn rate of a startup like Protean. It has talked to U.S. companies about being acquired, but “we would become a burden to their balance sheet,” he says.

Perhaps the highest-profile Chinese investment in U.S. electrification companies is Wanxiang’s acquisitions of battery-maker A123 Systems and luxury plug-in hybrid manufacturer Fisker Automotive, renamed Karma Automotive.

Privately owned Wanxiang Group Corp., one of China’s largest automotive suppliers, comes from a very traditional background; it got its start producing driveshafts and roller bearings.

Why did it acquire the two U.S. companies?

“China is committed to producing more and more electric vehicles,” says Pin Ni, president of Wanxiang America Corp. “Wanxiang wants to participate in that growth, and we saw an opportunity to do so by acquiring A123 and Fisker.”

If Wanxiang hadn’t acquired Waltham, Mass.-based A123 in 2013, says CEO Jason Forcier, “the technology would have been sold off to the highest bidder.”

Instead, Chinese ownership enabled A123 to double its capacity, and the company is generating positive cash flow, Forcier says.

A123 is focusing on low-voltage batteries and working with all the major European automakers on 48-volt systems. But China still accounts for a big chunk of the battery-maker’s growth.

“That speaks to the focus of the Chinese government to incentivize these vehicles,” says Forcier. “We haven’t seen that in the U.S.”

“A lot of trust’
Wanxiang acquired A123 customer Fisker, whose problems imperiled A123, in 2014, paying $149.2 million. Wanxiang beat out Hong Kong investor Richard Li, who also was bidding for the electric automaker. The now-Karma Automotive is trying to revive itself from a headquarters in Southern California.

Karma sees the most opportunity in China, which is the world’s largest luxury car market. But it will sell cars in the U.S., as well, says Chief Marketing Officer Jim Taylor.

That kind of U.S. presence is important. Chinese consumers know their country’s long history of shoddy and copied products. Plus, China’s early EV efforts often focused on low price rather than high quality.

“You need to bring in technology that has been certified as non-Chinese,” Gao Feng’s Russo says.

Even in luxury-hungry China, Karma could be a tough sell. “Luxury [EVs] do not have strong potential, because rich people need the premium car’s brand first,” Automotive Foresight’s Zhang says.

But Chinese investors don’t mind taking “long bets” on their investments, Taylor says.

Wanxiang Chairman Lu Guanqiu “has put a lot of trust in our executive team,” he says. “If we were American-owned, that rope would be a lot shorter.”

Click here to read this article at Automotive News

Reimagining Mobility in the China Context

Gao Feng Insights Report, February 2016

We are pleased to share with you our paper titled: Reimagining Mobility in the China Context. This article builds on the themes from our previous article titled Digital Disruption in China’s Automotive Industry, and offers a perspective at how the traditional value chain of the automotive industry is being fundamentally transformed by a new wave of “digital disruptors”.

Unlike traditional automotive OEMs and suppliers, these digital disruptors are leveraging mobile internet technology to present new and innovative “Connected Mobility” services to users, and in the process challenging the business model of the automotive industry. The century old hardware-centric business model of individual car ownership and product-based segmentation is transforming into a new form which leverages internet technology to deliver a broader range of services to address mobility needs.  Such changes are happening faster in China than in the rest of the world, where the size and scale of the urban population and the sheer numbers of mobile internet users are much greater than other markets.

In such an environment, China’s Internet giants (Baidu, Alibaba, Tencent) along with mobility disruptors such as LeEco and NextEV are vying to deliver an increasingly connected, electrified, smart and personalized mobility experience.  Coupled with the Chinese government’s regulatory push on new-energy vehicle adoption and sustainable transportation infrastructure, China has demonstrated strong potential to become the breeding ground for the Connected Mobility revolution.   As a result, Automotive OEM and supplier CEOs must learn to reimagine mobility in the China context in order to secure a strong position in this new competitive landscape.

We welcome your comments and feedback on our briefing paper or in general about our firm. We would be glad to meet you in person to share our data and perspectives in a fuller manner. Please let us know if you are interested in meeting and discussing directly how we can help you to operationalize these insights.

Thought leadership is core to what Gao Feng does. We will, from time to time, share with you our latest thinking on business and management, especially as it relates to China and China’s role in the world.

Best Regards,

Bill Russo
Managing Director, Gao Feng Advisory Company
bill.russo@gaofengadv.com

Edward Tse
Chairman and CEO, Gao Feng Advisory Company
edward.tse@gaofengadv.com

Tel: +86 10 5650 0676 (Beijing); +852 2588 3554 (Hong Kong); +86 21 5117 5853 (Shanghai)

China Seen Laying Down $15 Billion Bet on Electric Vehicles

Bloomberg News, December 16, 2015

China to be `epicenter of electrification,’ analyst says

BYD, Zotye among biggest sellers of electric cars in China

China has found electric cars a tough sell even after lavishing consumers with subsidies and privileges. After almost certainly failing to meet a target to have half a million of such vehicles on its roads by year end, its next act is to achieve a 10-fold increase by the end of the decade.

The electric vehicles in service will fall about 26 percent short of its year-end target, according to estimates from the science ministry and state-backed auto association. To meet its 2020 goal of five million EVs, the government will speed up the construction of charging stations, reducing a major inconvenience for urban residents who don’t have personal garages to charge their cars.

“China will be the epicenter for electrification of the auto industry globally,” said Bill Russo, Shanghai-based managing director at Gao Feng Advisory Co., who estimates that China would have invested 100 billion yuan ($15.5 billion) by 2020 on new-energy vehicles.

President Xi Jinping has designated electric vehicles as a strategic initiative in a bid to upgrade the auto industry and create challengers to Toyota Motor Corp. and General Motors Co. The government is increasing spending after signs that the combination of research grants, consumer subsidies and infrastructure investments is starting to yield results. New-energy vehicle production surged fourfold to 279,200 units in the first 11 months, even as oil traded near levels last seen during the global financial crisis.

Local Winners

That has benefited automakers like BYD Co., Zoyte Auto and BAIC Motor Corp., which have led sales of electric cars. BYD, backed by Warren Buffett’s Berkshire Hathaway Inc., would have turned a loss in 2014 and this year if not for EV subsidies from the central government, according to Barclays Plc. Geely Automobile Holdings Ltd. said last month that it would target new-energy vehicles to make up 90 percent of sales by 2020.

The government incentives have lured consumers like Zhang Peng, 30, who decided to buy BAIC’s EV200 electric car after trying without success for two years to win a license plate in the bimonthly lottery held by the Beijing government. EVs are exempt from the ballot, which has worse odds than roulette.

Zhang also received 90,000 yuan in matching grants from the central and local governments, or almost half of the 208,922 yuan sticker price for BAIC’s EV200 electric car. The model costs about 7.5 yuan to run every 100 kilometers (62 miles), compared with an estimated 39 yuan for an equivalent gasoline-powered 1.6-liter Toyota Corolla, according to calculations based on the published fuel-economy rating and Beijing pump prices.

Battery Suppliers

The burgeoning demand has also helped battery suppliers such as South Korea’s Samsung SDI Co. and LG Chem Ltd., which supplies SAIC Motor Corp. and Chongqing Changan Automobile Co. Panasonic Corp. said it is considering building a car-battery factory in China to supply lithium-ion batteries.

Among local component makers, Wanxiang Qianchao Co. and Hunan Corun New Energy Co. have more than doubled in Shanghai trading this year as investors bet the surge in electric vehicle demand will boost demand. BYD has climbed 34 percent this year and Geely Automobile has surged 79 percent in Hong Kong trading, compared with the 8.4 percent decline in the benchmark Hang Seng Index.

Global automakers are beginning to get into the act. Volkswagen AG, the largest foreign carmaker by sales, has said it will introduce 15 locally produced new-energy vehicles in the next three to five years in the country. Ford Motor Co. said this month it’s investing $4.5 billion globally in electrified vehicles.

‘Foreigners Coming’

“In the initial stage it was mainly local automakers competing with each other in the electric-car segment, but now the foreign players are coming,” said Ouyang Minggao, director of the Tsinghua New Energy Vehicle Center. “All kinds of electric cars will be here soon, including plug-in hybrids, which will lead to very big challenges to local automakers.”

The Chinese government is not alone in setting aggressive targets for alternative-energy transportation. President Barack Obama in 2011 called for one million electrified vehicles in the U.S. by 2015, a target that the administration scaled back in March after low gasoline prices reduced the cost advantage of plug-in and hybrid vehicles.

China, though, has stood out in terms of the scale of the state’s financial support. The country has invested about 37 billion yuan into the new-energy vehicle segment over the past five years, according to Gao Feng’s Russo, who estimates the government will devote another 63 billion yuan by 2020.

Funding Plan

The central government released a plan on Wednesday detailing funding for local governments to construct charging facilities, tied to the number of new-energy vehicles they sell.

Automakers will have to play by China’s rules if they want a piece of the market, even if they don’t believe in electric cars. The government has mandated the lowering of average fuel consumption to 5 liters by 2020, from 6.9 liters per 100 km this year.

“There is really no choice for the automakers, if they are required to meet the more stringent emission standards by 2020,” said Steve Man, an analyst with Bloomberg Intelligence. “Other technologies with the stringent emission standards won’t get you all the way to target.”

China Drives the Future of Automotive Innovation

Gao Feng Insights Report, October 2015

We are pleased to share with you a report titled: China Drives the Future of Automotive Innovation.  This new report is the product of a collaboration between Gao Feng Advisory Company and our partners at Tech Mahindra.  Tech Mahindra is a specialist in digital transformation, consulting and business re-engineering solutions, and is is also amongst the Fab 50 companies in Asia as per the Forbes 2014 List.

For global automakers, China represents the greatest opportunity for growth in the 21st century.  Since 2009, China has been the world’s largest market by volume, and will likely surpass 25 million units in annual car sales in 2015.  Over the coming decades, we believe that China will remain the key battleground for dominance of the global auto industry.

However, this battle will not be waged using the conventional automotive technologies which have been refined over the past century.  We believe several driving forces, which are particularly evident China, have the potential to disrupt the status quo of the automotive industry:

  • The unique context of China’s urban transportation challenge, the highpenetration rate of mobile internet, combined with the rapid and aggressive introduction of alternative mobility and ownership concepts, are compressing the time needed to commercialize smart, connected car technology and related services.
  • The automotive value chain is being disrupted by non-traditional players as they enter and compete to deliver mobility solutions.  Disruptive new entrants are utilizing big data to draw insights about customers’ mobility patterns in order to address their “pain points” and offer new solutions for their mobility needs.  Such mobility needs are increasingly being met through on-demand and shared services versus individual ownership.

We believe that the confluence of these forces, along with rapid innovation to address “pain points” associated with mobility in the China context, are positioning China as the catalyst to drive the transformation of the business model and technological underpinnings of the global auto industry.  In this report, we highlight the six themes that are shaping the future of mobility, and describe the key features and functions of future automobiles.

We welcome your comments and feedback on our briefing paper or in general about our firm.  We would be glad to meet you in person to share our data and perspectives in a fuller manner.  Please let us know if you are interested in meeting and discussing directly how we can help you to operationalize these insights.

Thought leadership is core to what Gao Feng does.  We will, from time to time, share with you our latest thinking on business and management, especially as it relates to China and China’s role in the world.

Best Regards,

Bill Russo
Managing Director, Gao Feng Advisory Company
bill.russo@gaofengadv.com

Aloke Palsikar
Senior Vice President & Global Head, Manufacturing Vertical
Tech Mahindra, Ltd
aloke.palsikar@techmahindra.com

Tel: +86 10 5650 0676 (Beijing); +852 2588 3554 (Hong Kong); +86 21 5117 5853 (Shanghai)

31°North and Gao Feng Advisory Company Form a China-Israel Business Advisory Partnership

Shanghai, China – May 25, 2015 – 31°North, an Israel-based venture advisory firm, and Gao Feng Advisory Company (“Gao Feng”), a global management consultancy with roots in China, today announced that they have signed a strategic partnership agreement.  Both firms will seek to combine efforts to deliver a unique and comprehensive set of services to their global clients.

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This partnership is intended to accelerate the commercialization of technologies related to the Internet of Things (IoT) from their incubation stage to full-scale deployment.  Israel, dubbed the start-up nation, is known for its disproportional number of successful start-ups, doctors, scientists, engineers, registered patents and NASDAQ listed companies.  Over the next decade, IoT related businesses are expected to grow exponentially, and China will likely become be the largest market for commercialization of these technologies.  The sheer size of its population and industrial infrastructure, the high rate of user adoption of social networking and mobile/connected technologies, along with the commercial aggressiveness of the companies competing in the IoT market, will result growth rates higher than that of other global markets.

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.

31°North and Gao Feng will partner to provide services to help their clients leverage these forces to achieve competitive advantage.  The combined services portfolio will encompass topics including smart city, connected mobility, vehicle electrification and network management, among others.  The Strategic Partnership aims to play a significant role in assisting public and private sector organizations to accelerate commercialization of innovative new technologies.

“The Israeli technology ecosystem has grown to be one of the most advanced globally with leadership in cyber, industrial technologies, big data, billing systems, sensor development, mobile applications amongst others. China represents an exciting market for Israeli firms and we look forward to leveraging our strong partnership with Gao Feng to help facilitate between Chinese global and local industries and Israeli technology”, said Uri Kushnir – Managing Partner at 31°North.

“Gao Feng is a pre-eminent strategy and management consulting firm”, said Dr. Edward Tse, founder and CEO of Gao Feng.   The conditions in China – the market with the largest number of both internet and “smart phone” users – will likely make it the incubator for rapid commercialization of IoT innovations.  The partnership with 31°North allows Gao Feng to offer our clients a broad set of capabilities and deep expertise in the area of IoT and Connected Mobility”, he added.

Gao Feng Advisory Company is a pre-eminent strategy and management consulting firm with roots in China and global vision, capabilities, and a broad resources network.

31°North is a venture advisory firm positioned at the cutting edge of the Israeli technology eco-system, assisting global corporates with strategy and implementation of technology.

 

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About 31°North  

31°North is a venture advisory firm positioned at the cutting edge of the Israeli technology eco-system, assisting global corporates with strategy and implementation of technology solutions. We work with global players looking to integrate new technology solutions into their existing technological platform, often also dealing with technology road-mapping, regulatory support and standards work. Our day to day is spent analyzing hundreds of technology companies ranging from startups to mature firms, with the aim of customizing the best available solutions for our global clients. We specialize in the automotive industry, smart cities and cyber security and have worked extensively with OEMs, Banks, Governments, municipalities, Industrial firms, Global integrators and Venture firms

Our founders bring experience from both the financial/venture and technological corporate world with experience as executives in global listed companies, technology startups and major tech integrators. Our in-house expertise is extended by deep partnership with Venture and Advisory firms.

Connect with us on www.31degreesnorth.com
For Further Queries: 
Guy Pross | Managing Partner  – Tel Aviv, Israel | Email: guy.pross@31degreesnorth.com

About Gao Feng Advisory Company

Gao Feng Advisory Company is a pre-eminent strategy and management consulting firm with roots in China and global vision, capabilities, and a broad resources network. We help our clients address and solve their toughest business and management issues — issues that arise in midst of fast-changing, complicated and ambiguous operating environment. We put our clients’ interest first and foremost. We are objective and we view our client engagements as long-term relationships rather than one-off projects. We commit to helping our clients to not only “design” the solutions but assist in implementation, often hand-in-hand with the clients. We believe that every member of our team can contribute to problem solving for our clients, from the most senior to the most junior.

Our seniors are former senior consultants at leading management consulting firms and/or senior executives at large corporations. We believe clients would benefit the most from a combination of consultants with substantive experience in consulting coupled with line management professionals.  In addition to our team in the Greater China offices of Beijing, Hong Kong and Shanghai, we have a global network of collaboration partners with a wide range of experience, capabilities and resources.

Connect with us on www.gaofengadv.com 
For Further Queries: 
Bill Russo | Managing Director – Shanghai, China | Email: bill.russo@gaofengadv.com 

An Intelligent Urban Transportation Ecosystem for China

Gao Feng Insights Report, April 2015

We are pleased to share with you a report titled: An Intelligent Urban Transportation Ecosystem for China. This new report is the product of a collaboration between Gao Feng Advisory Company and our partners at the Massachusetts Institute of Technology Media Lab. The core mission of the MIT Media Lab is to design technologies to create a better future.

China’s cities have been the engines powering its rapacious economic growth. Since 1978, China’s urban population has risen from about 18% to over 53% today, and by 2025 about two-thirds of Chinese citizens will live in cities. The 35 largest cities in China recently contributed just under half of China’s overall GDP. However, the wealth accumulated in China’s cities has come at the price of livability. Many cities are struggling with paralyzing gridlock, dangerous air quality, and widening income disparity. There is a growing recognition that the current formula for development is unsustainable, and a more balanced model is being sought.

It is precisely this set of conditions that make China the most likely platform for incubating and commercializing the innovative technologies to serve the “smart cities” of the 21st Century. After several decades of advances in the world of mobile connectivity, big data and social networks, technology is now making the commercialization of smart city transportation solutions feasible. A new “ecosystem approach” must be envisioned to deliver sustainable urban mobility. Such a system should evolve beyond conventional solutions such as private vehicles with electric power trains or bus-rapid transit. This “systems” approach instead focuses on utilizing new technologies, urban strategies, and progressive public policies to create an intermodal and interoperable mobility network that combines existing mobility systems (such as mass transit) with creative new mobility systems.

In this paper, we describe the vision and key elements of an Autonomous Mobility-on-Demand (A-MoD) System, and how a collaborative effort among Academia, Industry and Government can be leveraged to deploy a sustainable urban transportation system in China.

Bill Russo to Brief Investors on New Energy Vehicles Market in China

TOPIC:

The Path to Electrification of China’s Automotive Industry

Date: Thursday, February 12, 2015

Time:  10AM EST, 11PM China

Venue:  Conference Call

Click here to register (sponsored by Coleman Research Group)

  • Recent performance of electric vehicles manufacturers in China
  • Tesla’s growth plans and the impact on dealership dynamics
  • Traditional auto ownership model re-shaped by rapid urbanization
  • Disruption of the automotive value chain
  • New mobility concepts changing traditional business models
  • Unique context of China’s urban transportation challenges
  • China’s 12th 5-year plan identified seven strategic emerging industries including electric vehicles, energy efficiency & environmental protection, new generation information technology, bio-technology, high-end equipment manufacturing, alternative energy and new materials
  • Need for OEMs to develop strong relationships with telcos and technology players
  • Companies: Ford (F), General Motors (GM), Volkswagen (VOW), Toyota(TM), Honda (HMC), Fiat Chrysler (FCAU), Nissan (NSANY), Hyundai (HYMTF), Daimler AG (DDAIF), BMW AG (BMW), Continental AG (CON), Valeo (EPA), TRW Automotive (TRW), Mobileye (MBLY), Uber, Yidao, Relay Rides, Baidu (BIDU), Alibaba (BABA) and Google (GOOG)

As the balance of world market and economic power shifts from West to East, China has emerged as the key location in the battle for dominance of the 21st century’s global auto industry. Due to increasing pressure from air pollution, oil consumption and urban congestion, the focus of the country’s auto industry will increasingly switch from internal combustion engine vehicles to alternative propulsion technologies, particularly those powered by electricity. Already many observers believe that the government’s ambitious series of programs and policies designed to accelerate the development of new energy vehicles run over the last decade will lead to the emergence of China as the key location for a global “green” mobility revolution. As this happens, the eventual electrification of the automotive powertrain will transform the automotive industry.
ABOUT OUR EXPERT:

Bill Russo is Managing Director at Gao Feng Advisory Company, Ltd. He has more than 25 years of experience in the industry. He was previously VP of Chrysler Northeast Asia, where he successfully negotiated and secured government approval for six vehicle programs with three different Asian partners. In this time period, he launched a regional holding company as well as two distribution companies and oversaw the industrialization of the first Chrysler and Dodge-branded vehicles in Asia. He holds a U.S. patent for his innovative efforts towards reducing automotive new product development cycle time and is a published author and opinion leader whose viewpoints have appeared throughout several media outlets.