June 26, 2006 Global Auto Manufacturing and the Role of China 2006 President’s Forum 1...

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1 June 26, 2006

Global Auto Manufacturing and the Role of China

2006 President’s Forum

Regulatory Issues and

China’s Auto Market政策法规对中国汽车产业的影响

Wayne W.J. Xing Ph.DChina Business Update

China Automotive Review

中国汽车要闻邢文军


2 June 26, 2006



The Auto Market Today中国的汽车市场

Future Trend & Drivers未来市场的走向和影响因素

Recent Policies & Regulations近期的相关政策和法规


3 June 26, 2006



The Auto Market Today中国的汽车市场


4 June 26, 2006



The Rise of Per-Capita GDP人均 GDP

1985 1990 1995 1998 2001 2002 2003 2004 2005GDP (tril. yuan) 0.9 1.86 5.75 7.7 9.6 10.24 11.67 13.65 18.23Population (bil.) 1.06 1.14 1.21 1.25 1.276 1.28 1.29 1.3 1.3Per-capita yuan 853 1,634 4,854 6,277 7,517 8,187 9,014 10,501 13,950Per-capita $ 103 197 574 746 909 990 1,090 1,270 1,703

Large Metropolis and Coastal Areas$3,000-$4,000 直辖市及沿海地区


5 June 26, 2006



Automobi l e Output 汽车产量 1992- 2005

01, 000, 0002, 000, 0003, 000, 0004, 000, 0005, 000, 0006, 000, 0007, 000, 000

Year

Unit

s

Car*BusTruck**Total


6 June 26, 2006



Growth Rate of Automobile and Car Production 1993-2005汽车及轿车产量增幅

(in million units)

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005Total 1.29 1.35 1.45 1.47 1.58 1.63 1.83 2.07 2.35 3.25 4.46 5.10 5.73% change 22.1 4.3 7.3 1.38 7.37 3.16 12.3 13.1 13.6 39.0 37.2 14.3 12.3Cars* 0.23 0.25 0.32 0.39 0.48 0.52 0.57 0.60 0.75 1.17 2.11 2.36 2.93% change 41.1 8.9 30.0 29.4 23.1 8.33 11.5 6.95 23.27 56.0 80.3 11.8 24.2* Includes sub-category cars and MPVs


7 June 26, 2006



Adding One Million Units A Year年增百万辆First Million: 1953-1992 -- 40 yearSecond Million: 1993-2000 -- 8 yearsThird Million: 2001-2002-- 2 yearsFourth Million: 2003 -- 1 yearFifth Million: 2004 – 1 yearsSixth Million: 2005 – over 1 yearSeventh Million: 2006 – 1 year


8 June 26, 2006



GDP and Output Growth Rates GDP 和汽车产量增幅

-30

-20

-10

0

10

20

30

40

50

60

GDP Output


9 June 26, 2006



China’s auto market: myth and reality 中国的汽车市场的真实性


10 June 26, 2006



Farm Truck Output 1992-2005 农用车

0500, 000

1, 000, 0001, 500, 0002, 000, 0002, 500, 0003, 000, 0003, 500, 000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Year

Uni

ts 3 wheel er4 wheel erTotal


11 June 26, 2006



Motorcycle Output 1992-2005 摩托车产量

0

5,000,000

10,000,000

15,000,000

20,000,000

Year

Uni

ts

Units


12 June 26, 2006



Motor Vehicle Output 机动车产量 (含农用车)

(including farm trucks)

02, 000, 0004, 000, 0006, 000, 0008, 000, 000

10, 000, 000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Year

Unit

s

CarBusTruckTotal


13 June 26, 2006



Intensifying Competition 竞争激烈

6 ＋ 33 ＋ ?


14 June 26, 2006



DF-Yueda-Kia

FAW Car

FAW-VW

SGM

SVW

Hainan-Mazda

GEELY

Tianjin-FAW-XialiTianjin- FAW- Toyota

Chang’an-Suzuki

Dongfeng-Peugeot-Citroën

Chery

Guangzhou-Honda

D-Nissan

Brilliance-JinbeiBJ-Hyundai

Chang’an-Ford

NJ-Fiat

Changhe-Suzuki

Hafei Auto

Guizhou-Skylark

SoutheastS-GM-Wuling

Sichuan-Toyota

3+?

Guangzhou-Toyota

Chang’an-FordD-Nissan

Guangzhou-Hyundai

Great Wall

Jianghuai

6+3


15 June 26, 2006



6 ＋ 3 Multinationals are all in 跨国公司全部进入Volkswagen: 大众 SAIC and FAW GM: 通用 SAIC-GM, Wuling, Dongyue, Jinbei

Ford: 福特 Chang’an, Nanjing, JianglingDaimlerChrysler: 戴克 BAIC, Southeast Toyota: 丰田 FAW, GAICHonda: 本田 GAIC, Dongfeng Renault/Nissan: 雷诺 - 日产 Dongfeng BMW: 宝马 Brilliance JinbeiPSA: 标致雪铁龙 Dongfeng ; Fiat: 菲亚特 NanjingHyundai-Kia: 现代 - 起亚 BAIC, Dongfeng, GAIC Suzuki: 铃木 Chang’an, Changhe; Mitsubishi: 三菱 South

east Isuzu: 五十铃 Qingling;


16 June 26, 2006



3 ＋？ : FAW, Dongfeng, SAIC “ 三大＋？”

BAIC: 北汽 DaimlerChrysler, Hyundai, MitsubishiGAIC: 广汽 Honda, Toyota, Dongfeng-Nissan

PassengerChang’an Group: 长安 Ford, SuzukiHafei/Changhe: 哈飞 / 昌河 Aviation Industry GroupJianghuai Auto Group 江淮Nanjing: 南汽 Fiat, MG RoverSoutheast (Fujian) ：东南 Mitsubishi, China MotorsBrilliance: 华晨 BMW Qingling Motor Group ：庆铃 Isuzu


17 June 26, 2006



3 ＋？ Domestic Investment 国内投资Chery: 奇瑞 R&D Center, Engine Plant, Export/JV

Geely: 吉利 R&D Center, Engine plant, Export/JV BYD (Qinchuan): 比亚迪 HK$254 million/74% shares Great Wall: 长城 100,000 units car assembly plant Jianghuai: 江淮 light commercial, MPV, car Lifan: 力帆 1.6L car Zhongxing: 中兴 SUVs and pickups Gonow Auto: 吉奥 SUVs and pickups Loncin: 隆鑫 ¥300 million, bus/suv


18 June 26, 2006



Reality and Definition 如何定义Sedan 轿车Automobile 汽车Motor vehicle 机动车Consumers 消费者

Family car 家庭轿车Price: 价格 ¥100,000, ¥80,000, ¥40,000, ¥30,000

Sedan vs hatchback 三箱 , 两箱 (Citroën ZX, Xiali)


19 June 26, 2006



Summary 结论 :

• Eexisting and potential large market 现实和潜在大市场• Institutional and commercial 公、商务车市场• Consumer market: 消费者市场：摩托车、农用车、微车 Motorcycles, farm vehicles, mini-vehicles (not 100%)• Sedans 轿车 •Transition from a centralized to a market system计划经济向市场经济过渡


20 June 26, 2006



Future Trend and Drivers未来市场的走向和影响因素


21 June 26, 2006



Interaction of Three Forces 三股力量的博弈Government, World Market, Domestic Market 政府、国际和国内市场

Streamlining of Central Bureaucracies 精简政府机构 Protection of Private Property 公有制和私有制 WTO Impact 世贸组织 The Rise of a Consumer Market 消费者市场的兴起


22 June 26, 2006



Declining Administrative Control行政干预逐渐弱化

× Ministry of Machinery Industry 机械部× State Administration of Machinery Industry 机械局× China National Automotive Industry Corp. 中汽总× State Economic and Trade Commission 经贸委

Federation of Machinery Industry 机械工业联合会CAAM/SAE 中国汽车工业协会 / 中国汽车工程学会


23 June 26, 2006



Emphasis on the Rule of Law 法制增强

Type/Product Approval 认证Safety: compulsory tests, frontal collision 安全碰撞法规Emission Control: Euro III & II 排放Consumption Tax 消费税Consumer Protection: Recall 消费者保护Fuel consumption level: 然油消耗限制


24 June 26, 2006



Administrative Control 行政干预依然存在

Auto Industry Development Policy 产业政策（ 2004 ）• Market entry 市场准入• 50:50 Equity Share JV for OEMs 股比限制• Two JVs for the same type of vehicles 项目限制


25 June 26, 2006



Different departmental priorities ( 部门交叉管理）

• SDRC: 发改委 Circular (investment threshold)• State Assets Commission 国资委 Large State-owned companies• MOFCOM: 商务部 Investment, Sales, Export• Quality Inspection ， Supervision & Quarantine: 质监局• Administration of Taxation: 税务局 Taxation• Industry and Commerce: 工商局 Business License• Public Security: 公安局 Vehicle License & Registration• Communications: 交通部 Maintenance & Repair• Ministry of Science &Technology: 科技部


26 June 26, 2006



Market vs. Central Planning 市场和计划经济

State Council DRC 国务院发展研究中心• Government Should Not Interfere 政府不宜干预• Equal Access and Fair Competition 公平竞争


27 June 26, 2006



Driven by Market Forces 市场的作用越来越大

Automobile: means of production vs consumer good汽车：生产资料还是消费品Public/Institutional to Private Ownership公有到私有Economic Growth & Rising Living Standards经济发展和生活水平


28 June 26, 2006



• Overall Economic Growth 经济持续增长

Average GDP growth 7-8% GDP 增幅 Active fiscal policy 积极的财政 Average annual growth in output 10-15% 汽车年产量均增 15 ％左右


29 June 26, 2006



International Players 跨国公司

Multinational Presence 跨国主机厂和供应商Government Relations and Lobbying 政府公关Vehicles for Government Consumption 政府采购Emissions, Safety, Technology 安全、排放、技术


30 June 26, 2006



WTO Accession 世贸组织

Tariff down to 25%/10% in 2006 关税减削减 Quota eliminated 配额许可证取消 Localization requirement 取消国产化率 Global sourcing 全球采购 Equity investment limit 放宽投资额度限制 Consumer expectations: Price reduction 降价


31 June 26, 2006



Domestic Market Forces 国内市场变化

Local Investment 地方政府投资Private Investment 民营投资 Chery, Geely, Brilliance, BYD, Lifan, GWMarket Entry Open, with restrictions 准入并未封闭

Merger & Acquisitions 兼并重组，借壳生产Buying into the Big Three? 民营参股三大 ?


32 June 26, 2006



Corporate Decision Making 企业面临新决策

Protective vs. Competitive Advantage 保护还是竞争优势

Advanced Management vs. Efficiency 先进管理和效率

State-ownership & Labor Cost Advantage 国有和劳动力成本

Low-Cost Management 低成本管理Product Development: Institutional/Consumer

新产品开发对象


33 June 26, 2006



Market Share of Carmakers, 2004-2006 (%) 市场份额Make/Model 2001 2004 2005 Jan-Mar. ‘06Shanghai-VW 31.9 15.8 9.9 9.8Shanghai-GM 7.7 9.9 10.4 9.3FAW-VW 16.5 13.4 9.6 8.8Beijing-Hyundai N/A 6.4 7.8 7.0Chery Automobile 3.7 4.2 6.4 6.9 Geely 2.9 4.5 5.2 6.1Tianjin-FAW-Toyota N/A 3.4 4.7 6.0 Tianjin-FAW-Xiali 9.3 5.8 6.7 5.8Guangzhou-Honda 6.8 8.2 7.1 5.7Dongfeng-Nissan N/A 2.7 5.5 5.6Dongfeng-PSA 7.0 3.8 4.8 5.0


34 June 26, 2006



• The Road of Electronic Appliances and Motorcycles 家电和摩托车

Motorcycle Market shares: 1997 2005 摩托车市场份额 SOEs + JVs （国有和合资企业） : 90% 40%


35 June 26, 2006



Recent Policies & Regulations 近期的相关政策和法规


36 June 26, 2006



Auto Industry Development Policy （ 2004 ）产业政策

• 50:50 Equity Share JV for OEMs 整车股比限制• Two JVs for the same type of vehicles 项目限制• JV initiated M&As 合资企业兼并重组国企• Separation of production & Sales: Mazda 3

生产和销售分离• Entrance barrier 准入• Support of “large auto groups” 支持“大集团”


37 June 26, 2006



Import Tariff 进口关税

• Quota and license eliminated 许可和配额取消• Whole vehicles: 25% July 1, 2006 整车 25 ％• Parts & components: 10% July 1, 2006 零部件 10 ％• Impact: high-end, luxury cars as imports 豪华

车Targeting the newly rich 新富 Local production unlikely 不会

地产


38 June 26, 2006



CBU Characteristics 整车特征 (April 1, 2005)

• Import Administration of Automotive Parts and Components Having Characteristics of CBUs• 60% or higher in value: 25 ％ tariff, July 1, 2006

超过整车价值 60 ％，按整车征税• EU, US, Japan, Canada, Australia, Mexico: “Violation of WTO rules on localization” 违背WTO 地产规则• China ：” Counter import tariff evasion” “打击逃避关税”• Likely solution 解决办法


39 June 26, 2006



Exterior ID Marks 汽车外部标识

• Administrative Methods on Exterior ID Marks of Automobile Products, February 2006 今年二月实施

• Government: Made in China 政府规范市场• Corporate: Sales 企业销售• Consumer: Foreign vs. local brands 消费者心理


40 June 26, 2006



Consumption Tax, April 1, 2006 消费税 (%)

Sedan/MPV SUVEngine New Old Change Engine New Old

Change<1.0L 3 3 0 <=1.0L 3 3

0>1.0L-=1.5L 3 5 -2 >1.0L-=1.5L 3 3

0>1.5L-=2.0L 5 5 0 >1.5L-=2.0L 5 3

2>2.0L-=2.2L 9 5 4 >2.0L-=2.2L 9 3

6>2.2L-=2.5L 9 8 1 >2.2L-=2.5L 9 3 6>2.5L-=3.0L 12 8 4 >2.5L-=3.0L 12 5 7>3.0L-=4.0L 15 8 7 >3.0L-=4.0L 15 5

10>4.0L 20 8 12 >4.0L 20 5

15

Impact: 影响


41 June 26, 2006



Farm vehicles part of automobiles 农用车变为汽车的一部分

• The Notice on Standardizing the Administration of Three-Wheel Automobiles and Low-Speed Trucks, June 1, 2006 三轮汽车、低速卡车

• VIN ： January 1, 2007 汽车识别代号• WMI: 世界制造识别

a) minimum output 3,000/500 最低年产量

b) certification 生产许可• Application deadline: December 31, 2006 申请截至


42 June 26, 2006



Motor Vehicle Output 机动车产量 (含农用车)

(including farm trucks)

02, 000, 0004, 000, 0006, 000, 0008, 000, 000

10, 000, 000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Year

Unit

s

CarBusTruckTotal


43 June 26, 2006



Independent Innovation and Brands 自主创新和自主品牌

• National strategy 国家战略决策• From low-cost to technology advantage低成本优势到技术创新优势

• Ministry of Science & Technology 科技部主导• Comments from top leaders 领导人关注• Fair competition and support local brands 为自主品牌创造公平竞争环境


44 June 26, 2006



Emissions and Safety 安全与排放

• Euro III: Beijing, January 1, 2006 欧 III

• Euro IV planned for July 1, 2007 欧 IV

• Frontal and side-collision 正侧面碰撞法规


45 June 26, 2006



Other policies and regulations 其他政策法规1. 11th Five-Year Plan 十一五规划

2. Catalogue of Guidance on Industrial Structure Adjustment 工业结构调整指导目录

3. Catalogue of Guidance on Encouraging Foreign Investment 外商投资指导目录

4. Compulsory scrap standards 强制报废标准

5. Used vehicle sales 二手车流通6. Maintenance & repair 维修与检测7. Compulsory liability insurance 强制责

任险


46 June 26, 2006



Future policies, laws and regulations政策法规走向

• 50:50 equity share control 股比控制• Fuel Tax 然油税• Independent vehicle brands for new JVs 自主品牌• Fair competition: Enterprise income tax: 11% vs

23% 税收并轨• Reduced administrative control 进一步减少行政控制• Anti-Monopoly Law 反垄断法


47 June 26, 2006



Thank You

June 26, 2006 Global Auto Manufacturing and the Role of China 2006 President’s Forum 1...

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