Three breakthroughs in China's car manufacturing

The author of this article is a studio colleague Garcia, everyone thinks it is well written, you can tip or like.

In the summer of 1896, Li Hongzhang, who had left class, was sent by Lafayette to visit Germany, Britain, France, the United States and other countries.

At this time, Li Hongzhang, who was 74 years old, was lost like a hammered bull due to the defeat of Jiawu, and as soon as he received an errand, he rammed and rammed and set off with a nanmu coffin, fearing that his old and decaying self would die in the middle of the road.

At this time, there were still 5 years before the death of Li Hongzhang and 16 years before the fall of the Qing Dynasty.

In Bismarck's private garden, Li Hongzhang asked the iron-blooded prime minister, who was also out of class, two questions: First, what should China do to be as strong as Germany? Second, how can we carry out reforms in China?

Bismarck looked at the old Chinese man in front of him, whose eyes were cloudy and he was known as the "Bismarck of the East", and for a moment he didn't know what to say, and Old Li continued to complain: "Where we are, the government and the state are creating difficulties and obstacles for me, and I don't know what to do?" ”

Bismarck comforted him like a buddy: "When I was prime minister, I often encountered this situation, sometimes from the side of women..."

Bismarck and Li Hongzhang, 1896

Before leaving Germany, Li Hongzhang visited some local factories and ordered a batch of cannons from the Krupp Arsenal, although the Qing Dynasty had been engaged in foreign affairs movements for more than thirty years, but the military industry mainly relied on imports.

Whether it is the industrial field or the scientific and technological field, the gap between China and the West at that time was not a star and a half, but a scrap iron to the king.

While the Qing Dynasty was busy pasting this fragmented dynasty like a country pastemaker, and suffering from the inability to build a cannon that could drive out the Western powers, on the other side of the ocean, the Americans were already happily crossing the century, and they began to build cars in Detroit, and Henry Ford, Walter Chrysler, David Buick and others poured into the city, ambitiously wanting to open a new era - the era of the automobile industry.

In 1903, when the Ford Motor Company was founded, Shanghai, the most prosperous city in China, only issued 5 car license plates, and it was not until 1910 that it increased to 151. Of course, the cars are imported.

After the fall of the Qing Dynasty and the fall of China into various scuffles, Ford Motor Company set a staggering record of six cars being produced every minute, and the United States single-handedly took on 95% of the world's automobile production.

Germany followed, and in 1934, the Volkswagen Group drove the city's auto industry in Wolfsburg, making it another world-class automotive industry cluster after Detroit in the United States. Then there was Japan, in 1973, the Japanese who suffered from the stagflation crisis desperately transformed into the two directions of core technology and globalization, and as a result, Toyota Motor Corporation took the lead in developing a set of lean production methods, and Japan began to surpass Germany and the United States to become a new automobile production power.

Why are the United States and Germany all keen on building cars, And Italy, Spain, France, and the United Kingdom have also squeezed into the same track.

Because the strong automobile industry is an important symbol of modern industrial power.

Building a car is not like building a rocket aircraft carrier, as long as enough money and people are thrown, it is possible to achieve a single point breakthrough, because building a car tests a country's industrial system.

Some people may not understand that on the difficulty, building cars is certainly not as good as building rockets and building airplanes; on the speed of iteration, the automobile industry is not as good as the IT industry; on the requirements for safety, it is not as good as aerospace and medical equipment... Why is the automotive industry the benchmark for manufacturing?

Because compared to these industries, building cars must achieve a wonderful balance in terms of cost, safety, stability, iteration speed, etc.

For example, in order to build rockets, we can invest manpower and financial resources with national strength at any cost, and each part is regenerated and outputs hundreds of them to ensure accuracy, you can even build two rockets at the same time, and then choose one to send to the sky, but if you use this way to build a car, to ensure that the loss is not recognized by the parents. Building a car is about what can be done for a dime, never spend two cents, and never arrange the work that a worker can do.

Moreover, the industrial chain of the automotive industry is very long, from the supply of raw materials, the production of parts and components, down to the sales link, interlocking, so it will form a large and small automobile industry cluster on a global scale. Separated from the industrial cluster, a lonely automobile manufacturing plant simply cannot survive.

Take a chestnut.

In 1988, ford motor company produced 3.98 million cars a year, but there were 1,800 suppliers who directly supplied it with parts alone! Coupled with the layers of outsourcing of indirect suppliers, there are so many that people are mad, including metallurgy, textiles, energy, chemicals and other industries, and any problem in any of these links may affect the stable mass production of the main engine plant.

Therefore, the automotive industry has a very mature, the best manufacturing system to reduce risks and ensure stable output, this system covers supply chain management, production management, quality management and other aspects.

And isn't all of the above a country's industrial system?

Look at the mess left by the Qing Dynasty that can't even build a decent cannon, where is the industrial system? After the warlords' scuffle, the Japanese burning and looting, the liberation war, let alone the industrial system, the "agricultural system" is about to collapse, in short, there are wastelands and collapsed factories everywhere, just like the capital iron and steel plant in 1949 (then called Shijingshan Iron and Steel Factory), there are no workers in the factory area, some are just crazy weeds and wild wolves.

Under such circumstances, how should poor and white Chinese break through, build their own cars, and establish their own industrial system?

This puzzle is comparable to Genesis.

01

First breakout

In 1949, because of the years of chaotic fighting, arable land was deserted, factories collapsed, and tens of thousands of kilometers of railways, 3,200 bridges, and more than 200 tunnels were destroyed.

Because a large number of factories and mines have closed, more than 4 million workers (almost half of the total number of workers in the country) have lost their jobs, and the countryside has left a bunch of orphans and widows, and the former "heavenly kingdom" has become the poorest country at the bottom with an annual per capita national income of 27 US dollars, even far lower than the per capita income of 44 US dollars in asia.

Faced with such a mess, Mao Zedong snapped his fingers and said: What can we build now? Tables and chairs can be made, teapots and chopsticks can be made, and paper can be made, but a car, an airplane, a tank, a tractor cannot be built.

The same problem was also encountered by Li Hongzhang in that year.

The difference is that the old and decaying Li Hongzhang has learned to admit his fate, and the decaying Daqing is also accustomed to rotting, but at that time, the whole mind of New China was full of changes of fate against the sky. It's just that exactly how to reverse, how to change, we are indeed a little confused.

At the end of 1949, Mao Zedong went to the Soviet Union with a stomach full of doubts.

During his stay in the Soviet Union for more than two months, Mao Zedong visited many Soviet enterprises, and at the Stalin Automobile Factory, Mao Zedong looked at the cars that came out of the assembly line and said excitedly: "We must also have such automobile factories!" ”

At that time, he estimated that he did not realize that the powerful automobile industry was the underlying pillar of an industrial power, and he simply felt that our national defense construction needed a large number of military vehicles.

At that time, our military vehicles were all "all nations plates" that had been pieced together from the east, some captured from the Japanese and some from the Kuomintang troops, and the Kuomintang military vehicles, in the final analysis, were either obtained by diplomatic means or at a cost of money from foreigners.

On February 14, 1950, after More than two months of Mao Zedong's stay in the Soviet Union, we finally finalized with the Soviet Union a number of key industrial projects for Soviet assistance in China's construction. These assistance projects, later known as the "156 Project", covered almost all core industrial fields such as energy, metallurgy, chemical industry, machinery, light industry, etc., including an automobile plant project.

We needed the car factory too much, because in those years, we suffered from a lack of cars.

After the outbreak of the Korean War in 1950, our entire army had only more than 1,300 vehicles, and as a result, 217 were damaged by enemy aircraft in the first week. Because of the shortage of vehicles, grain and winter clothes could not be transported to the front line in time, so there was a picture of soldiers in "Chosin Lake" wearing single clothes and nibbling potatoes in the ice and snow.

At that time, because of the imperialist economic blockade, only the Soviet Union was willing to sell us cars, and only the Soviet Union was willing to teach us to build cars.

In terms of car building, the Soviets are certainly inferior to the Americans, but in the field of military cars, the Soviets can pull out the "Gass" series made by the Gorky Automobile Factory and the "Gies 150" made by the Stalin Automobile Factory.

The Soviet Union was able to make a breakthrough in building cars because they took advantage of the Great Depression in the United States to buy a ford-owned automobile factory, and although the American capitalists said that they would never transport a nut to the enemy, they were very honest, handing over gold with the Soviets, delivering goods with the other, and allowing the Soviet Union to send 50 experts and interns into American factories every year to study. In World War II, the Soviet Union obtained 340,000 cars from the Americans through allied friendship, and the Soviets selected the most famous KB trucks from the World for imitation, and finally built their own "Gies 150".

Later, the Soviet Union aided the construction of China's car model, which was the Gies 150.

Looking at the world, the automobile industry has no more than two development paths: one bottom-up consumption-driven, focusing on the production of cars, represented by the United States; the other is a top-down policy-driven type, focusing on the production of trucks, represented by the former Soviet Union.

For China at the time, it was not a multiple-choice question, because we could only take the second way.

At the beginning of the founding of New China in 1949, there were only a few hundred private cars in the country, and the people were poorer and poorer, and they couldn't even eat enough. And the difficulty of building cars and trucks is not an order of magnitude at all, the structure of the car is much more delicate than the truck, and the heavy driving and riding experience, we have no industrial foundation, want to debut to build a car, just like a dick said to set a small goal of one hundred million.

The general direction of development was there, focusing on the construction of military vehicles and trucks, and then we began to prepare for the construction of factories with Soviet experts.

At that time, Soviet experts reminded us that the first thing to consider in the construction of a large modern automobile manufacturing plant was the basic conditions such as power supply, steel supply, railway transportation, geology, and water sources. For example, according to the production line with an annual output of 30,000 trucks, it needs 24,000 kilowatts of electric units and more than 200,000 tons of steel, and only these two are not met by few cities.

Looking at the whole country, the most qualified is the northeast, especially around Changchun. Because in order to plunder resources, the Japanese built a relatively complete industrial base and road and railway network in the northeast, and the northeast is not lacking in steel, because they have the largest steel mill in China - Angang Steel.

After several years of preparation, in 1953, we finally began to build a factory in Changchun.

This plant is now FAW.

Three years later, in 1956, FAW built its first Jiefang car. By the end of 1956, FAW had produced a total of 1,654 Jiefang brand cars, and in 1957 sold three to Jordan, completing China's first ever export of complete vehicles.

The first Jiefang car drove off the assembly line on July 13, 1956

The industrialization road of New China began with the "First Five-Year Plan", that is, starting from 1953, this time context is consistent with the development process of FAW, so although as early as 1950, Mao Zedong said that Northeast China is the "eldest son of the republic", but later FAW also won the title of "eldest son of the republic" by virtue of its strength.

Compared with FAW, because of its special historical background, the second automobile in the back can be said to be digging pits all the way, and if there are difficulties, it will be tripped by difficulties, and if there is no difficulty, it will create difficulties by itself.

As early as 1952, we began to consider the construction of the second automobile, but just to determine the location, we took 14 years.

At the beginning, we chose Wuhan, because this is the second largest industrial town after Changchun, when many major projects of the country were placed here, such as Wuhan Heavy Machine Tool Factory, Wuhan Shipyard, Wuhan Iron and Steel Factory... In 1955, when all kinds of planning maps such as factory planning, highways and railways came out, Soviet experts casually said: You have concentrated so many factories in Wuhan, won't you finish it all with a bomb?

This sentence startled everyone, because at that time, the Cold War between the United States and the Soviet Union was in full swing, and the Third World War seemed to be on the verge of breaking out.

We can only tear it down and start over.

Later, Soviet experts said that it would not be recommended to build comprehensive large automobile factories, but to build ten specialized factories separately, and to arrange these ten specialized factories in Chengdu, Deyang, Baoji, Xi'an, Luoyang, Zhengzhou, and other places, so as to crush the wolf ambitions of imperialism.

Fortunately, this plan, which seriously violated the law of automobile production, was not implemented in the end, because then we found that the cake stalls of the "First Five-Year Plan" were too big, and at this time, a rift began to appear between China and the Soviet Union, and the newly appointed Khrushchev felt that aiding China was a burden, so he withdrew funds and technical personnel, and the preparation of the second automobile was also gone.

After experiencing the Great Leap Forward in 1958 and the three years of natural disasters in 1960, it was not until 1964, in the context of the sino-Soviet confrontation and the struggle for hegemony between the United States and the Soviet Union, that we began to engage in third-line construction, and the second automobile was launched again.

In 1966, after more than a year of field research, adhering to the spirit of "backing, concealment and dispersion" in the construction of the third line, and the key places must be able to enter the cave, we finally chose the factory site in Shiyan, Hubei.

Shiyan was not called Shiyan City at that time, because it was just a small town with less than 100 residents. The town is surrounded by mountains, and to the south is the Wudang Mountains where Zhang Sanfeng once stayed, and there is only a narrow dirt road to enter.

The second automobile started construction in Shiyan, 1966

After the site selection was finalized, it was the "Cultural Revolution", a "blind command" wind also blew to the construction site of the Second Automobile, for example, for safety reasons, originally every workshop had a wall, but some people said that "the poor and lower middle peasants are the best wall", they cut the wall, and then the poor and lower middle peasants not only moved the equipment in the workshop, but also used the workshop as their own cowshed.

In the autumn of 1969, the Second Automobile Was finally almost built, and then the Wuhan Military Region gave them a phone call -

"Please be sure to send out 100 cars on May Day and 500 cars on 'Eleventh' next year, and then go to Wuhan to participate in the celebration parade."

Erqi is confused, they have just built the factory, the production equipment is not in place, but with the political consciousness of understanding to implement, do not understand in the implementation of deepening understanding, Erqi people can only be the scalp.

In September 1970, they managed to scrape together 21 cars.

On October 1, the 21 cars were sent to Wuhan to participate in the National Day parade. Of course, the Erqi people knew what kind of goods this was, and in order not to shame New China, they tied a rope wrapped in colored silk to each car in advance, planning that once the car broke down, the 8 workers who were singing and dancing would use manpower to pull the car away.

Fortunately, in the end, there was no danger, and the second steamman finally breathed a sigh of relief.

After many years of tossing and turning, it was not until 1978 that the second automobile was on the right track and began to turn losses into profits.

In 1979, the Dongfeng brand automobile produced by the Second Automobile finally raised its eyebrows in the self-defense counterattack against Vietnam, echoing with the Jiefang brand automobile produced by FAW from north to south.

02

Second breakout

From 1949 to 1979, in 30 years, we achieved a breakthrough in automobile production from scratch.

This breakout, some people say it succeeded, because we built the Jiefang brand and Dongfeng brand cars. But some people say that it failed, because we can only build trucks, but we have never achieved mass production of cars, and in fact, the manufacturing capacity of cars can represent the real car-making strength of a country.

At that time, the most accessible car we could get was undoubtedly FAW's Hongqi, but until 1981, when it was discontinued due to quality problems, we only produced 1540 cars. Compared with ford, Toyota and other assembly lines measured by "10,000 vehicles", our car production can only be regarded as a small manual workshop.

Until the beginning of the reopening, when foreign experts saw sheet metal workers in our car factory using hammers to make local handmade cars, he was shocked, because this was the method of his grandfather's car.

Why is our car production so crotch-pulling?

In addition to building cars is much more difficult and more refined than building trucks, there is also a subjective reason -- we think that taking a car is a bourgeois way of life, only public officials can take a car because of the needs of official duties, at that time we also formed a pattern of "distribution according to officials", leaders at or above the provincial and ministerial levels sit in red flag cars, leaders at the prefectural and departmental levels sit in Shanghai brand cars, and ordinary people should not touch this thing, that is politically incorrect.

Hongqi sedan

Until 1982, Chen Zutao, one of the founders of China's automobile industry, proposed to a senior official to produce more cars, and the other party was angry: "Chen Zutao, you can write an article in the People's Daily to criticize me, but the production of cars is to be strictly controlled like family planning, and no one is allowed to produce more!" ”

In short, at that time, we were neither good at building cars nor disdainful of making cars.

At first, there was nothing wrong with this, anyway, the people were poor, they couldn't even afford to buy bicycles, so it was important to concentrate on building military vehicles and trucks to solve the just needs of national defense and production first. However, after the reopening, as some people became rich first, the people's desire for cars became more and more intense.

On the other hand, the demand for the automobile market in Western developed countries such as the United States has begun to saturate. In 1970, the United States completed the process of urbanization; in 1980, the Economic Development of the United States reached its peak, when there were 711 cars per 1,000 people, except for the elderly and children, almost one per person, And fords wanted to grow steadily, there was only one way to go - expand exports.

This is also the underlying thrust of Nixon's visit to China in 1972 and the establishment of diplomatic relations between the United States and us in 1979, not only want to win us over against the Soviet Union, they also want to sell us cars, colas, shampoo and make us money.

On the one hand, the Chinese auto market, which is seriously in short supply, and on the other hand, the Western auto market, which is oversupplied, are like dry firewood, one point.

It will prove once again that not only power averses a vacuum, but the market hates a vacuum.

From 1983 to 1987, local governments used $16 billion in foreign currency to import cars, equivalent to the net fixed assets of the two Chrysler Automobile Companies at the time.

In order to retain foreign exchange, the state began to strictly control the import of cars and impose tariffs of up to 200% on imported cars.

Marx once said that "for the sake of 100% profits, capitalists dare to trample on all human laws", and now 200% of the profits are in front of us (as long as you can get a car from abroad and escape the supervision of customs, you can make more than 200% profits).

The consequence is that car smuggling is getting more and more crazy, so crazy that the uncles who sweep the toilet are inquiring about the way to smuggled cars, especially in Guangdong, the forefront of reform and opening up.

In 1984, the state could not bear it and began to crack down automobile smuggling, the most out of the circle was the Hainan automobile smuggling case (at that time, Hainan was under the jurisdiction of Guangdong).

But cracking down on smuggling is a palliative rather than a cure, because the buyer and seller are still dry firewood, do not solve the contradiction between supply and demand from the source, the more the crackdown will only spawn huge profits, even violence, just like when the United States engaged in prohibition not only did not ban alcohol, but fattened the gangsters, this is the story of the Hollywood film "Once Upon a Time in America".

But at that time, the country has not turned a corner, but the local governments are eager to move, privately listing the development of cars as a local "pillar industry", negotiating joint ventures with foreign investors, or introducing technology, or importing bulk components, and then building automobile factories everywhere.

Soon, in addition to Tibet, all provinces, municipalities and autonomous regions had their own automobile manufacturing plants, and in terms of number alone, our automobile factories jumped to the first place in the world.

But in terms of the quantity and quality of cars, we are still at the bottom. At that time, many factories casually saved a few people to get some parts to knock and piece together, they claimed to be building cars, and some factories could only produce a few cars a year, and the quality was still very poor, but even so, they could quickly sell the car and earn to fly.

It wasn't until 1987 that the country realized it. At the Beidaihe Conference that year, the central government finally decided to develop its own car industry and form a national "three big and three small" automobile industry pattern.

"Three big and three small" refers to the three major car production plants of FAW, Second Automobile and SAIC Motor and the three small car production plants of Beijing Jeep, Tianjin Xiali and GAC Peugeot. Among them, FAW produces mid-to-high-end cars with an exhaust volume of more than 2.0 L, SAIC produces intermediate Santana cars with 1.8-2.0 L, and Nihwa motor produces 1.3-1.6 L popular cars. In addition, the three production points of Tianjin, Beijing and Guangzhou start from the assembly of imported car parts, and gradually realize localization production.

Of course, in fact, it is not only the "three big and three small" that are building cars, and some people describe the situation of car manufacturing in China at that time - "three big dogs, three small dogs, and a group of wild dogs are all competing for meat in the hands of the central government." ”

The Beidaihe Conference in 1987 was to support the "three big dogs and three small dogs" who ate public food, and to clean up the "wild dogs" that came out of the people to grab meat. In 1988, the State Council also issued a special notice to strictly control the production of cars, and no new car production sites will be arranged except for the 6 car production plants that have been approved.

Marx said that capitalists trample on all human laws for 100% profit. But on the other hand, in order to survive, businessmen will also engage in technological innovation day and night to open up the market. They will never allow themselves to drink tea in the office and lie flat, and wait for death in the rapidly changing market.

Moreover, what drives businessmen is sometimes not necessarily profit.

Once, my colleague went to visit BYD, and Wang Chuanfu, a "car-making maniac", personally told an experience of his own: Once when he went to the United Kingdom, the British customs suspected that he was a stowaway, so he repeatedly checked his passport, which made him very angry, we Chinese why do we have to smuggle to your Britain? He thought at that time that we must build a great car and stop Westerners from looking down on us Chinese.

Therefore, the country has national considerations, but the market has the vitality of the market, in order to fully stimulate this vitality, the chief designer said: "Whether it is a white cat or a black cat, catching a mouse is a good cat." ”

Unfortunately, this phrase did not apply to the automotive industry at that time.

In addition to not fully stimulating market vitality, there was a more fatal problem in China's car industry at that time - the joint venture model.

As early as 1978, in order to learn advanced technology from abroad, Rao Bin, the "father of Chinese automobiles" who served as the director of FAW and second automobile plants, ran to Western developed countries to "learn from yi and long skills" and said that he wanted to introduce automobile production technology. At that time, the Western capitalist countries under the oil crisis were struggling to find new investment markets and sales markets, and as soon as they received the invitation, Ford, GM, Toyota, Mercedes-Benz, and Volkswagen sent delegations to China for negotiations.

The first to come to China was Murphy, the chairman of GM.

At that time, Murphy proposed the concept of "joint venture" and immediately got a response from the Chinese side. Unfortunately, this is only Murphy's personal idea, because at that time, americans with nostrils in the sky, they only wanted to sell cars to us, and they felt that those who were qualified to cooperate with them had to at least be willing to share their nostrils with the level of Japan and South Korea, Chinese was not worthy.

So in the end, it was not GM in the United States who took the first step of "joint venture" with us and made a lot of money, but the later German Volkswagen.

Because Volkswagen was the only big Western company at the time that was willing to both provide us with technology and money.

Signing Ceremony of Volkswagen and SAIC, Great Hall of the People, 1984

Although the most well-known local car brand in China at that time was FAW's Hongqi, because the output and quality have not been improved (only 1540 vehicles were produced in total from 1956 to 1981), and even the leaders were left in the middle of important diplomatic occasions, the central government stopped production in one go. On the contrary, the annual output of Shanghai brand cars produced by Shanghai Automobile Manufacturing Factory can reach several thousand at the highest, although it is still bronze compared with Ford's annual output of 3.98 million vehicles, but it is the only car factory in China that can really mass-produce cars and has assembly lines.

Therefore, the state decided to put the assembly line of the car imported from Volkswagen in Shanghai.

After the story is known to everyone, the Santana launched by SAIC and Volkswagen has become the standard for Di Si counterattack.

How good was Santana in the 1980s and 1990s?

At that time, our family's living standards were like roller coasters because of business, but no matter how depressed my father was, as long as we took Santana back to the village, the rumors in the village about our family developed, and even the tombs of our ancestors began to smoke. As a result, no matter whose corn I broke or whose pears I picked, the other party would never scold and grin, and would even ask me to pick more.

Santana drove out of the Shanghai Automobile Plant, 1988

But at that time, China and foreign countries engaged in "joint ventures" just like our family at that time, looking decent.

At the beginning of the negotiations, SAIC and Volkswagen set a target of 90% localization in 7 years, and in these 7 years, they could import bulk parts from Germany for assembly, but after assembling 89,000 vehicles, they would no longer import parts.

But it wasn't until two years later, in 1986, that SAIC Volkswagen only realized the localization of four parts - tires, signage, radios, and antennas, and the localization rate was only 2.7%.

In fact, the cooperation model of CKD (complete parts assembly) is not the original sin, and Japan also used this model to catch up with the Americans, the key is to see what kind of countermeasures the importing country takes against CKD.

I've seen a lot of people scold CKD, but most of them don't scold on the dot.

At that time, we made a lot of mistakes in CKD, but the most important thing we should not make was the lack of government in the process of localization.

The introduction of large-scale CKD cars will inevitably impact a country's industrial system, so CKD importing countries will certainly set a large number of policy thresholds, these policies often have legal status, policy objectives and policy means are closely coordinated, if they cannot be completed on schedule, they will be punished, and even require the importing countries to withdraw from the domestic market.

China has similar policies, for example, Zhu Rongji told Shanghai Volkswagen that if the localization rate cannot be realized on time, shanghai Volkswagen will be shut down, but this is only a verbal threat.

At that time, we were deepening the reform of the economic system, FAW, second automobile, SAIC and other major car companies were given a high degree of autonomy, so many government interventions only stayed in documents and issued instructions, while Japan and South Korea engaged in a market economy, but did not relax in this regard, thus creating a favorable policy protection environment for the start of the domestic automobile industry.

At that time, in addition to SAIC Volkswagen, CKD was in full bloom in China, Changan Ford, Guangzhou Peugeot, Beijing Hyundai, Tianjin Xiali... Major automobile state-owned enterprises have done a good job in the automobile assembly industry, and they have long forgotten the matter of independent research and development.

Because dry assembly is so profitable!

For example, in the 1990s, the price of a Santana's CKD was 30,000, and the cost after assembly in China was 70,000, and then after layers of price increases, it could finally sell to 220,000, and the supply exceeded demand. This is simply the heart of selling cabbage, making money from selling white powder, you say who is still willing to engage in localization, the heart of selling white powder?

03

Third breakout

The second breakthrough of Chinese car manufacturing is the same as the first breakthrough, some people say that it succeeded because the automotive industry is hot; others say that it failed, because we have been doing something like assembling cars, and we have not completed localization.

The key to the success or failure of localization is the localization of parts and components.

The automobile industry originally had a huge industrial chain, an automobile factory needs thousands of parts suppliers to directly serve it, it is this huge industrial system that determines the height that a country's automobile industry can reach. But at that time, the German "Der Spiegel" weekly said a big truth -

"There are hardly any parts factories in China, and Shanghai Volkswagen seems to be being thrown on an isolated island to produce."

At that time, we built cars like computers, foreigners were responsible for providing the whole set of parts, and we were responsible for assembling them. Later, although we moved from simple parts such as antennas, labels, and tires to localization step by step, the multinational parts industry giants came in and made a crazy merger and acquisition of China's scattered parts and components companies.

In the past, senior technicians were still very popular in parts companies, and since these companies were installed by multinational giants on the designed and stereotyped production lines, senior technicians immediately became unscented, because the assembly line did not need technical workers with 10 years of work experience, they needed cheap carbon-based robots.

For our automotive industry, it's a suck.

The automobile manufacturing industry was originally a technology-intensive industry, but in our case, it has become labor-intensive.

According to the "smile curve" theory, in the automotive industry chain, the largest profit margin is in the field of design and development, parts production, and the lowest profit is the assembly link, which is what we are doing, which is also the root cause of the general low salary of China's automotive industry in recent years.

The "Smile Curve" of the Automotive Industry

We were ambitious, but in the end we became long-term workers for foreigners.

In the "joint venture" in those years, we wanted to exchange the market for technology, and as a result, we both lost the market and did not get the technology.

After so many years of joint venture, although we can make car glass, make cool LED lights, and polish high-grade piano paint... But in the three core components of fuel vehicles - engine, chassis and gearbox, we still have not made a substantial breakthrough, especially the most complex process of the gearbox, simply impossible to start.

It has to be admitted that in the past hundred years, Western developed countries have formed extremely high technical barriers and industrial chain advantages in the automobile industry.

So, how do we break through?

In the second breakout, our biggest problem is that the market does not belong to the market, and the government does not belong to the government. But in the midst of the chaos, we seem to see a hint of vitality again.

Since 1985, we have been implementing a very controversial system , catalogue management.

The so-called catalog management system is to allow only the enterprises in the catalog to produce cars, and at the same time strictly manage automotive products and production sites. This policy was originally intended to improve the situation of China's automobile industry being scattered, chaotic and poor. The result? However, the "directory" itself has become the most scarce thing, which not only hinders the survival of the fittest in the market, but also breeds "rent-seeking" behavior.

At that time, Li Shufu, the founder of "Geely", always wanted to build a car, and the businessman's thinking was, this money FAW earned, SAIC earned, why can't I make money?

Of course he can't earn this money, he doesn't have a production license.

In order to be able to build cars "legally", Li Shufu ran all over the country, begging the state to give him "a chance to fail", but no one birded him. In the end, he thought of a way that was not the way to do it - to cooperate with the Deyang Prison Automobile Factory in Sichuan to produce cars through a backdoor.

Under the system of catalog management, the "Geely" began to develop obscenely. At the same time, a large number of private parts and components companies also began to surface after 1995, such as Lu Guanqiu's Wanxiang Group and Cao Dewang's Fuyao Glass.

Why did a large amount of private capital begin to flock to the automotive sector after 1995?

Because in 1994, the state for the first time proposed to encourage automobile consumption, allow private car purchases, and at the same time have clear localization requirements for joint venture products. Of course, there are two other backgrounds: one is Deng Xiaoping's southern tour in 1992, and the other is that in 1994, our GDP exceeded $500 billion.

The market has been there, the policy has been there, and all kinds of signs indicate that the opportunity for a third breakout is coming.

But is it so easy for Western developed countries to build industry barriers over the past hundred years?

And it is not only Li Shufu who is eyeing the fat meat of the Chinese auto market? In fact, after 1994, multinational giants began to carry out joint venture layouts with Chinese car companies on a larger scale, so in 1997 there was SAIC-GM, in 1998 there was Guangqi Honda, in 2003 there was FAW Toyota and BMW Brilliance...

In addition, with China's accession to the WTO in 2001, it became increasingly difficult for us to protect our auto industry through tariffs.

Therefore, this is destined to be another dangerous and abnormal breakthrough.

But I never expected that when we filled the blood with the determination to die and prepared for the bloody battle to the end, a new era, the new energy era, came.

Oil crisis, global warming, the progress of new energy technology, the hegemony of the "petrodollar"... All of this is madly suggesting to us that sooner or later electric vehicles will replace fuel vehicles.

It's just that this "sooner or later" is a bit difficult to grasp.

And we can accurately grasp the time node, stand on the wind outlet against the wind to turn over, in fact, a little yin and yang error, a little unintentional willow.

Before 2000, Japan's lithium battery was an absolute industry hegemon, and its global share was stable at more than 95%. But in the 1990s, China began to undertake a large-scale transfer of the electronics industry in Japan and South Korea with cheap labor, but at that time, we did not link new energy and car manufacturing.

In 1994, 28-year-old Wang Chuanfu and his workers crowded into a private house in Shenzhen and began to produce nickel-chrome batteries eliminated by the Japanese. Because he could not afford to buy an automated production line, Wang Chuanfu used the idea of "fixture + manual = robot" to create a "semi-automated" production line.

The founding place of BYD: Shenzhen Buji Metallurgical Compound

At that time, a piece of equipment earned $200,000, but a worker's monthly salary was only a few hundred yuan, and soon BYD became China's first and the world's fourth largest battery manufacturer with the "human sea tactic".

In 2000, Wang Chuanfu continued to use his "human sea tactics" to build lithium battery production lines, and became a mobile phone battery supplier for Motorola, Nokia, and TCL.

In 2003, BYD surpassed Japan's Sanyo to become the world's king of batteries.

Another battery tycoon with a technical background, Zeng Yuqun, started slightly later than Wang Chuanfu.

In 1999, 31-year-old Zeng Yuqun, Liang Shaokang and Chen Tanghua established New Energy Technology (ATL) in Hong Kong and successfully entered Apple's supply chain. In 2011, in order to produce power batteries, Zeng Yuqun founded the Ningde era in his hometown of Ningde, and successfully obtained the list of BMW and other car companies.

At this point, China's battery double male began to walk the rivers and lakes in the name of "price butcher", beating many foreign lithium battery manufacturers (such as Japan's Toshiba) to a half-body failure and losing their armor.

In 2004, Musk joined Tesla, but before that, there were two Chinese looked at the track of new energy vehicles. One is Wan Gang, who worked at Audi for many years and later served as The Minister of Science and Technology of China, as early as 2000, he wrote to the State Council to propose the development of new energy vehicles and achieve curve overtaking in the field of car manufacturing; the other is Wang Chuanfu, who has made the battery the world's first, and in 2003, he announced his entry into the field of electric vehicles.

At that time, electric vehicles, like the current meta-universe, were still in the stage of speculation concepts, a batch of virtual ones.

On the one hand, Midea, Oaks, Wuliangye, and Yunnan Hongta are all clamoring to build cars; on the other hand, when Wang Chuanfu said that he wanted to buy Xi'an Qinchuan Automobile and threatened to build electric vehicles, Hong Kong investors called and threatened: "We will throw your stocks, until we die!" ”

In the battery technology is still very crotch, oil is only 30 US dollars a barrel, fuel vehicles are still the mainstream, businessmen are still waiting to see the era, our country actually resolutely chose stud new energy.

Because in the field of fuel vehicles, we are really lagging behind too much.

In the past hundred years, whoever has mastered the core technology of the three core components (engine, chassis and gearbox), who has a complete supply chain, is the king. But we have vigorously built a car for 50 years, and in the end it is a bronze for foreigners to work.

In the new energy era, when the three core components of the engine, chassis and gearbox are replaced by batteries, motors and electronic controls, we finally see the possibility of overtaking in curves, and this time without stud, we may miss another hundred years.

In January 2009, the state began to launch the "Ten Cities and Thousand Vehicles" project, and announced the subsidy standard - the maximum subsidy for hybrid is 50,000 / vehicle, the maximum pure electricity is 60,000 / vehicle, and the hybrid and pure electric buses above 10 meters can enjoy a discount of 420,000-500,000 yuan / vehicle.

As soon as this unprecedented subsidy standard landed, more than 1,500 lithium battery companies appeared in China, most of which were speculative shell companies.

In fact, at that time, the company that did the best battery in China could only achieve a yield rate of 60%.

At this time, Panasonic, Samsung and other Japanese and Korean manufacturers are eyeing the Chinese market, once they set up factories in China, China's fledgling lithium battery industry may go the old way again, reduced to a long-term worker for others. Therefore, in April 2011, the state issued a new regulation - foreign holding companies are not allowed to engage in power battery production. This is also the direct reason why Zeng Yuqun gave up ATL (ATL is a Japanese-funded background) and founded the Ningde era in his hometown of Ningde.

In 2012, China's new energy industry once again reached a crossroads of destiny.

At the time, China and Canada were engaged in a protracted lawsuit.

Quebec Hydro, Canada's largest power producer, confronted the Chinese in Beijing's First Intermediate People's Court because back in 2003, they applied to the State Intellectual Property Office of China for a technology patent that covered almost all manufacturing techniques for lithium iron phosphate batteries.

Once the other side wins the case, our lithium iron phosphate battery manufacturers will only have two paths in the future - either to pay a one-time patent entry fee of $10 million, or to pay a $2500 licensing fee for every ton of lithium iron phosphate used. This means that at the new poker table, someone else touched the king fried, and we touched a pair of threes and played a ball!

At the last minute, the other party played a word game insatiably, and deliberately expanded the scope of patent recognition by modifying some keywords. Since the other side did not talk about martial virtue first, we treated them in the same way as others, and simply rejected their appeals.

China's battery material manufacturers have thus escaped the disaster.

Then we continued to engage in subsidy tactics, the state made up for it, and the local government continued to make up. It is estimated that from 2013 to 2016, our new energy vehicle subsidies exceeded 300 billion.

At the same time, in 2015, the Ministry of Industry and Information Technology issued a document commonly known as the "white list", which clearly stipulates that subsidies are linked to the white list, and only by using the products provided by the enterprises in the list (batteries must be manufactured and developed in China), the automakers can get financial subsidies. This document directly excludes foreign-funded enterprises such as LG and Samsung, which occupy 60% of the domestic large passenger car enterprise market, thus winning a breathing time for the Ningde era.

In 2018, the whitelist was officially abolished.

But at this time, China has emerged in the field of new energy by BYD and Ningde era of two giants, as well as a number of new Internet car-making forces such as Weilai, Xiaopeng, ideal, etc., FAW, Second Automobile, SAIC, Geely and other traditional fuel vehicle companies have also begun the layout of new energy vehicles.

In just two decades, we have not only established a complete supply chain system for new energy vehicles, but also basically realized localization in the core areas of new energy vehicles - batteries, motors, and electronic controls, and some core technologies have even surpassed Western developed countries, such as in batteries, BYD and Ningde era have rushed to the world's top five levels.

As early as 2015, China has officially caught up with the Premier League and the United States, becoming the world's largest new energy vehicle market and the world's largest producer of power batteries.

With a platform ticket for the fuel car era, we finally squeezed into the new energy era train and sat in business class.

04

Write at the end

From 2013 to 2016, when the state vigorously implemented subsidies for new energy vehicles, many people said that this was a "big coin" behavior, because some manufacturers added a few batteries to the chassis of an ordinary van, and the fuel vehicle became an electric vehicle, and it could get tens of thousands or even hundreds of thousands of subsidies when sold.

This is not bad, some manufacturers did not sell the car at all, but the left hand to the right hand, self-production and self-sales, some even cut the battery down and recycled, to achieve the perfect closed loop of business, relying on subsidies to earn to fly.

The country originally wanted to seize the great opportunity of new energy to achieve overtaking in the corners of the car, and as a result, many people found that the curves were full of money, and what car was overtaking?!

It is impossible for the State not to be unaware of all kinds of fraudulent acts. In 2016, two economists, Zhang Weiying and Lin Yifu, also conducted a sensational national debate around "whether we need industrial policy or not". Lin Yifu believes that in order to catch up with Western developed countries in building cars, it is necessary to rely on government subsidies. Zhang Weiying believes that such subsidies are destined to be chicken and egg fight.

From the root point of view, this is actually a debate about the "market economy" and the "planned economy", because in Zhang Weiying's view, such an industrial policy is a planned economy wearing a vest.

In the face of gossip, where should the country go?

In 2016, after a large-scale investigation that lasted for more than half a year, the state held high and low, and only 5 unknown small factories were swept away, and none of the large factories moved. Subsequently, the state began to incorporate battery energy density and vehicle endurance as important subsidy parameters, using the "visible hand" to adjust the industrial structure and point out the direction of the industry.

As mentioned earlier, the first car-making breakthrough, we are purely driven by policy; the second breakthrough, we lost in the market did not return to the market, the government did not return to the government.

Although the third breakthrough has gone through twists and turns, although chaotic, we have found that in fact, at every key node, we have tried our best to achieve the perfect cooperation between the market and the government.

In this process, LG and Samsung, who have been beaten by the "visible hand" and have a blue nose and swollen face, may not be convinced, but it is undeniable that any country, when it goes from being poor and white to becoming strong, is indispensable to use tariff barriers, low-interest loans, industrial subsidies and other means to support national industries, which was the case in the United States, Japan and South Korea.

Why am I writing about the three breakouts of Chinese cars today?

Because these three breakthroughs are a microcosm of the seventy years of new Chinese industry, and also the epitome of the great rejuvenation of the Chinese nation in the past hundred years.

More than a hundred years ago, Li Hongzhang, who signed the Treaty of Maguan with Japan, lived idly in the Xianliang Temple outside Dong'an Gate in Beijing, calmly waiting for himself and the Qing Dynasty to arrive, and then Sun Yat-sen, Zhang Xueliang, and the Nationalist government all proposed the idea of establishing an independent automobile industry, but until 1949, we still did not build a decent car.

After the founding of New China, we were ambitious, but we have been trapped in the debate between "taking class struggle as the program" and "taking economic construction as the center", and because the industrial foundation is too thin, we arched all the way forward, and we fell all the way to the nose and blue face;

After the reform, we swung left and right between the "planned economy" and the "market economy";

It was not until after Deng Xiaoping's southern tour in 1992 that we completely took a step forward and embarked on a path of socialist economic development with Chinese characteristics.

I don't know how far China's new energy vehicles can go in the future, but I know that it took us a hundred years to sit on the card table and talk and laugh with Western car-making countries such as Virtue Day.

More importantly, what we are holding in our hands now may not be the right three, and what the other party has in our hands may not be Wang Fried.

-------------------------------------------

A second book has been published

There is "Deep Sea · Yang Lin", "History of Japan's National Fortunes · Next", etc