The reform of state-owned car companies has accelerated sharply in the past two years. SAIC Motor group successively "bet" on Zhiji Automobile and Feifan Automobile, and Dongfeng Motor incubated and established Lantu Automobile within the system. Changan cooperated with Huawei and Ningde to launch Avita Technology Company. GAC Aeon recently released a series of equity change information, plans to go public independently, and implements equity incentive schemes such as employee shareholding.
Under the curtain of mixed reform, Changan Automobile, located in Chongqing, has attracted special attention from the outside world. Judging from the performance after 2019, Changan Automobile seems to have entered a strong cycle, which verifies the effectiveness of active reform. But in a fully competitive industry, is Changan Automobile short-lived, or is it on the road to truly sustainable development?
"In fact, traditional car companies are very anxious, even if the top management wants to desperately transform, it is difficult to carry out because of the inertia resistance. But it doesn't work, because that's the only way out. Zhu Huarong, chairman of Changan Automobile, said.
Three times entrepreneurship
Changan's third venture began in 2017, and the first venture dates back to 1980. Like many large state-owned enterprises at that time, the problem of tens of thousands of people eating in the whole factory was difficult to solve. In this context, Changan Automobile launched its first innovation and entrepreneurship, marked by the first mini-truck off the production line in 1984, Changan Automobile officially entered the vehicle manufacturing industry.
In 2000, Changan Automobile began its second venture, this time in the direction of entering the passenger car market. In 2003, Changan Automobile began to develop the small car Benben, and since 2005, it has successively launched the first generation of passenger car products. However, almost all of the first generation of passenger cars were launched in failure, and only The Ben initially achieved a certain sales scale.
Zhu Huarong called 2004 the most anxious year in changan automobile's 36-year career, "We proposed a joint venture and independent 'two-legged walking' in 2000, began to do independent passenger car research and development, and successively launched several models that failed, the cost remained high, there were many quality problems, and it was particularly anxious." ”
The failure of the first generation of passenger cars made Changan Automobile realize that the quality level of products that are manufactured by the standard of mini-trucks is very different, and all systems must be rebuilt. For example, mini-trucks only study the function of the product, do not study the needs of users, this working method is brought to the development and manufacture of passenger cars, and the products produced are poorly assembled and far from the actual needs of users.
It was not until 2009, when The second generation of Changan Automobile's passenger car products such as Yuexiang and Yidong were introduced to the market, changan automobile emerged in the market, establishing a brand and reputation, and in 2015 and 2016, Changan's own brand passenger car sales exceeded 1 million units for two consecutive years. Coupled with the joint venture segment and the traditional micro-car business, Changan Automobile's overall sales volume reached 3.05 million units.
In 2017, Changan Automobile also realized the threat of the Internet to the traditional automobile industry. At that time, the wave of new car-making movements in China surged up, and entrepreneurs from Internet and technology companies joined the ranks of car-making.
In the user survey, Changan Automobile found that the definition of smart electric vehicles by young users is not a car in the traditional sense, but a new species, and the customer group is facing the differentiation of choosing old world products or new species. So the biggest enemies of the entire auto industry, including Tesla, will come from the Internet and the tech industry.
"Will there be a change in the car from a feature phone to a smart phone?" What would we do if we got to this point? Will our proud manufacturing ability become someone else's foundry? Zhu Huarong said, "As a high-value commodity, the automobile is very different from the general retail commodity, and invisibly builds a wall that gives us time to think and transform." At present, although the new forces cannot subvert us, they are eroding little by little. ”
In October 2017, Changan Automobile launched its third innovation and entrepreneurship. This transformation will focus on software and ecology in the future industry, focus on responding to the impact of the Internet and intelligence in advance, and become an intelligent low-carbon travel technology company.
Changan Automobile's original idea was to turn to a travel company and do car sharing. In 2017, the concept of shared mobility is hot, and Changan Automobile's internal focus on the future business may be 2B instead of 2C. The second iteration adjusted the direction to electrification and intelligence, and proposed the Beidou Tianshu and Shangri-La plans, but the electrification goal was relatively less radical.
The third iteration is after Tesla's localization, the new energy vehicle market has undergone great changes. Changan Automobile began to shrink shared travel, adjusting its focus to the electrification of traditional power, pure electric, and intelligent hardware development, and terminated many projects that transitioned technical routes. Later, Changan Automobile found that in the era of software-defined automobiles, mastering full-stack technology will be the key to supporting the competitiveness of future products, so it carried out a new round of technical layout in the field of intelligence.
"In this major change that has not occurred in a hundred years, especially in these years, no one can guarantee that they can see clearly, and they must quickly iterate to adapt." Wu Tao, general manager of the strategic planning department of Changan Automobile, said.
However, even if the direction is found, the transformation of traditional car companies is not easy. With the development of technologies such as automotive OTA and autonomous driving, more and more mechanical control mechanisms are turning to electronic control, which makes the engineering department, which used to be known for machinery, face great challenges. He Gang, executive deputy general manager of Changan Automobile Intelligent Research Institute, said: "Large automobile companies are usually tens of thousands of people,000 people, and the industrial chain also involves thousands of TIER1 and TIER2 suppliers. Transformation is not only our transformation, but also our partners. ”
The worry behind the sales champion
"We have also been studying Chang'an, and its independent business and wolf culture are very rare in state-owned enterprises, especially central enterprises." Wang Wu, a management member of Dongfeng Motor, said.
Wang Wu said that among the state-owned car companies, Changan Automobile can be called a unique existence. Among the six state-owned groups of FAW, Dongfeng, SAIC, BAIC, GAC and Changan, Changan Automobile's joint venture sector is the weakest, which is reflected in both the small number of joint ventures and the low profit contribution of joint ventures.
In the first 11 months of this year, the total sales volume of Changan's own brands reached 1.6314 million units, an increase of 19.77% year-on-year. If there are no accidents, Changan Automobile will become the sales champion of China's independent car companies this year. At the same time, Changan Automobile is not only the only state-owned automobile company with more than one million self-owned brands, but also the only large state-owned automobile group whose net profit of independent business has been continuously positive in the past five years, and the profit contribution of independent business in some years has exceeded that of the joint venture sector. From the perspective of the dependence of the joint venture sector, Changan Automobile is relatively a state-owned car company with the least pressure for the liberalization of the equity ratio.
Jiang Aiqun, general manager of the human resources department of Changan Automobile, believes that the reason why Changan Autonomous Passenger Vehicles can achieve today's results is on the one hand because of the special birth background and corporate culture of Changan Automobile, on the other hand, because there are no more joint venture companies to rely on, can only rely on their own strength, "Changan's culture is vividly reflected in some aspects, self-improvement, self-reliance." ”
However, in the new business field facing the intelligent electrification track, new energy vehicles are the biggest shortcoming of Changan Automobile. In the first 11 months of this year, Changan's new energy vehicle sales were 93,500 units, an increase of 249% year-on-year, but its business volume was in a relatively backward position in the overall industry trend. In addition, high-end intelligent electric vehicles have been favored by more and more users, while Changan Automobile's high-end intelligent electric vehicle business is still blank, and Avita Technology's first car will be delivered by the second half of 2022.
In fact, on the new energy track, not only Changan, but also state-owned car companies as a whole are in a backward state. In the first 11 months of this year, the production and sales of new energy vehicles in China were about 3 million units, an increase of 170% year-on-year. The industry estimates that domestic new energy vehicle sales will be 5 million to 5.5 million in 2022. However, in the list of the top 20 models sold this year, only 3 cars are from state-owned car companies.
Zhu Huarong said that Changan Automobile's new energy products have not yet been put on the market in large quantities, and the products previously released are more to cope with the "double integral" policy and make a certain amount of limited losses. Next year, Changan Automobile will launch three special platform products for electric vehicles, economic benefits, commercial profit models will change rapidly, "In addition, we must also see that battery technology still has some industrial problems, such as safety is not completely solved, high and low temperature efficiency and ease of use of the problem, as well as the cost of batteries and the problem of precious metals in the industrial chain, new energy vehicles should have a battery revolution." ”
A new round of scientific and technological revolution has promoted the comprehensive restructuring of the automobile industry, and the automobile industry has also undergone a rapid transformation from hardware-led to software-led, and the organizational structure and supply chain relationship of traditional automobile companies will be reconstructed. Moreover, a series of new technologies such as the Internet of Things, big data, cloud computing, artificial intelligence, and blockchain, which are closely related to intelligence, are not the strengths of traditional automotive companies.
Zhang Lin, an autonomous driving engineer who jumped from SAIC to a new car-making force, told reporters that from the perspective of research and development, the organizational structure is another difficulty for traditional car companies to transform intelligent electrification. The R&D department of traditional car companies usually adopts a pyramid and matrix organizational structure, and is divided into departments according to professional modules such as chassis, powertrain, and body. The autonomous driving department was formerly known as the electronic and electrical department of traditional car companies, and the electronic and electrical department was earlier a branch of the chassis or body department.
"In the past, the positioning of electronic appliances was to serve the chassis, the general manager, the interior, a new department, it was difficult to propose new solutions to the older departments; and the new and old departments were accustomed to considering a series of problems from their own perspectives, and it was not easy to compromise." Zhang Lin said.
Zhu Huarong said that when the company's senior management determined the transformation strategy of innovation and entrepreneurship, he made three internal lectures, "It is reasonable to say that I talk about it once is enough, why should I talk about it three times?" It was because at that time, many people did not understand the corporate transformation strategy in place, and they always felt in their hearts that 'the third venture', 'intelligent low-carbon travel', and 'technology companies' were too vain. ”
"We've spent two or three years unifying our thinking. The greatest enemy of strategy is inertia, and inertia can make us lose our imagination and motivation. Zhu Huarong said that within the enterprise, inertia is divided into two levels, the first is the inertia of success, especially the working methods and thinking modes that make products successful in sales. Today's automotive technology, products, users, business models have undergone revolutionary changes, in this case, the more successful the previous few years, the easier it is to fall into the inertia trap.
The second inertia is that state-owned enterprises naturally bear greater social responsibilities and obligations, and cannot simply pursue capital profits as the goal. State-owned car companies are less likely to turn to electrification at a large loss, so when companies need to transform, the constraints of the system are like a running carriage tied with a rope, and it cannot turn quickly. "But the problem now is that if you go along the existing inertia it is a dead end, even if the inertia resistance is greater, you have to turn the front of the car over." Zhu Huarong said.
Radical reforms
After the CS75 PLUS was launched, Changan Automobile's new models were generally launched intensively as dumplings, and the newly launched models generally achieved sales success.
In the first 11 months of this year, Changan Automobile had 2 products with monthly sales of more than 20,000 vehicles, 4 products with monthly sales of more than 10,000 vehicles, and 3 products with monthly sales of more than 5,000 vehicles, with a total monthly sales of more than 100,000 units, UNI-T and other products entering the hinterland of joint venture brands with higher prices, and the monthly sales of the UNI series continued to exceed 10,000 units. In the view of Song Ming, head of the strategic planning department of a local state-owned enterprise, behind the realization of "multi-point flowering", it reflects the process system and ability of enterprises to make correct product decisions.
Zhu Huarong said that due to the long cycle of development of automotive products, if one or two car investment fails, it will lead to large fluctuations in corporate performance in the product cycle of 5 to 6 years. To solve this problem, the first thing to rely on is the organizational culture, "colleagues and colleagues are positive, upward, optimistic, the company dares to speak out, rather than a leader with particularly high authority." ”
There is a saying inside Changan Automobile called "guiding leaders to lead", Zhu Huarong said that after entering the leadership position for two or three years, the professional ability of managers is not necessarily stronger than that of front-line experts, so Changan Automobile encourages subordinates to learn to "lead your leadership", and senior management should learn to listen to the opinions of professionals and data-based reports. Jiang Aiqun also said: "All decisions are risk decisions, and there must be a fault correction mechanism and continuous PDCA (plan, implement, inspection, action) within the enterprise in order to respond quickly and execute efficiently." ”
Since 2017, Changan Automobile has implemented a reform of the distribution mechanism internally, and now it seems that this reform has played a key role in promoting the inertial resistance of enterprise transformation and improving the success rate of products.
He Gang told reporters that in 2017, Changan Automobile began to implement the project with the investment system, the project of mass production vehicles has clear sales, profits, market share indicators, the core personnel in the project, in addition to individual regulatory departments, research and development, manufacturing, sales, technology, brand, product planning department and other middle-level management cadres, in accordance with the principle of voluntariness to come up with a certain amount of money to "invest" in this project. If the project meets the standard, the investment money can not only be returned in full, but also get the corresponding proportion of incentives; if the net profit of the project exceeds the target, the person who follows the investment can also enjoy the profit dividend of the excess part. "With the follow-up mechanism, people will sit down and solve the problem, because a group of people are going for a goal." He Gang said.
Zhu Huarong also said that the core of the automobile industry is the product, the product basically determines the company's development and future, grasping this core depends on employees, the project and the investment system really bundle the interests of employees and the success of product projects, "In the past, product development, decision-making was top-down." Now it is very simple, if this project is not followed by everyone, and there is no need to lead decision-making, the project will naturally terminate. Everyone followed the investment to show that it was optimistic, ensuring the success rate of the project. ”
In order to cope with intelligence and transformation to technology companies, Changan Automobile's organizational structure has been adjusted, which can be briefly summarized into small headquarters, business groups, shared platforms and incubation innovations. The business group refers to a number of business units within Chang'an, the core responsibilities of the business department are mainly user research, brand promotion and product marketing, and the sharing platform means that all the resources that can be shared by the entire group must be fully integrated and fully shared, including human resources, manufacturing resources, research and development resources, etc. These initiatives involve a range of changes in management relationships and the redistribution of power.
In addition, Changan Automobile has reconstructed a management mechanism and incentive means that are completely different from those of traditional research institutes through the establishment of new subsidiaries. "In this round of industrial restructuring, not only the structure of automotive talents has changed, but also the needs and psychology of talents have also changed, such as the personal pursuit of software engineers and hardware engineers is different. Therefore, we decided to set up several innovation incubation centers to meet the different needs of different talents. Zhu Huarong said.
Changan New Energy Company has completed a round of financing of 2.8 billion yuan, and the B round of financing is 5 billion yuan, which will be completed by the end of this year if it is successful. The financing of Avita Technology was also recently completed, and Changan Automobile's shareholding ratio was diluted from 95.38% to 39.02%. In response to the problem of changan automobile's equity ratio diluting too quickly, Tan Benhong, chairman and CEO of Avita Technology, said that Avita technology is an independent entrepreneurial project incubated by Changan Automobile, and its goal is to achieve more market-oriented and more flexible operation.
Liu Qinghong, general manager of the capital operation department of Changan Automobile, said that in recent years, the controlling shareholders have been very supportive of changan automobile's market-oriented operation, so in terms of mixed ownership reform and activation of institutional mechanisms through financing, Changan Automobile is relatively advanced in state-owned enterprises.
From the perspective of Li Si, who jumped from a state-owned car company to Weilai Automobile, in addition to the problem of distribution, state-owned car companies also include fault tolerance, coordination of internal resources, and cross-departmental and cross-company collaboration. Up to now, SAIC, GAC, BAIC and Changan have all incubated a new intelligent electric vehicle project outside the system, so as to try more innovations in mechanisms, systems and talent incentives, and more fully connect with external capital and resources.
"Mechanism is fundamental, and mechanisms live to live." Within the regulations and state-owned assets management system, the mechanism can be flexible and diverse. Employee shareholding in state-owned enterprises is difficult to do, but you can explore it when you hatch it. From this point of view, SAIC Zhiji and Changan Avita are of strategic significance, and they solve not only the problem of mechanism, but also the problem of resources. Including Huawei, the resources of the Ningde era and funds, if it is a parent, it is difficult for these companies to come in. Liz said.
In March this year, Zhu Huarong listened to the press conference announced by Xiaomi Company on the way to business, and he realized that the new track characterized by software, new energy and intelligence has been fully opened, and the competitive pattern of the century-old automobile industry is being broken, and traditional automobile companies, new car-making forces and ICT companies are competing on the same stage, and the future automobile companies will be deeply integrated with the Internet.
"There are new tracks, schedules and formats in the automotive industry, which are new questions for everyone. This is a big wave of sand and sand process, traditional car companies will be eliminated some, new forces will also be quickly eliminated, ICT companies will not be successful. I think that the three forces have their own advantages and disadvantages, mutual penetration, whoever has a strong learning ability, who can win, who despises no one will not succeed. Zhu Huarong said.
(At the request of the interviewee, Song Ming, Wang Wu and Li Si are pseudonyms)