Who is selling the anxiety that "there are only 5 Chinese car companies left in the end"?

In the past two years, China's auto market has begun to frequently appear "in the era of smart electric vehicles, only 5 large automobile groups can be left in the end", which has shrouded the entire industry with a haze.

At the recent "2023 China Automotive Chongqing Forum", many industry bigwigs have expressed their views on this issue, most people believe that there are only 5 left, and some people think that 5-10.

Chinese auto companies have always been in a dynamic balance, although in recent years many car companies have disappeared, such as Zotye, Borgward, Qoros, etc., but also broke out a lot of new enterprises, such as NIO, Ideal, Xiaopeng, if you count the new brands incubated by traditional car companies, there are countless of them.

But the car market has never had the extreme rhetoric that "only 5 survived in the end" as it does today.

According to relevant statistics, in 2023, there will be more than 40 new energy vehicle companies that can operate normally in the Chinese market, and more than 200 new energy vehicle brands. If 5 survive, 90% of the companies will die.

But is this statement really true?

We talked to people who are engaged in technology, marketing, and investment in the field of smart cars, and the results are not as rumored by the outside world.  

Where does the "Final 5" come from?

The discussion about the final game of smart electric vehicles was first proposed by new power enterprises and new technology companies, and now many traditional car company bosses have also joined the discussion, and "final 5" has become a high-frequency word, which roughly has several references:

First of all, the global automotive industry has ushered in major changes unseen in a century.

Ideal CEO Li Xiang said that today's smart electric vehicle industry contains two major industrial changes, one is the energy revolution and the other is the information revolution.

Li Shufu, chairman of Geely Holding Group, has also stressed many times that the current global automotive industry chain is facing the challenge of reshaping. The traditional automotive industry chain is based on mechatronics, while the new automotive industry chain is an industrial chain integrating information, communication technology and mechatronics.

Li Shufu believes that for China's automotive industry and enterprises, it is necessary to maintain the advantages of traditional core areas, such as quality control and cost control; It is also necessary to create new revolutionary advantages, and actively layout in human-computer interaction, unmanned driving, central computing, battery replacement and charging infrastructure, energy management, intelligent travel, industrial interconnection, etc.

Li Keqiang, chief scientist of the National Intelligent Networked Vehicle Innovation Center, said that intelligent networking alone involves various fields such as vehicles, transportation, information, electronics, software, and law.

According to the logic of many bigwigs, such industrial complexity also puts forward higher requirements for the upper limit of the capabilities of car companies. Including hardware enterprise scale, capital reserves, technical strength, talents, soft corporate culture, organizational structure, etc. They believe that with such a turbulent wave of market change, many small businesses may not be able to withstand such a strong impact.

Second, referring to mature countries with automobile industries such as Europe and the United States, there are very few large automobile groups and the industrial concentration is very high.

At present, countries such as Europe and the United States are basically several large automobile groups. For example, the traditional car companies in the United States only have three major automobile groups such as General Motors, Ford and Chrysler, and Tesla has only four large automobile groups.

The automobile industry, which is said to occupy one-tenth of the German GPD, has only BMW, Daimler and Volkswagen three major automobile groups in China, and only 4 Opel acquired by PSA are counted.

As a result, many people in China believe that mature automobile industry countries do not need too many car brands. Especially catching up with the reshaping of the automotive industry chain by new technologies such as intelligence, electrification, and networking, will accelerate the reshuffle of the entire industry.

Third, after the entry of new forces such as Internet companies and technology companies, smart cars are compared to the smartphone industry, believing that smart electric vehicles will be software-defined cars, and different car companies will have a strong Matthew effect, and then oligarchy.

This is also the logical line for many bigwigs to infer that there are only 5 smart electric vehicles left in the final game. They believe that once hardware becomes a standard component, the car is a smart terminal, and through software optimization experience to constantly open the gap with opponents, it will show the end of the stronger, similar to the current smartphone market.

She Dangen, general manager of the intelligent car map business of Baidu's intelligent driving business group, said that the connotation of software-defined vehicles can actually be interpreted as "experience-defined cars". After the advent of the era of smart cars, the user's decision to buy a car is often the experience of looking at the car, and the software directly determines the experience of the car.

Taking the cockpit as an example, when "voice recognition + ChatGPT" similar long-term dialogue, as well as multi-screen interaction, gesture interaction, DMS interaction, etc. have a huge difference in user experience. These functions will continue to widen the gap between different enterprises with the later OTA upgrade.

When the proportion of software in the car is getting higher and higher, and even some functions can be determined, it can get rid of the shackles of hardware and let more functions be delegated through software, so that strong enterprises can form dimensionality reduction blows to weak enterprises.

Another example is the magic carpet suspension function, when the function has been software and does not rely on hardware to open the gap, if NIO has a strong accumulation in this regard, it can be delegated to its own 200,000-level low-end model to deal a blow to BYD of the same price.

Many people agree that software is indeed playing an increasingly important role in the era of smart cars, but whether this means that software will play a decisive role in the future competition, no one has given a definite answer.

Can the "Final 5" stand up

The reason for the "Final 5" does not convince too many people, and there are objections to the above point on every point:

First of all, the reshaping of the automotive industry chain is an inevitable trend, but after a period of fluctuations, it will still be a highly differentiated industrial structure with a clear division of labor. It is not that the reshaping of the industrial chain means that the main engine factory has to do everything. In this process, OEMs only need to reasonably handle their own supply chain system and the relationship with suppliers.

For example, the voice, gesture interaction, etc. mentioned above, even if the OEM does not have such capabilities, it can achieve these functions through the supplier.

In fact, at this stage, many OEMs do just that. There are very few full-stack self-developed car companies, and most of them are suppliers' solutions. Many car companies' voice interaction uses iFLYTEK's solution.

Some people also mentioned the case of autonomous driving suppliers, when the first development of intelligent driving, SAIC Chairman Chen Hong put forward the "soul theory", saying that everything will not be handed over to suppliers like Huawei to do, at that time the main engine factory led a wave of self-research boom, but after trying for a while, it was found that it was not the case, and even the wealthy BYD was actively embracing suppliers when laying out intelligent driving.

Even industry insiders revealed that many new force brands that claim to be full-stack self-research are actually done by suppliers, but they are not allowed to say to the outside world.

Second, the European and American market analogy to the Chinese market is not scientific, the two land area, geographical landform, population, culture, etc. have huge differences, European and American automobile brand concentration is high, and represents China's high concentration.

In reality, this huge "sense of fragmentation" in China's auto market is everywhere: under the market-recognized general trend of smart electric vehicles, the penetration rate of pure electric vehicles in South China exceeds 20%, but less than 5% in Northeast China; Independent brands have been rolled up in point-to-point intelligent driving, and foreign brands have not even begun to make efforts in basic electrification products.

In fact, judging China by the European and American markets, there have been cases of misjudgment before.

Around 2015, some people estimated the capacity of China's automobile market according to the population size and geographical structure of the European and American markets, and believed that the upper limit of annual production and sales in the Chinese market was in the order of 40 million.

At that time, there were not a few people who supported this view, and to this day, many people still adhere to this view. Today's reality is that the annual sales of China's car market are not increasing, but declining. As the attributes of cars as a means of travel become more and more intense in the future, consumers' desire to buy is lower, and car sales are further reduced.

Third, it is not reasonable to compare smart cars with the smartphone industry.

The industrial window period of mobile phones is very short, and it is difficult to catch up once left behind, but the cycle of the automotive industry chain is very long, and it is normal for each leader to lead for 3-5 years.

More importantly, the industrial structure of the car is much more complex than the mobile phone, and the hardware is difficult to form differentiation in the mobile phone, but it is different in the car, as small as the wheel hub, as large as the seat can form differentiation, which may affect the preferences of consumers.

In the discussion about the endgame, there is also a very radical statement, "5 million annual sales" is the survival threshold of car companies.

Not long ago, at the 2023 China Automotive Chongqing Forum, Yu Chengdong, executive director of Huawei, CEO of Terminal BG, and CEO of Intelligent Vehicle Solution BU, said that only a few automotive giants will survive in the future, and the annual output will not reach 5 million, or even more than 10 million, and it will be difficult to gain a foothold.

If this standard is followed, the current global market can meet this standard. Only large automobile groups such as Toyota, Volkswagen, and General Motors can reach it.

According to the latest 2022 data, there are only six automobile groups with global sales of 5 million, namely Toyota Motor (more than 10 million units), Volkswagen Group, Hyundai-Kia, Renault-Nissan, Stellantis and General Motors. In the same period, only five Chinese automakers sold more than 1 million vehicles per year.

Get out of the relatively empty castle in the air and back to the real world. There is no standard answer to what is the basic sales threshold for a car company to survive.

The market layout, strategic play, and user groups of each car company are different, but we can still find some quantitative data in the real world.

Based on the 2022 corporate financial report data,

Aian

and BYD's break-even sales figures are 400,000 and 500,000, respectively.

At least for now, the "final five" of Chinese car companies has more opponents than supporters.

Who is trafficking anxiety

Some insiders said that there will be such views flowing out, and two points are worth noting.

First of all, the industry has indeed reached the reshuffle period of industrial change, and after some new technology companies have put forward relevant remarks, traditional car companies do not have such a deep understanding of new technologies, and there will be some people in the clouds. In essence, it's all anxiety about uncertainty.

In addition, returning to the logic of business, business has been "Wang Po sells melons, sells herself and boasts" since ancient times. Everyone's speech is essentially serving their own business.

For example, a traditional car company boss just sprayed unmanned on the front foot, and the rear foot was recruited on a large scale, and the supplier and self-research were both at the same time to make intelligent driving.

Some people say that the driverless and automatic driving he said are different, but some people think that this belongs to the typical concept of stealing, automatic driving is the premise of realizing unmanned driving, in the academic only the level is different, the legal responsibility definition is different, but there is no too obvious definition in function.

Later, he was rebuked, either not knowing how to do it, or saying it on purpose. Because their own enterprises are not good in this regard, they must weaken the market demand in this regard.

For example, not long ago, a technology company boss said that the era of intelligent automobiles, different from the traditional era of fuel vehicles, the investment scale of car manufacturers is very large, if the investment is not enough, it cannot support competition. Small and medium-sized players may not be able to keep up without heavy asset investment to support sustainable development in the future, and cannot become giants.

"XX's strategy is not to build cars, but to help car companies build and sell good cars. I believe that the manufacturers who work closely with XX can survive and become a few survivors of this generation. ”

It's almost a direct public shout, not cooperating with XX means that it is difficult to survive.

Looking at it now, the conclusion of the "final 5" of Chinese car companies seems to have been deliberately amplified.

Come and hear a different sound. Not long ago, on the 15th China Automotive Blue Book,

Nezha cars

CEO Daniel Zhang mentioned a point that 3 years ago, everyone was talking about how long traditional car companies can live, and now traditional car companies are discussing when new forces will die. But looking back, no one killed anyone.

He called on the industry not to sell anxiety, not to worry too much about the future, do what is in front of you, and let the market and time decide.

In comparison, we actually recognize Wang Xing's "4 3s" prediction. Wang Xing is only talking about Chinese brands here, if you count joint venture brands, at least no less than 20.

Some auto industry analysts said that they would not talk about castles in the air after 50 years. At least until 2030, the final 5 argument is completely untenable.