20 years of joint venture of Chinese auto companies


The joint venture of Chinese auto companies for 20 years has made the Chinese "sedan dream" no longer a fairy tale in winter. This is the joint venture's contribution to the Chinese auto industry. Photo by Liu Jianmin

Starting from July 1, the tariffs on imported cars from China will be reduced from 28% to 25%, which is the last time China's tariff rate on imported cars has been lowered. In this regard, Ding Hongxiang, general manager of the China Automotive Import and Export Trade Center, said: "For imported cars priced at tens of thousands of yuan or even millions, a 3% tariff may affect only 1% of the vehicle price."

On the other hand, no one has considered the factors of tariff adjustment on the back of the hot and cold Chinese car market and price trends. When China first joined the WTO, it was often discussed with reporters: Is it good to buy pure imported cars in a few years, or do you want to buy domestic cars now? Now that this discussion has gone, China's automobile manufacturing has finally come from shore.

Localization of parts is written into joint venture terms

When we greatly praised the self-owned brand companies, when we applauded Chery and Geely, some people asked: If the auto companies had joint ventures for 20 years, what did the original intention of using the market for technology changed? Technology is human, brand is people, not to talk about R & D!

It seems that the people who make cars in China are all respectful and forgetful of their ancestors. The veterans of the joint venture have come out and talked about how the joint venture will engage in its own brand.

The joint venture is far-fetched in its own brand, but some insiders point out that all of China's own brands are based on the industrial foundation provided by the joint venture.

FAW Group officials told reporters that 15 years ago, when FAW signed a joint venture agreement with VW, it helped FAW to establish the Jetta parts production system.

The reckless oil spill incident and the Beijing modern steering wheel dregs incident made people question that the higher the localization rate, the lower the quality. However, when Shanghai Volkswagen made localization, Chinese personnel did not understand the requirements of German Volkswagen's door handle in addition to conducting reliability tests in China. Not only parts and components, but also packaging must reach the German public standard.

The German side insisted that Shanghai Volkswagen should be required to comply with their standards. Some Chinese personnel at Shanghai Volkswagen felt that it was the Germans who had made things difficult for them. After hitting Zhu Jiji, the mayor of Shanghai at that time, Zhu Jiji hammered out: "Localization must be strictly according to popular standards." To this end, a localization office was set up.

In the past, history is like smoke. Santana is still loved by Chinese consumers and ranks among the best in sales; Jetta has built a reputation for “durable and durable” without overhauling 600,000 kilometers. Relying on this word of mouth, Jetta has remained a single player in the fierce competition of launching a new car in an average of 3 days. The brand sales championship, relying on this word of mouth, Jetta will soon exceed the million mark. Those who understand cars know that cars with more than 100,000 yuan are the worst, and they require both a certain level of technology and a poor use environment. Santana and Jetta held up the Chinese auto market for 20 years, demonstrating that localization is not an attribute of quality reduction.

Localization has established a preliminary parts manufacturing platform for the Chinese auto industry, providing a starting point for the creation of independent brands. This is the largest contribution made by the joint venture to the development of the Chinese automobile industry.

Joint ventures foster talents from manufacturing to management to research and development

When people questioned what the "market-for-technology" road brought us, there is a view that the people of the joint venture are "foreign slaves" and that joint ventures are a shortcut and can be saved.

The old man of FAW-Volkswagen once told this reporter a story: At that time, Volkswagen AG gave the used Jetta production line in North America to FAW. The cost of dismantling the production line is the responsibility of the Chinese side. In order to save money, it has never seen anything like a robot, FAW workers whose 26 letters are incomplete and decided to dismantle their own production lines. They took a piece and marked it on the drawing, and dismantled the drawing and picked it up from the ground to the roof. With the snow and snow from North America, the first thing for FAW workers to go to work every day is to raise the national flag and sing the national anthem. Those who engage in joint ventures never forget that they are Chinese. What they do is the Chinese auto industry.

In the 20 years of the joint venture, Shanghai Volkswagen has sent hundreds of people to Germany for training. Chen Hong, Qin Huanming and Zeng Qinghong, the outstanding talents in automobile management that emerged from the joint venture, have now become the pillars of the national auto industry management. At present, almost all upgrades from R&D to adaptability improvement to process design and manufacturing standard formulation are mainly Chinese engineers.

Yin Tongyao, coming out of FAW-Volkswagen Assembly Plant, has been working hard for years to make “Chery” a star of its own brand; Nanyang General Manager of Shanghai Volkswagen has entered the Geely Group. Among Chery, Geely, and Brilliance, the pioneer companies of China's own auto brands, we can all find R&D engineers from FAW Group and Dongfeng Group, and they have almost all experience in joint venture projects. In the introduction of joint venture projects, in the process of product upgrading and R&D, they learned from experience and accumulated preliminary automotive R&D experience.

The joint venture became the window of China’s modern automotive work managers and engineers to the world, becoming the first battlefield for them to learn and practice the modern automobile industry. This is the second largest contribution made by the joint venture to the Chinese automobile industry.

The vigorous development of joint ventures has enabled the people to enjoy the civilization of cars

Nowadays, for a family living in a developed city and a middle-income family, having a car is nothing new. The reform and opening up created a huge demand for the car market. However, without the hard work of the joint venture for 20 years, the huge demand can only be a hollow.

At the beginning of the reform and opening up, the central government determined the train of thought for the introduction, digestion, and absorption of foreign companies' experience. The auto groups are ambitious and have lobbied international auto giants to come to China. However, only willing to go to China to "adventure" is only the German public family.

The brilliant achievements made by Germany's Volkswagen in China made China's auto giants look down upon and regretted. Afterwards, they all entered China. Today, the Chinese market is the largest battlefield among the various automobile powers. The cheap labor force in China, the automobile manufacturing system initially formed in China and, most importantly, the strong market demand in China ... have become the reasons for latecomers to come to China. Once Santana swept China, a single species gave the user no choice. Today, on average, a new car is available every three days. The new car market is the world's best.

In just a few short years, China’s total car sales have already ranked third in the world! In addition to the economic development factors, the sales of millions of vehicles each year will not be tested by a certain manufacturer. It is a system of Chinese automobiles from production to sales to after-sales service. In other words, the Chinese market has been able to withstand the growth of millions of wheels per year, and China's auto industry system can not withstand the rapid growth of it? When hundreds of thousands of Chinese people are happy to open their cars, the answer is self-evident.

A brief examination of China's automobile after-sales service system shows that the most complete is a joint venture. The service system of independent brands is largely based on the experiences and even standards of the joint-venture after-sales service system.

The joint venture of Chinese auto companies for 20 years has made the Chinese "sedan dream" no longer a fairy tale in winter. This is the third largest contribution made by the joint venture to the Chinese automobile industry.

When the industry joined China in the WTO, whether the auto industry could withstand the doubts. The reporter saw and heard too much is the fear of the wolf! When the reporter interviewed a deputy general manager of FAW Group at the time and asked him about the prospects of China's auto industry after joining the WTO, he looked back and said: "The tonnage truck is definitely not a problem, the sedan..." No conclusion was given, but there was a clear concern.

This conclusion, in June 2006, China's auto industry is about to step out of the last tariff threshold, that is: the self-owned brand is booming, the car enters the family; the Chinese auto industry can already mass production from Audi, BMW to Passat, Accord, then Jetta, Excelle; A-class cars to the A0-class own brand of automotive absolute advantage, domestic cars become the mainstream of China's auto consumption market.

The introduction of foreign capital, digestion, absorption, and automobile joint ventures are no Chinese auto industry.



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