Auto industry leaders debate "internal competition": Zeng Qinghong says this is not the way to go, while Wang Chuanfu says we should actively face it without anxiety

At the 2024 China Automobile Chongqing Forum, automotive executives expressed their thoughts on the market "competition".

On June 7th, Wang Chuanfu, Chairman and President of BYD, stated in his speech that competition in the industry has evolved to include aspects such as pricing, technology, and scale, as well as concepts like "bossing" and "traffic".

He emphasized that competition is the essence of a market economy, and entrepreneurs should not be anxious but actively embrace and participate in competition. "I believe all entrepreneurs should embrace and participate in competition, develop through competition, contribute to the country, support Chinese brands, and build world-class brands," said Wang Chuanfu.

On the same day, Li Shufu, Chairman of Geely Holding Group, also delivered a video speech at the forum. Li Shufu believes that the industry needs transparent and fair competition, and that aggressive price wars will lead to disorderly competition.

Li Shufu pointed out that the degree of internal competition in China's automotive industry is the highest globally, with successive waves of price wars. He sees this phenomenon as both good and bad, stating, "If the level of marketization is high, the laws are sound, enforcement is strict, and there is transparent and fair competition, then it is a good thing; otherwise, it is a bad thing. The healthy development of any industry must demonstrate good economic benefits in terms of input-output ratio. Endless internal competition, aggressive price wars, will result in cutting corners, counterfeiting, and disorderly competition that is not compliant. For the automotive industry, healthy competition in accordance with the law is very important. Only through healthy competition in accordance with the law can sustainable high-quality development be achieved."

Just a day before on June 6th, Zhu Huarong, Chairman of Changan Automobile, and Zeng Qinghong, Chairman of GAC Group, also shared their insights during the forum.

Zeng Qinghong criticized the severe internal competition in the industry, stating that continuing in this manner is not a solution. The goal of enterprises is to make profits, and then contribute to society through taxation and employment. He emphasized that the automotive industry should have a big picture, a broad view, focus on long-term strategies, and not engage in cutthroat competition.

However, at the same forum, Zhu Huarong expressed a different viewpoint. He stated that competition is a normal process of driving out inferior products with superior ones, and is the best way to quickly return the industry to healthy competition.

Zhu Huarong believes that in the next decade, more Chinese brands will become world-class brands through competition, reaching new heights and maximizing user benefits.

Interestingly, the topic of "equal rights for oil and electricity" also received widespread attention at the forum.

Zeng Qinghua mentioned that although the rapid development of new energy vehicles has brought joy to the industry's transformation and upgrading, the rapid development also comes with concerns. "The rapid development of new energy vehicles is undoubtedly a good thing, but its unexpected growth, especially in unconventional development compared to industry planning, has caused a huge impact on the traditional automotive industry."

He called for measures to promote "equal rights for oil and electricity", support the transformation and upgrading of traditional automotive companies, and achieve balanced development between new energy and fuel vehicles Li Shufu stated in a video speech that electric vehicles are not equal to new energy vehicles. Currently, about 70% of China's energy structure is coal-fired power, while various clean energy sources account for about 30%. How to achieve clean utilization of fossil energy and how to scale up the use of clean energy are key factors determining the fate of electric vehicles.

He also mentioned that safety is the basic prerequisite for automotive products. How electric vehicles compete with internal combustion engine vehicles throughout the entire value chain and achieve comprehensive victory still involves uncertainties.

On June 5th, the latest data released by the China Passenger Car Association showed that the retail sales of new energy vehicles in May reached 790,000 units, a year-on-year increase of 36% and a month-on-month increase of 17%. The wholesale volume of new energy passenger vehicles from manufacturers nationwide in May was 903,000 units, up 33% year-on-year and 15% month-on-month. Among them, BYD continued to lead the market with a monthly sales volume of over 330,000 units, with a market share of over 30%