Xu Changming: Rise of Post-95s Gives Independent Brands More Opportunities

Xu Changming, Deputy Director of the State Information Center

On September 3-5, 2021, the 17th China Automotive Industry Development (TEDA) International Forum (hereinafter referred to as TEDA Auto Forum) was held in the Binhai New Area of Tianjin by China Automotive Technology and Research Center Co. The 17th China Automotive Industry Development (TEDA) International Forum (hereinafter referred to as TEDA Automotive Forum) was held in Binhai New Area, Tianjin. The forum is centered on the theme of "Integration? Innovation? Green" annual theme, focusing on the industry's hot topics for discussion.

In the "Summit Seminar: Digital Empowerment and Innovation in the Automotive Industry" on September 4, Xu Changming, Deputy Director of the National Information Center, delivered a speech entitled "Digitalization of the Automotive Industry from the Consumer Side.

Xu Changming mentioned in his speech that the percentage of post-95 consumers in the automotive market will increase dramatically in the next few years. This group of people is living in an era of material affluence and technological explosion, and the environment in which they grew up has led to the diversification of the values of this group of consumers, which are obviously different from those of the post-60s and post-70s. They are more likely to label themselves as trendy, artistic, intelligent and environmentally friendly, etc. These people pay more attention to quality, performance, applicability and other attributes when buying a car, but do not care much about the price and brand; and they have a higher demand for intelligentization. Such consumer characteristics characteristics, but also let the future development of independent brands have more opportunities.

The following is a transcript of the speech:

Good afternoon everyone, today I would like to look at the digitalization of the automotive industry from the perspective of the consumer, the buyer, and in fact, the development of intelligent vehicles.

Our country's consumers will see such a big change in the next few years, the percentage of post 95 will increase dramatically, the post 60 and post 70 will become less and less, and the post 80 will basically remain unchanged, this is a big trend.

Let's look at the post-60s and post-70s. The post-60s and post-70s grew up in a context of material scarcity, slow development, and relatively small socio-economic and technological changes, which is a characteristic. But we know that a person's values, lifestyle and consumer behavior is absolutely related to the growing environment, growing background, this growing environment has their characteristics. We see that the GDP per capita was 90 dollars in 1960, 131 dollars in 70 years, and 195 dollars in 80 years. The 60s and 70s grew up under such a level of GDP per capita, so they have their own characteristics.

But the Post-95 generation is different, this generation has two major characteristics of the living environment, the first material affluence, and the second is the technological explosion. Let's take a look at the situation of material affluence, the GDP per capita was close to 1000 dollars in 2000, and more than 4000 dollars in 2010, which means that the 95-year-olds grew up in a very materially affluent environment. So these people are consumption resources, the 60s and 70s are accumulation resources, and the 95s have very good material conditions.

Another feature is the technological explosion. Internet big data, cloud computing, the Internet of Things, 5G, artificial intelligence is endless, 95 is the Internet aborigines, everything related to intelligence is these people are the first to consume. So we say there is a big difference between these two generations, the 60s and 70s people consume things about big brands, a lot of the percentage is different from the post 95s.

If the independent brand of the car, you want to target the 60s and 70s to do, I think it is very difficult, but also a very solidified impression. Buy high-end car is BBA, generally is Toyota Honda Volkswagen, but after 95 is not the same, the values are diversified, obviously not the same as 60, 70, there is a labeling culture. Everyone has to label themselves, trendy, literary, smart and environmentally friendly, and so on. These people buy a car quality, performance, applicability is a must-have attribute, something is not good certainly not, but this alone can not, they will be impressed by something other than quality. Nowadays, smart things are very important, so the post-95 generation can spend the money of two generations, they have a stronger consumption ability.

We often do research, many people buy a car parents to help with the down payment, and then their own monthly payments, and there is a loan, they have a stronger spending power. The second feature to buy clothes can be very cheap, but can spend a million to buy a Tesla.

Another feature for the independent brand is a great benefit, that is, after 95 people have no prejudice for the national and foreign goods, many people study abroad, some very young went out, some go out to travel very much, these people see a wide range of what is good in the United States, Japan, South Korea, what is good to know, so there is no prejudice, what is good in China know that, and this round of the rise of the national products also have a great deal of The relationship.

Last time I went to the ideal to do research, they said that the rise of a country's national products occur in the per capita dollar 10,000 U.S. dollars or so, we look at South Korea is, Japan is, this node of the quality of product production is guaranteed, the level of technology to a certain level, in addition to the people's self-confidence, so now we have the national trend of the wind in the last few years, that is, the per capita GDP of 10,000 U.S. dollars before and after the rise. This is also good for the automotive industry, the Internet aboriginal innate, in this case for the acceptance of the smart car is relatively high.

Huawei went to do research people say, other areas of intelligent deeper, wider range of people are prone to take the lead in accepting the smart car. The first to accept the smart car is certainly not 60 and 70 after, some people accept but the proportion will be relatively low, but after 95 in other areas of intelligence is very high, many homes are intelligent, a large number of intelligent things at home. These things together I think from the consumer side, to give us a very good opportunity to digitize the product.

We look at the different generations of people, the people who are interested in autonomous driving and very interested in the people are not the same, we do this research every year, every year to do 100,000 samples of the survey, the younger the people are interested in the proportion of the autonomous driving the greater, after 00 and 90 is different. In China, there are too many intelligent things in daily life, and consumers have already formed the habit, and the car is also the same, so the car networking is also certainly a big trend.

Plus now the industry chain, many high-tech companies also see the trend, have joined. The United States a Tesla, an Apple, Tesla car we have seen very good sales, Apple official announcement of building a car, everyone for Apple's car to give very high hopes.

We have a large number of domestic high-tech companies have also entered the game, I saw yesterday millet car registered in Beijing, and Huawei is also doing hardware and software systems. So we have high expectations for Xiaomi in terms of consumer research. Said now smart car is a high price to enjoy, we estimate that millet will build a cheaper smart car, because millet as a whole is to do cost-effective, millet this car I do not understand, but also did not have contact with them, but I feel that the same with the consumer's expectations, will not go too high-end route, it should be a very good product, but the price is more reasonable, this is if it comes out of the blue ocean, at present, the car is high and low, but the price is reasonable. The car is high and low, the middle of this grade is not yet, everyone is also doing.

In addition, I think the electrification has paved the way for our smart car, this has done a very good contribution. Electric cars from last November to now, nine consecutive months monthly average of 197,600, the first half of this year, the first seven months has exceeded the whole of last year, so far doubled, now several new forces of the brand development are better, Tesla is now a month in about 28,000, the last two months have been affected. Azera also reached the level of 8000, ideal also reached 8000, recently Xiaopeng is also 8000, this data is just out, this is still the development of the chip has constraints. We say that there are two aspects of intelligent cars, one is autonomous driving, and the other is intelligent cockpit. Domestic smart car is mainly in the smart cabin is better, one is ecological, one is better human-machine interaction, which are consumers are more willing to accept, for the safety of the car driving without a particularly large impact. International organizations predict that by 2030 L3 and L4 level reached about 40 million vehicles, this is a little on the optimistic side, but this is a big trend.

Why do we say that electric vehicles pave the way for intelligence, and that it is difficult for traditional cars to achieve a high degree of intelligence. Autonomous driving, intelligent cockpit, server are brought to the impact of the next software-defined car, I estimate that the big trend, on the one hand, the value chain inside the software is getting bigger and bigger, on the other hand the decision-making point of view is not the same, they will be from the software plus the wipers, the traditional is from the hardware considerations. Industry chain cooperation in the future is also more difficult, there is also a culture shock, the traditional manufacturing industry is vertically controlled, high-tech companies is the Internet +, completely different. In addition, there is marketing, our traditional marketing is basically toB, now is directly toC, dealing directly with consumers, in general, the impact on our industry is still very big. I'm just describing the digital products, but actually operations is also an important consideration.

You can look at the APP of each manufacturer, and there is still a big difference between what the new forces are doing and what the traditional car companies are doing. Today from the consumer side to share with you, the composition of the consumer changes for the future development of automotive digitalization is a major impact. Thank you, everyone!

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