Chongqing - "China's automotive industry stands at a pivotal juncture, navigating the transition from the 1.0 version to the promising 2.0 version," said Gong Yan, Professor of Entrepreneurial Management Practice and Programme Director of Entrepreneurial Leadership Camp at CEIBS during the 8th Innovation Forum recently. This event attracted nearly 400 guests and representatives from the business community.

Gong Yan, Professor of Entrepreneurial Management Practice and Programme Director of Entrepreneurial Leadership Camp at CEIBS. (Photo/cqnews.net)

Professor Gong emphasized the need for Chinese export-oriented enterprises to boldly venture into uncharted territories. "Today's competition goes beyond simply producing superior vehicles," he said. "It's about forging novel organizational logics and management approaches."

Professor Gong introduced the concept of the cognitive tunnel effect, wherein well-established companies' thinking is often constrained by their past experiences and backgrounds. 

He thinks that in today's automotive landscape, which is no longer a blue ocean, unknowing market space, disruptive innovation is more likely to be driven by non-professional newcomers rather than traditional expert CEOs.

"Build, Buy, and Borrow" solutions to set new industry standards

Professor Gong pointed out that competition among automakers predominantly centered on supply chain efficiency in the era of conventional internal combustion engine vehicles. However, with the advent of intelligent, connected new energy vehicles, the critical battle revolves around the ability to set industry standards.

As an illustration of this shifting landscape, Professor Gong highlighted the collaboration between Changan Automobile, Huawei, and CATL (Contemporary Amperex Technology Co. Ltd.). 

He emphasized that such collaborative models represent a beacon of hope for Chongqing's automotive sector. Under the brand name Avatr, this partnership amalgamates Changan Automobile's wealth of manufacturing experience, CATL's battery technology prowess, and Huawei's cutting-edge intelligent technology.

With Huawei's support, Avatr's in-car systems provide users with a more intelligent and convenient multi-scenario experience, boasting customization that includes over 367 feature enhancements and 11 unique functions, such as "three-finger swipe."

Press conference of Avatr at 2022 Chongqing International Auto Exhibition. (Photo/Avatr)

"In the process of establishing standards and ecosystems, it is often challenging for a single entity to address all the issues." Professor Gong continued. "Therefore, the three 'B's—Build, Buy, and Borrow—offer a strategic solution, with cooperation being the optimal choice." 

Professor Gong added that the trend of collaboration is also evident in the electric vehicle (EV) market. For example, he cited the luxury car brand Aston Martin, which no longer develops its "three-electric" technologies internally, referring to power batteries, drive motors, and electronic control systems.

Instead, they outsourced this expertise to a Silicon Valley startup called LUCID. In return, Aston Martin provides orders, cash, and a 3.7% stake in the company to LUCID. This strategic move stems from LUCID's competitive edge in the "three-electric" field and its backing by the Saudi sovereign wealth fund PIF (Public Investment Fund), exemplifying the trend of collaboration in shaping the future of technological innovation.

Wang Hong, President and Professor of Management at CEIBS, highlighted Chongqing's central role as a key hub radiating throughout southwestern China. With its impressive economic growth momentum, Chongqing secured the fourth position in terms of gross domestic product among major cities in the Chinese mainland in 2022. 

Furthermore, intelligent connected new energy vehicles have been identified as one of Chongqing's trillion-yuan industry clusters, poised to drive the digital transformation of the city's automotive sector through technologies like generative AI.