How far can a big shuffle go to the OEM model?

The shuffling period fell to a new level and the new forces may be even more unsettling. In the end, the “Development and Reform Regulations of the Automobile Industry (Draft for Soliciting Opinions)” promulgated by the Development and Reform Commission to the relevant authorities has for the first time made more preparations for the entry of new manufacturing companies. Clear rules of the game (for more details, please refer to the "Regulations on the Investment Management of the Automotive Industry will soon introduce a threshold for investment in pure electric vehicles"). In 2018, many new vehicle-building forces have gradually pushed the products to the market. However, in the face of or will come ahead of the tide of reshuffling, the new forces that the constructors are facing are still the mass production problems of the models.

OEM model VS self-built factory

There has been controversy over the issue of whether new vehicle builders choose to build or build factories.

As one of the newest vehicle manufacturers that the industry regards as “the most reliable”, Weilai’s car has chosen the “manufacturing model” that is considered to be ineffective to solve the mass production and sales of vehicles. Until now, Weilai has been The delay in the delivery period after the automobile was listed was also blamed on the OEM model, and Jianghuai Automobile was more often interpreted as a “factory”, and thus put on a layer of tragic colors.

In addition to the "model of foundry", the "self-built factory" model is widely favored. Among the new vehicle builders, the Weimar Automobile model is typical. Since its birth, the founder of Weimar Automobile has insisted on self-construction. After 16 months of construction, the Weimar Automobile Production Line arrived at the end of March 2018, and at the same time ushered in the trial assembly line.

For the selection of OEM mode, some of the new vehicle builders have their own considerations.

Whether it is the industrial policy or the counterattack of the traditional car companies, the window of time reserved for new forces is not long, especially the recent state’s sustained liberalization of the automobile industry, or the early arrival of the era of the reshuffle of the new energy automobile market. The foundry model can not only solve the problem of production qualification, but also reduce the huge investment in the early factory construction to quickly occupy the market. Nowadays, many new vehicle-building forces are taking the asset-light route. As the traditional car companies involved in the entire industry chain, such as platform, technology, management, production, and marketing, it is a typical heavy asset model, especially self-built production. Bases, including land, plant, and equipment all require large amounts of capital to be invested in time. The emergence of the OEM model will enable such startup companies as Weilai Automobile to have no production qualifications, but have positive R&D capabilities to survive. At the same time, they can also solve problems such as overcapacity and lack of experience. The most important thing is to reduce the number of OEMs. Initial investment, so the "OEM model" has become a key part of the car market, such as Weilai car, Xiaopeng car, and electric coffee car.

Today, Weilai Motors' OEM ES8 has been on the market and has delivered a small amount of orders; Xiaopeng’s G3, which is manufactured by Haima Motors, has also started pre-sales. Its founder, He Xiaopeng, said, “At the beginning of May, we entered. "The new stage of large-scale quality delivery"; and the electric coffee car that was manufactured by the Southeast Automotive Co., Ltd., has already completed thousands of sales of its electric coffee EV10 after mass production.

For the new forces that insisted on self-built factories from the very beginning, the foundry could not ease the anxiety brought about in the production and manufacturing of products, but on the contrary it would bring more problems.

Wei Ma Founder Shen Hui

Shen Hui, the founder of Weimar Automobile, said: “Which of the best domestic automakers will help you with OEM? If you choose OEM production, I will sleep every day.” On the one hand, the quality of OEM is not enough Assurance, on the other hand, will also affect the efficiency of production, so he believes that start-ups must grasp the product in their hands. Zero-run car founder Zhu Jiangming also said that "for the OEM model car is still very difficult to achieve, and now the new car forces are mainly temporarily no qualifications forced by helpless choice of OEM mode, the car is a complex mechatronic products , Product design and manufacturing processes are closely related, it is difficult to separate, not suitable for OEM."

Nowadays, the new vehicle-running forces headed by Weimar Automobile, which has built its own factories, are also welcoming the completion of the factories. For example, stamping, welding and other workshops of the Aiqi Auto Shangrao Base have all been capped in the first quarter of this year. Equipment entering and debugging is preparing for the production of 2019 products.

"OEM" may not be a derogatory term

Since the first cooperation between Weilai Auto and JAC in 2016, the term “manufacturer” has been “ridden by criticism”, especially from the information on social networks, the automotive-engineered group is holding on to OEMs of JAC. There are great concerns. One is whether the model of OEM is feasible, and the second is whether Jianghuai Automobile, which focuses on mid-to-low-end vehicles as the main product, has the ability to build a high-end product. According to most industry experts and industry media, the OEM model is only a compromise for the reality of no-manufacturing qualifications by new vehicle builders. Compared with companies that have built their own factories, they are looking for new forces for OEMs. Ultimately, it will be eliminated because of quality control, sales, exchange of electricity, low market acceptance, and lack of competitiveness.

From many articles about Jianghuai OEM's Weilai, we can feel the contempt for the OEM model, not so much the contempt for “OEM” as it is to question the manufacturing capabilities of Jianghuai, Haima, and Southeast automakers. In view of some media, the Jianghuai and Haima markets have experienced sluggish performance, and they have excess production capacity. “The level of manufacturing is naturally predictable.” Thus, the self-built factory is defined as “the correct model,” and the foundry model is to quench the thirst.

The Media's Evaluation of Jianghuai OEM's Weilai

In the stereotype of consumers, domestic cars have been synonymous with low quality and low cost for many years. However, with the continuous breakthrough in technology and quality of domestic cars in recent years, the market structure is changing. Wei Li’s founder, Li Bin, has always had a headache. In his opinion, the reason why many people hold onto JAC OEM is because of the inherent stereotypes of domestic cars. He even feels helpless. "I don't know why everyone has so many negative things about JAC. There is no way. It can only produce such a car. It can sell it, so it has to produce such a car."

In fact, it is not difficult to understand why JAC OEM has been criticized. Although JAC is one of the earliest car companies in China engaged in the research and development of pure electric vehicles, it has a deep design and research and development capability in vehicle motors and electronic control systems. Various experimental systems and extensive experience and excellent capabilities in basic manufacturing and production, but due to strategic reasons, JAC is currently in a bottleneck period of development, and the delivery of Weilai Auto in early May has not been realized yet. ES8's delivery work Being delayed for the second time has added to the questioning of the OEM capacity of JAC.

Even if the foundry model is not widely viewed, the founder of the singularity car Shen Haikai still expressed his unmistakable affirmation of the foundry model. Shen Haijun pointed out: “China’s current production capacity is surplus, and the existing production capacity is used to make cars. Industry or individual companies have the complementary advantages; the existence of OEM model brings a new structure to the industry, so that each company can focus on their own areas of expertise, such as some companies are good at manufacturing, and some companies are good at Doing user and branding.” Regarding the questioning of the product design and manufacturing process involved in the foundry, Shen Haiyun said with certainty: “It is not feasible to judge the model of the OEM model today. I think it is feasible and of course it is feasible. The process is not perfect, and there will certainly be a transitional process. The OEM model itself does not happen overnight. Even if Foxconn does not start high-end manufacturing from the beginning, there must be a process of growth.”

Founder and CEO of Singularity Auto

It is based on the recognition of the OEM model and is committed to the strategic cooperation between Beiqi New Energy and Singularity Car in the automotive industry. It is understood that in the future, SVD will cooperate with BAIC New Energy in many aspects, in addition to fully Using the latter's manufacturing resources, it will also make full use of its after-sale network. As a leader in the field of new energy vehicles, BAIC New Energy announced that it will implement a comprehensive “open and share” strategy in technology, R&D, manufacturing, capital, supply chain, and aftermarket in 2018-2025. A strategy that eventually attracted Shen Haijun and Beijing Auto New Energy "marriage." Li Yixiu, general manager of Beiqi New Energy Marketing Co., told Gasgoo correspondent: “We are open-minded and embrace such cooperation. This kind of open sharing involves simple production and processing, or the whole industry chain includes all aspects of technology research and development. The entire industry will play an inspiring and exemplary role."

The Gasgoo Automotive Research Institute believes that from the point of view of industrial development, if you look at the OEM model with faded colored glasses, the OEM and self-built factories are actually different in the business model of the company. There is no difference between the merits and demerits, and whether a company has a promising future. There may not be a causal relationship between this company's detouring route or a self-built factory. This is the result of the division of labor in society. This situation may exist for a long time.

The future of the automotive industry or there will be no brand foundry

In fact, apart from Foxconn's founding apples, the OEM model for the automotive industry has long existed and there is a mature model. The factory is the Magnustel factory that is known as the Foxconn factory in the automobile manufacturing industry. The Magnustel factory is dedicated to OEM work. The OEM models include the Mercedes-Benz G-Class, MINI COUNTRYMAN (R60), BMW 5 Series (G01), Jaguar E-PACE, Jaguar I-PACE and many other brands. Heavy models, in addition, China's new emerging energy brand ICON Nike's first product, the ICON Nike seven series, is responsible for the production of prototype cars by Magna Steyr. In the eyes of many people in China, OEMs are not as good as their own brands, and Magna Steyr proves that OEMs have their own survival rules and are not as simple as most people think.

(Source: Pacific Car Network)

Of course, the formation of a mature foundry requires a long period of time, but Gasgoo Research believes that as the social division of labor becomes more clear and enters the automobile era 3.0, smart technology research and development and travel services will become more core competitive advantages. With the changes in the industry, the current car manufacturers will likely evolve into three types: travel platform service providers, future car manufacturers and automotive industry and commerce. The automotive industry and commerce will focus on the improvement of manufacturing capabilities and gain profits through large-scale production.

Wang Xiaoming, director of the Research Department of the Industrial Economics Research Department of the Development Research Center of the State Council, said that as the vehicle production exceeds the saturation point of the market, the phenomenon of cross-substituting between different brand enterprises in the field of household appliances will also appear in the automotive industry. The future will not rule out the emergence of independent Brand OEM companies (Foxconn model). Director Wang pointed out that the OEM model has already had a mature model in the electronics and home appliance industries. From the perspective of economy, efficiency and social value, the OEM model of the automobile industry can be compared and used for reference in some industries. The future automobile production capacity is in surplus. There will be a car company that specializes in manufacturing. Such companies have flexible production lines that can meet the production of multiple brands and multiple models. Therefore, from the perspective of industrial development, the foundry model is conducive to the full use of resources and the complementary advantages of the industry, the automotive industry is worth learning from.

Wang Xiaoming, Director of Research Office, Industrial Economic Research Department, Development Research Center of the State Council

As Director Wang Xiaoming stated, the model of OEM in the automotive industry may not be so prejudicial from the perspective of economy, efficiency and social value. Whether a company can finally laugh does not depend on OEMs or self-built factories, but depends on Is it possible to establish absolute competitiveness in its own field?