Disrupting the world automobile market, China-style

Customers check a BYD e6 electric car at a dealership in Beijing, China, December 9, 2015. Picture taken December 9, 2015. — Reuters picCustomers check a BYD e6 electric car at a dealership in Beijing, China, December 9, 2015. Picture taken December 9, 2015. — Reuters picKUALA LUMPUR, May 2 — China’s automotive policy favouring electric vehicles (EVs) and autonomous driving are likely to massively disrupt the world automotive market starting from 2018.

It’s not just a matter of technology and intellectual property, it’s the size and wealth of the market as well as government policies that will drive China’s automotive industry into a podium position in the race for an autonomous EV.

This was seen at the 14th Beijing International Automobile Exhibition that runs till May 4.

China’s car makers – most of whom have joint ventures with world car makers – displayed concept as well as commercially-available heavily electrified cars such as Plug-in Hybrid EVs (PHEVs) as well as fully electric vehicles to take advantage of privileges accorded to low carbon emission and EV’s by its mega cities.

On a national level, China will implement low emission laws to reduce urban pollution from cars by 2017.

China’s production and sale of electric cars will more than double this year from 300,000 last year, China Industry and Information Technology Minister Miao Wei, said last week, according to a Reuters’ report.

The disruptive change in the world automotive industry will be nurtured by the entrepreneurs from Information Technology and battery or energy storage technology. People such as Elon Musk of Tesla and Chinese entrepreneurs such as Jia Yueting of LeEco, a white goods and video streaming billionaire, are at the forefront.

Jia grabbed world headlines when he invested in Silicon Valley start-up electric supercar maker, Faraday Future, and bought a 400 hectare Nevada ranch as part of a US$1billion (RM3.9 billion) investment to build his future electric car. He launched Faraday’s concept FFZero1 at the Beijing Auto show.

“Tesla’s a great company and has taken the global car industry to the EV era,” Jia said in an interview at the Beijing headquarters of his Le Holdings Co, or LeEco.

“But we’re not just building a car. We consider the car a smart mobile device on four wheels, essentially no different to a cellphone or tablet. We hope to surpass Tesla and leapfrog the industry to a new age,” said Jia in an agency report.

Can Malaysia make the leap with China?

The disruptive change in the world automotive industry won’t likely come from Nissan-Renault or GM because these car makers have heavily invested in conventional car engine manufacturing technology.

How does the Malaysian automotive industry – its 670,000 total industry volume of production last year – feature in this scenario of disruptive change in the global car industry producing about 68 million passenger cars a year?

Besides China, Malaysia is about the only other country that has a national automotive policy specifically mentioning electric vehicles as a class of vehicles to benefit from government policy.

The aim of the National Automotive Policy is to make Malaysia a regional automotive hub via energy efficient vehicles including electric vehicles. There have been some successes.

Volvo has sent its top electrification and hybrid engineer Lennart Stegland, from Gothenburg in Sweden to take charge of the local assembly of the PHEV XC 90 SUV that will be rolled out of the Shah Alam factory and delivered to Malaysian customers anytime now, and then to the rest of ASEAN.

Mercedes-Benz assembles its premium S-Class in a hybrid version, the S400 hybrid, at DRB-Hicom’s factory in Pekan, Pahang.

BMW Malaysia has announced its intention to export its locally assembled and EEV certified 3-Series and 7-Series to Vietnam and the Philippines.

For mass market penetration with low-priced PHEV’s and EV’s, it is then more than possible that Malaysia might have to work its policy to attract a China car-maker that wants an ASEAN market for its energy efficient vehicles.

And this is where it gets exciting because remember, Malaysia has appointed a supervisory task force for Proton where the chairman and two of the private sector CEO’s are from IT and technology backgrounds.

One change that Proton’s management didn’t see coming was the market opening of China and the disruptive change of the China car market.

This time around, it’s the disruptive change that is being powered by IT companies such as Google, Apple, Alibaba, Baidu, TenCent and Xiaomi especially for autonomous cars.

At least one senior Ministry of International Trade and industry official familiar with Proton’s re-making is cognisant of China’s auto industry and its stride into electrification.

The US is dominant in autonomous driving technology but China could be where the autonomous vehicles will be on the road first because the Chinese government is ready to enact the laws that allow autonomous cars.

The US and Europe hopefully won’t spend too long arguing about whether an autonomous vehicle should have a steering wheel or not.

According to an AP report last week, National Highway Traffic Safety Agency spokesman Gordon Trowbridge said there were relatively few legal hurdles to the deployment of self-driving cars with human controls, but there were potentially “significant” hurdles to autonomous vehicles that have no steering wheels or brake pedals. Google says its self-driving car won’t have a steering wheel.

The 14th Beijing International Automobile Exhibition

There were 147 new-energy vehicles, including those from Tesla and BYD, shown at this year’s show which alternates location with Shanghai annually. Some of the notable ones include:

Government-owned car maker, FAW (First Automobile Works), showed its concept plug-in hybrid electric vehicle, a huge SUV named Red Flag H7.

Chery, one of the few independent car makers in China and one of the fastest growing, has Jaguar Land Rover as a joint-venture partner which might have given input to its PHEV, FV 2030.

BAIC (Beijing Automotive Industry Corporation), one of China’s oldest (started in 1953) and the maker of the Beijing Jeep (licensed by AMC, then owner of Jeep) celebrated its city’s hosting of the Auto China show and took the covers off two EVs.

The glamour concept car was its supercar EV, the Arcfox 7 boasting 603 electric hp, 0-60 mph in 3.0 seconds and a top speed of 186kph.

The more prosaic concept car was the EX200, the EV version of its popular SUV.

BYD showed its EV300, probably the most practical EV at the Beijing Auto show. It’s a longer range (300km) version of its earlier EV passenger car that is being trialed as a city taxi. — Bernama