Qi Kai: brilliance Automobile layout during the 14th five-year Plan the third factory of brilliance BMW will have a production capacity of more than 800000 next year.

Qi Kai, vice president of brilliance Automobile Group Holdings Co., Ltd., delivered a keynote speech at the sub-forum of "Development Strategy and Prospect of China's mainstream Automobile groups during the 14th five-year Plan period" of the 2020 China Automobile Forum. The following is a transcript of the speech:

Qi Kai: Hello, everyone. I'm Qi Kai from brilliance Group. The title of my speech, "brilliance Group's 14th five-year Plan Strategic Direction", is called strategic direction because we cannot come up with a plan. Like FAW, we are now in the process of formulating it, so we exchanged directions and goals at the meeting.

I am divided into three parts: a brief introduction, business situation, and the strategic direction of the 14th five-year Plan.

Brilliance Group holding Co., Ltd. was established in July 2002. we have 160 wholly-owned and traditional enterprises with 47000 employees. Our main business includes automobile manufacturing and automobile service industry, involving power total energy, R & D and manufacturing of core components, powertrain, sales and after-sales service business, finance and other industries. Our vision is to become a "well-known global enterprise group with clear positioning, outstanding main business, good quality and strong competitiveness". With a registered capital of 800 million yuan and total assets of 190 billion yuan, the company has built two major bases in China, and has complete vehicle parts industry in Shenyang, Dalian, Shanghai, Chongqing, Mianyang, Jiangsu and other places; there are factories in Iran, Egypt, Russia, Myanmar and other countries. We have four listed companies, two listed on the Shanghai Stock Exchange and two listed on the Hong Kong Stock Exchange in China.

Brilliance Group is an institution invested by state-owned capital in Liaoning Province, which is the requirement of SASAC. We have built a three-tier management system according to the concept. How small is it? The whole group has only 11 departments, only about 100 people, that is, 47000 people, most of them are in second-and third-tier enterprises. The group headquarters is the first level, as a capital layer, it is responsible for the group's development planning, major investment and financing, capital operation and direction control, and is the decision-making center and control center. We have nine 2B companies responsible for the implementation of five major business directions, which are commercial vehicles, passenger vehicles, spare parts, new energy, travel and services.

The second-level enterprise is the unified management of brand construction, product research and development, resource standard allocation, is responsible for the competition goal, is the operation and profit center, is the activity of the production and management layer, which is a major change made by brilliance Group recently. According to the original management relationship, brilliance Group has nine layers of management relationship, which is more complex. Therefore, we are divided into three levels according to the right of management, and the business adjustment has been carried out according to the relationship between property rights and equity, but the adjustment is long. Business adjustment is to lay the foundation for technical objectives.

In 2019, the sales volume of the whole group is 801000 vehicles, the operating income is 181.3 billion, and the profits and taxes are 45.311 billion yuan. The data in 2019 are the basis for the "14th five-year Plan" in the future, but in 2020, affected by the epidemic, only a forecast has been made for total sales of 872000 vehicles. Operating income and profits are flat or slightly increased.

The development concept of the "14th five-year Plan" is reform and innovation, opening up and cooperation, focusing on the main industry, focusing on the main industry, focusing on the high-quality resources into the main business, taking the market as the guide, clearly leading products, and developing and strengthening the main industry. Diversification strategy does not necessarily have a large scale, focus strategy is not necessarily small scale, there is no distinction between right and wrong, they are the distinction between different enterprises in different periods. Brilliance Group has chosen the focus strategy.

Where does it focus? Focus on the vehicle and parts. The whole vehicle business is planned for the end of 2025, and the production and sales of the whole group are expected to be about 1.95 million vehicles, including 1.4 million passenger vehicles and 550000 commercial vehicles, 1 million brilliance BMW, 100000 brilliance Xinri, and about 100000 other vehicles.

Brilliance BMW is expanding its third plant, with a production capacity of 550000 vehicles this year and more than 800000 next year, with cars and SUV in the future. Eight models are produced in Shenyang, which has become the world's largest production base for BMW, which now accounts for 22% of BMW's global production. It will reach 25% of BMW's global production in the future, and is expected to produce 1 million vehicles in 2025.

Brilliance China is building three platforms, among which the goal of our small car is to pursue sales and expand market share; the large car platform promotes the brand upward and achieves higher profits; and the new energy brand adopts the global concept to achieve brand differentiation and change the new pattern of the future. In the future, a total of 14 new cars will be launched on the three platforms, and all domestic and foreign markets will be in full force. It is estimated that 300000 new cars will be produced and sold annually by 2025.

Brilliance Xinri, our joint venture, is expected to put into production the first new energy vehicle by the end of this year. There are three platforms and five products are being built. It is a conservative estimate that 120000 vehicles will be produced and sold annually in the future. We will speed up the brand evolution, at the same time speed up the brand product development progress, experience the results of dual-brand management, our joint venture company is the first dual-brand operation, is expected to achieve annual production and sales of 150000 vehicles by 2025.

Brilliance Xinyuan Company, the production and sales scale is constantly expanding, to achieve annual production and sales of 300000 vehicles by 2025, which is a conservative estimate.

In short, the production and sales of 1.95 million vehicles are expected to be adjusted in each company, but some companies will reduce and some companies will increase production, but this goal is the main data we report to the province.

Take a look at the spare parts business. The overall goal is to achieve 35 billion yuan in revenue by 2025. There are 18 existing spare parts companies, which are distributed in two companies. Brilliance BMW currently has only about 40%, and the localization strategy brings opportunities for parts and components. It will rise to more than 35 billion in 2025, 70 per cent of which will come from brilliance BMW. Brilliance will promote cooperation with BMW suppliers and establish a large number of enterprise clusters in Liaoning. This work has been valued and supported, which can improve efficiency for BMW and improve the technical level for brilliance. For the government, raising taxes will achieve a win-win situation. In the strategic cooperation on the localization of spare parts, we have reached an agreement with the senior management of BMW Group and the provincial party committee and provincial government, and are stepping up efforts to promote it.

Other specific businesses, including smart driving, energy-saving new energy, lightweight and other specific businesses, are reflected in the sub-strategy. In the future, we will focus on the technical route of the automobile, and carry out all kinds of work in the aspects of electrification, intelligence, networking, sharing and so on.

Brilliance Group does not have a complex strategy, has a great possibility of landing, and will certainly be an important part of China's automobile industry during the 14th five-year Plan period. The important support for the implementation of the strategy is the institutional mechanism and the team. Brilliance will improve the endogenous driving force and combat effectiveness through the reform of the institutional mechanism in the future. We believe that action is the foundation, and only when the foundation is solid can we develop well.

Here, on behalf of brilliance Group, I sincerely invite all friends to visit, guide and cooperate. I have been engaged in R & D for 20 years, and I need your guidance and help.

Finally, I would like to thank the China Automobile Manufacturers Association again for its contribution and efforts.

Thank you.

(note: this article is based on on-site shorthand and has not been reviewed by the speaker)

"2020 (second) China Automotive New Materials Application Summit Forum"

It was solemnly held in Shanghai from September 17 to 18.

During the reform period of the "four modernizations of the automobile", intelligent network connection, new energy, lightweight and intelligent manufacturing entered the field of the automobile industry, and the automobile era was reinterpreted. The surging changes require the industry to continue to integrate and innovate, and quickly promote the development rate of automobile enterprises. With the emergence of self-driving and intelligent cars, Internet companies, which are not active in the automotive field, have more opportunities to show their talents; the double points policy is becoming an important driving force for the development of China's new energy vehicle industry; in the face of environmental constraints, car companies speed up the application of advanced lightweight components and technologies to achieve vehicle weight loss. With the continuous promotion of the strategies of "Industrial 4.0" and "made in China 2025", intelligent manufacturing has become a new challenge of upgrading and transformation.

Under the guidance of the Shanghai Economic and Informatization Commission and the Shanghai Federation of Industrial economy, in order to accelerate the application of automobile lightweight and product lines, the Shanghai Nonferrous Metals Industry Association, together with Shanghai Automotive Engineering Society, Suzhou Die casting Technology Association and Shanghai Nonferrous Network, jointly held the "2020 (second) China Automotive New Materials Application Summit Forum". Jointly discuss material solutions, co-casting automobile industry chain green development closed loop, and strive to build an excellent communication and cooperation platform for the whole automobile industry chain, and lead the creation of advanced automobile industry clusters.

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