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On December 12, 2019 new supply chain conference of gexi automobile was held in Jiading, Shanghai. The conference brought together industry experts to share the changes of supply chain trend and procurement form. Here is the speech of Zhang Xudong, partner of Deloitte China: Hello, everyone! I'm very happy to be able to discuss topics related to automobile supply chain with my colleagues today. Deloitte, as an international consulting company, has long paid attention to the development of China's automobile market, in which the whole automobile industry chain is our main focus. Based on the overall industrial chain market situation and future development trend of the automobile market, today we mainly share the relevant risks faced by the development of the automobile supply chain and how to effectively manage the risks. The content mainly includes four aspects: on the one hand, China's automobile market has experienced rapid development in the past decade, and is undergoing very rapid changes at present. Second, what is the overall transformation of China's automobile industry from the whole ecological industry to the upstream supply end of the industrial chain, the midstream host plant end and the downstream circulation end. Based on the third topic, what are the potential impacts of these changes on the supply chain? The last important topic is, based on the potential impact, what are the potential risks faced by suppliers? From the perspective of Deloitte, what are the countermeasures and suggestions? First of all, let's take a look at China's automobile market in fission. From Deloitte's long-term attention to the development of China's automobile market, China's automobile market has experienced a period of high-speed growth in the past, a period of slowdown of industrial growth since 2010, and the period of industrial transformation we are now facing. Looking into the future, although various consulting companies, including Deloitte, believe that there may still be oscillations in 2020, we are optimistic about the development of the automobile industry in the next decade. We believe that after 2021, China's automobile market is likely to enter a second growth period. In short, it is based on the secondary growth of the new four modernizations of automobiles, including the market demands for intelligence, sharing and other related demands. We believe that there will be good opportunities in the segmentation of China's automobile market in the future. These opportunities will promote China's automobile market to enter a secondary growth period after 2021. The growth drivers of this growth period are different from the previous high-speed growth period, but compared with the global automobile market, they are still optimistic. Based on the prediction of the development trend of the overall automobile market, from the perspective of policy orientation, economic basis, social motivation and technological trend, we can see that the driving force supporting the further development of Chinese automobile is also obvious or very clear, including the diversified, lightweight, networked, intelligent power represented by new energy Sharing, and so on. These five trends converge to promote the further growth of the automobile market. Continue to enlarge, what are the possible impacts of these five technology trends on the industrial chain? Let me share with you. From the perspective of industrial chain, from the upstream traditional supplier parts enterprises, to some new suppliers or manufacturers, to dealers, shared travelers and customers, etc., based on these five technical drivers, there are different influences. For example, from the perspective of power diversification, the transformation to new energy vehicle technology will face the challenges of product line adjustment and product change for traditional suppliers such as powertrain and chassis; for manufacturers, the impact of new products on product line will have great demands for new market layout, including technical route selection; for dealers, new energy products will have great demands on the original When there is a market impact, the profitability of auto dealers, including the profit model of the after-sales market, will be tested. Considering the return rate of new energy vehicles and the unit price of after-sales customers, how the overall after-sales output value supports the operation cost of the entire 4S store and how to develop a new profit model is a great challenge. For the shared travelers, it is also a great challenge to take the new energy vehicles as a representative Proprietary car models, its business model for new energy vehicles also needs to be changed. In addition to the impact of Internet connection, 5g has basically entered the commercial stage in the whole market of China, and there is a trend of policy driven mass influx, which will greatly promote the development of Internet of vehicles and automobile based on Internet connection. In this case, are traditional manufacturers, distributors and suppliers ready? How will our profit model change in the future from the past industrial chain connection, the past based on goods connection, Internet connection, to the next based on the Internet of vehicles connection? It's also a new topic. Based on various changes, from the perspective of industrial ecology itself, the mode of industrial ecological chain will change. At this stage, it is relatively simple and clear, basically a linear value chain. Our value is transferred from parts suppliers to host manufacturers, then to dealers, and finally to customers, forming a traditional linear value chain. Next, the automobile industry will change the industrial chain through two branches: first, in the sharing stage, in the transition stage of automobile sharing, we can see that the whole value chain has changed. At this time, it is very likely that the value chain will be directly transferred from the parts suppliers to the shared travel service providers. New cars will not only be brought to users from the traditional automobile manufacturers, but also directly from the parts manufacturers To many mobile travel service providers, and then directly transfer from shared value to customers; second, in the driverless transition stage, it is very likely that new suppliers of intelligent driving will directly transfer its value to manufacturers, and at the same time transfer it to customers, using another value chain delivery method. From Deloitte's point of view, there are three different scenarios for the end of the future automobile value chain: the first scenario is to return to the current situation of the existing traditional supply chain, from the new supplier to the manufacturer, and then to the customer; the second scenario is that the existing four players with different value chains are likely to disappear in the value chain; the third scenario is to directly transfer to the customer There are many direct retail businesses of manufacturers. If this kind of direct retail business mode is formed in the future, the value chain of manufacturers and distributors may disappear. Generally speaking, based on the industrial development, the future value chain may undergo subversive changes. Under such subversive changes, the traditional value chain may disappear. For suppliers, we need to think about which end of the value chain we are at in the future and what role we play in the future value chain. Specifically, what is the impact of manufacturer demand on the supply chain? First of all, in terms of production chain, there are two major trends that have a positive impact on the demand of upstream or supply chain: first, for all joint ventures, there is a trend to open the share ratio of joint ventures, which is bound to make many joint ventures further increase their production capacity in China, which is expected to drive the upgrading of upstream industries such as parts; second, the development of industry 4.0 and intelligent chemical plants Exhibition, to promote manufacturers to increase investment in the production side, which can have a very positive impact on the entire upstream market. Looking at the terminal, based on the new four modernizations, the terminal product may have some change points, the manufacturer or upstream demand is still there, but the demand will have new changes, such as the change of new energy power assembly, or the addition of some completely new demand, such as intelligent equipment. So what is the impact of the sales side on the supply chain? For example, the traditional internal combustion passenger vehicles will be affected, and the sales volume of fuel vehicles will fall in the foreseeable years, which will have a negative impact on the demand of the entire industrial chain. In addition, we find that the demand of the host factory is increasing gradually from the traditional manufacturer to the data service provider and the travel service provider, which plays a positive role in its own change point. In a word, our core point of view is that, based on the changes in the development of the front-end, middle-end and back-end of the manufacturer, we have three challenges for the supplier or supply chain: first, the energy revolution represented by new energy and energy conservation and emission reduction; second, the demand for intelligent interconnection represented by car alliance and intelligence, the hardware manufacturing of the supply chain in the past On the basis of this, we should also consider how to realize the connection of overall intelligence, how to integrate with intelligent devices and the Internet of vehicles; thirdly, in the aspect of intelligent manufacturing, we should meet the challenges of how to make the product line or realize highly flexible production, how to reduce production costs and so on. Under the three driving forces of energy revolution, intelligent networking and intelligent manufacturing, we have summed up the specific impact on the seven major parts and components as a whole, and what is the possible trend in the future. Here's a brief analysis. The trend can be divided into three categories: the green plus represents a good growth opportunity for the category, the red minus represents a downward pressure, and the gray horizontal line represents the opportunity or driving force that the category supply chain enterprises need to grasp, which may become a driving force for the rise or a downward pressure. As can be seen from the above figure, at present, due to various factors such as the diversification of automobile power, traditional energy assembly is under pressure, but it has little impact on new energy assembly. At the same time, the driving force for growth is relatively strong. From this point of view, the following categories of appearance, interior decoration and intelligent equipment are the overall rising trend. On the other hand, from the perspective of its own influencing factors, we can see that intelligence and interconnection will have a positive impact on the whole industry. It is up to us to think about how to meet the challenges of dynamic diversification, lightweight and sharing, which may eventually form a growth opportunity or potential downward pressure, which depends on how we face it. The above is our analysis of the current fission situation of the whole automobile industry chain. Next, we will see the impact on the value chain of the automobile industry or the whole ecology. According to our summary, there are four scenarios from the perspective of automobile enterprises. For any automobile enterprise in the future automobile industry, the overall situation depends on two dimensions. The first dimension is the vertical dimension, i.e. the degree of emerging technology application, and the second is the horizontal dimension, i.e. the degree of the automobile manufacturer's own dominance in the industry or other aspects Through these two dimensions, we roughly divide the form of future development of automobile enterprises into four modes in the figure. If the car companies can embrace the emerging enterprises with technology and actively explore the future business model, such car companies are likely to become the role of data and travel management, that is, from the traditional manufacturing enterprises to the car companies with data and service value. For example, he hopes to become a software enterprise and also release its strategy. He hopes to become a travel enterprise in the future, which is the value orientation of relevant car enterprises and traditional car enterprises when they think about the future. In the other three dimensions, some car companies may adopt a positive attitude towards technological change, but they will take a more cautious attitude towards business model change. Such car companies will become hardware platform providers, and their products meet the needs of the whole industry. However, from the perspective of business model development, depending on the original business model, they may become players of other industry chains hardware platform