Insight into China with François Tardif, EVP Faurecia China, and Tony Ma, China Technology Strategy Vice President
How has the Chinese automotive market been performing recently?
François Tardif: We’ve seen positive developments recently in the automotive market in China. If you look at the past three months of retail sales, we are between 6-8% higher compared to last year – so we see not just a recovery but an improvement. Nevertheless, there are still a lot of uncertainties: we know that unemployment increased significantly back in February and March, and that this has had an impact on the average household income. We do not see the consequences of this today, neither in consumer spending nor in the automotive sector, but we expect that at one point in time we will. I think Q4, or even the first quarter of 2021, will be strong indicators for the state of the automotive market.
Has the Covid-19 crisis impacted the automotive megatrends?
FT: My belief is that the covid-19 pandemic is an accelerator for everything we had seen before. This includes the electrification of vehicles, which is advancing more quickly today, and connectivity as well, especially here in China where there is a lot of focus on 5G communication.
Another thing that we had not seen before but that we are seeing in a number of different sectors is an emphasis on health. It’s clear that health is capturing attention. I think that people have become more conscious about health and wellness, and are looking for sanitizing features that allow occupants to have a healthy ride in a safe environment. At the peak of the crisis there were already such options available, but were basic mechanical solutions adopted by taxis or shared vehicles. Now we see a more sophisticated range of products.
What are Chinese consumers’ priorities today, and have you noticed any recent evolutions?
Tony Ma: Concerning Chinese consumer preferences, it’s clear that there are a lot of local needs and cultural norms to take into account when developing solutions for this market, and that certain consumer priorities and requirements are unique to it.
As you may know the Chinese automotive market is the largest in the world, but only 21% of the population has a driving license. As a result of this, ridesharing is very popular: people expect a different mobility experience and are much more focused on spending a safe, efficient and comfortable time on board.
Another example: amongst the segment of the population that do have licenses and own vehicles, families with children typically have one parent who sits in the back seat with the child (unlike in Europe and North America, where the parents tend to sit in the front). Because of this, consumers look for rear-seat infotainment in their cars.
High-speed Internet access is widespread and is integral to professional as well as consumer spending habits. People expect seamless digital continuity between their different environments - if there are no connected services integrated in the vehicle, consumers won’t be interested.
In light of the momentum for zero-emissions mobility around the world, how is the Chinese government accelerating sustainability?
FT: Globally and in China there has been a refocus on emissions control and environmental concern following this crisis. On Tuesday, September 22 at the United Nations, President Xi Jinping made a commitment for the first time regarding greenhouse gas emissions and carbon neutrality, saying the peak of emissions would be reached in 2030 and that China was aiming for carbon neutrality by 2060.
As part of this move towards zero emissions, we are also very happy about new commitments from the Chinese government regarding fuel cells. These include not just consumer subsidies for the purchase of new hydrogen-powered vehicles, but also significant incentives for companies in the fuel cell supply chain. Hydrogen will play a major role in the energy transition and China wants to lead this change. China’s commitments echo our own path towards CO2 neutrality by 2030 as well as our ambition to become a world leader in hydrogen mobility.
In this fast-moving environment, what are Faurecia’s strengths in China?
TM: With solutions for all powertrain types and as a world leader in aftertreatment technologies for ICEs, our sustainable mobility strategy is rapidly gaining ground. Our expertise in hydrogen mobility also puts us in a good position as the Chinese government promotes the expansion of fuel cell systems for commercial vehicles in particular.
Faurecia is also well-known among OEMs for the Cockpit of the Future, and our customers believe in our holistic approach to the cockpit as a complete system.
To accelerate innovation in line with the needs of the market, we’ve created several joint ventures with Chinese OEMs, such as with BAIC, BYD, Wuling Industries and the Xuyang Group, covering our Interiors, Seating, Clarion Electronics and Clean Mobility activities.
Today, more than 17,000 employees at 60 industrial and R&D sites across the country drive our strategy for the Cockpit of the Future and Sustainable Mobility in China.
In conclusion, given that the Beijing Auto Show is currently taking place, which of the vehicles showcased are equipped with Faurecia technologies?
TM: I can give you two examples of major vehicles equipped with Faurecia technologies and revealed this week. FAW launched their new Hongqi H9 vehicle at the auto show this week. The luxury car is equipped with products made by Faurecia’s Interiors and Clean Mobility business groups, as well as Faurecia Clarion Electronics’ high-end electronic solutions for the cockpit domain controller. We have also equipped new GAC vehicles with our display technologies.