Li Shufu (Li), Chairman of Zhejiang Geely Holding Group, received an interview with Chengdu Business Daily (CBD) on February 18 before delivering a speech themed "car life in the future" on the development of the industry. He does not only think about his own business, but is also concerned with the development of China's auto industry.
On trend of the industry: cars and Internet will be interconnected
CBD: You have said in January that the future cars of China are likely to be intelligent and highly integrated with Internet. So how do you think about the relationship between Internet and cars?
Li: The combination of Internet and cars is that of industrialization and informatization. Cars are industrial products while Internet is that of informatization. China has already established the Ministry of Industry and Information Technology, which clearly charts out the future trends of auto industry in the world. Our mission now is to highly integrate the traditional automotive technology with Internet, to make driving more convenient, to make cars that are friendly to both environment and health, and to satisfy people's soaring needs while making progress.
CBD: Could you brief us on the current situation of the self-driving technology applied in Volvo?
Li: The final goal of self-driving will be achieved steps by steps, including the initial stage, intermediate self-driving stage, highly-automated stage and completely-automated stage. Generally, most cars have achieved the initial stage, and some the intermediate stage. Volvo has now realized highly-automated; the completely-automated phase is expected to be fulfilled around 2020. A highly self-driving car may need little human input, while a completely autonomous car needs absolutely no human interference. The new highly-automated Volvo model that will be launched in October can run with or without drivers' control.
CBD: Do you think that informatization play a role in the promotion of the development of automotive technology?
Li: Of course, informatization can promote the development of automotive technology. The car is a mobile terminal. If Internet can be integrated with cars, then the technology, information, data and other functions of Internet will also be connected, making cars more flexible and more intelligent.
On electrification of cars: we can not say Tesla is successful now
CBD: Tesla also represents a developing trend of cars and is now available in China. How do you evaluate its model？
Li: First of all, it's too absolute to say that Tesla represents the trend of auto industry. I have questioned the success of Tesla——Does it gain profits? How its success can be proved? Consequently, I was criticized for this. In my opinion, it's risky for an entrepreneur not to care about the returns of his enterprise. Of course, we need to pay attention to the phenomenon behind Tesla, and be open to emerging things. We cannot say that the time of electric vehicles has arrived or will arrive tomorrow, while it is a developing trend. Although all the automobile enterprises in the world including Geely agree with the trend, the views on the time to realize the goal vary among the enterprises. I love innovation and innovative companies; and Tesla sets a great example which is worth respecting. The key now lies in the battery technology. At present, the life span of electric vehicles is still shorter than that should be reached, especially for wide application. Meanwhile, the manufacturing cost, application cost, durability and reliability all need to be taken into account. Only when all these factors meet consumers' expectations can we say that Tesla is successful. So I have to use a sentence to answer this question——Practice is the sole criterion for testing truth.
Suggestions on industrial policy: easing of limits on equity ratio in a joint venture facilitates competency
CBD: Many experts believe that to relax the restrictions on equity ratio of joint ventures is a trend. What's your opinion?
Li: China's industrial policies have made significant contributions to the development of China's auto industry, and now it's time to discuss this issue. As far as I'm concerned, we should relax the restrictions so that everyone can participate in the competition freely. If our policies still focus on the protection of local auto industry, it will do harm to the improvement of the innovation ability and competitiveness of companies. Enterprises under such circumstances are just like flowers in the greenhouse or children spoiled by their parents; they do not have to face the reality——either move forward or be left behind.
The US has s Tesla, why China does not? Tesla will not be allowed to research, design, produce or sell cars according to China's policies since it doesn't have production qualification. In China, only those companies that have already produced cars are qualified for designing and launching new models. Therefore, competition and innovation are only within such several companies. From the perspective of the development of home-grown brands and China's auto industry, I personally think we should relax the restrictions on equity ratio as soon as possible to let the competent companies survive. Then the resources can be invested to the competitive companies and the weak ones will be weeded out by market. Through the fierce competition, competent companies will be further improved and provide better service for consumers.
CBD: In recent years, the competitiveness of self-owned brands has improved a lot. Has the developing upsurge of China's auto industry passed? Will the self-owned brands face greater market impact in the future? Will it influence the developing scheme of Geely?
Li: Your words are reasonable, but it's impossible for enterprises not to participate in the competition and only rely on market demand. Many fields in China have already turned into buyer's market and it's no longer possible for a product to be sold once produced. If an enterprise wants to survive, it has to participate in the competition, and to improve overall ability including service, to develop new products as well as control costs.