Western carmakers can not ignore the threat of a new “Made in China.”

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When a two-year-old Chinese startup introduced a high-end, AI-powered all-electric SUV at last week’s CES – the Bytesla X-type, 40% cheaper Byton, Electric cars fight in the race. The company also said that China’s manufacturing industry has entered a new phase.

Just as China has become a global player in the world of personal computers, solar panels and integrated circuits, China has become one of the largest producers in the world and we expect China to become a major supplier to emerging industries such as aerospace and smart cars. Robotics in the near future. So far, Chinese have been stuck in these areas, largely because of concerns about quality and safety. But in fact, the fact that future mobile companies can tap into Byton for some of the technology and electric cars of companies such as BMW, Google and even Tesla shows how quickly landscape changes and how western companies are burdened Can not afford to be complacent.

Byton owns the national “Made in China 2025” program. This 10-year project is dedicated to helping China take over the top manufacturers in the United States, Europe and Japan in the industrial arena, which were once considered technically complex for mass production at low cost such as robots; biopharmaceuticals and advanced Medical equipment; aerospace; power generation; and railways.

China’s momentum

China has already expressed its ambition to turn China into a leading manufacturing powerhouse. So far, there has been a lack of attention and even curiosity among the industrial enterprises in Europe and the United States. To be sure, China’s electric car has been unveiled, and did not exceed China’s largest market for electric vehicles in the world. Worse, some people eventually went bankrupt. Nonetheless, Byton, which produces about 300,000 people, is said to have global ambitions, demonstrating China’s ability and determination to accomplish that goal, possibly in some areas up to 2025.

This means that Western manufacturers should provide strategic readiness to stakeholders, including increased investment in research and development, reflecting the possible existence of a new, lower cost competitor in their area of ??research. And the preparations are on now, not after China has introduced products beyond the West. If it were to wait, a reminder of Japan’s assault on the US auto industry in the 1970s was that Detroit chose to ignore the success of small cars and continue to produce gas-hungry giants.

When the company has national and provincial support and access to low-cost capital, things can happen quickly. Since 2007, China provided up to $ 18 billion in cheap capital for the solar panel industry that was just beginning. By 2012, major solar panel manufacturers in Europe and the United States have begun to pose anti-dumping challenges to emerging industries in China. But by 2015, seven of the top ten solar panel makers are China, and China controls nearly half of the solar PV market.

More M & A deals

With the advent of “Made in China 2025” in China, China is pursuing a similar strategy of cheap capital and mergers and acquisitions. Foreign investors recognize that with China’s gradual integration into a market economy and increased transparency, the potential of China’s manufacturing industry may be growing, and more and more confident that its capital will be invested in Chinese enterprises. In fact, the value of M & A transactions in the aerospace, automotive, electronics and machinery sectors in Europe has jumped from USD 3.8 billion in 2014 (prior to “Made in China”) to USD 14.6 billion in 2015 and surpassed 220 One hundred million U.S. dollars.
China Midea Group recently purchased German robot maker KUKA, but also shows how China is moving toward itself. Midea is committed to upholding KUKA’s headquarters in Germany and supporting KUKA’s development strategy until 2023. Nonetheless, KUKA’s intellectual property has long been at risk, as is Germany’s strategic position in the robotics industry.

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