How Benchmarking Helped China's Auto Industry Rise

Hi my linkedin family 🙋, Let's discuss about the background of chinese automotive industry. From "𝗢𝗹𝗱-𝘁𝗲𝗰𝗵, 𝗟𝗼𝘄 𝗰𝗼𝘀𝘁" 𝘁𝗼 "𝗟𝘂𝘅𝘂𝗿𝘆" 𝗮𝗻𝗱 "𝗛𝗶𝗴𝗵-𝘁𝗲𝗰𝗵": The Chinese Automotive Industry's Legacy is a Masterclass in Accelerated Evolution. This pyramid chart is a stunning visual representation of just how dynamic the Chinese automotive market is, showing over 100 active brands and their positioning! But to truly appreciate this, we need to look at the legacy that made this transformation possible. Many see the current landscape—dominated by electric vehicles (EVs) and smart tech—as a sudden emergence. The truth is, it’s built on decades of foundational work: 🛑 𝗧𝗵𝗲 𝗘𝗮𝗿𝗹𝘆 𝗙𝗼𝘂𝗻𝗱𝗮𝘁𝗶𝗼𝗻 (1950s - 1970s): Companies like FAW (First Automobile Works) and Dongfeng were established as state-owned enterprises, primarily focused on commercial and heavy vehicles. This built the initial manufacturing muscle and supply chain. 🛑 𝗧𝗵𝗲 𝗝𝗼𝗶𝗻𝘁 𝗩𝗲𝗻𝘁𝘂𝗿𝗲 𝗘𝗿𝗮 (1980s - 2000s): China mandated joint ventures (JVs) for foreign automakers to enter the market (e.g., VW-SAIC, GM-SAIC, and others). This policy was a crucial catalyst, forcing local partners to rapidly absorb foreign technology, quality standards, and modern manufacturing processes. 🛑 𝗧𝗵𝗲 𝗥𝗶𝘀𝗲 𝗼𝗳 𝗜𝗻𝗱𝗲𝗽𝗲𝗻𝗱𝗲𝗻𝘁 𝗕𝗿𝗮𝗻𝗱𝘀 (2000s onwards): Brands like Geely, Chery, and Great Wall Motors (GWM) began as domestic, affordable alternatives (the "Entry mainstream" and "Mainstream" base of the pyramid). They focused on volume, learning, and improving quality step-by-step, eventually earning consumer trust. The Current Game-Changer: Today, that decades-long learning curve has culminated in the top tiers of this chart: 🛑 𝗛𝗶𝗴𝗵-𝘁𝗲𝗰𝗵 & 𝗣𝗿𝗲𝗺𝗶𝘂𝗺: Brands like NIO, Li Auto, XPeng, and AITO (Huawei-backed) have emerged with an EV-first approach, unburdened by the legacy combustion engine technology. They are prioritizing software, connectivity, and digital user experience, setting a new global benchmark. 🛑 𝗧𝗿𝘂𝗲 𝗟𝘂𝘅𝘂𝗿𝘆: Brands like Hongqi (FAW's luxury marque) and Yangwang (BYD's ultra-luxury division) show the ambition to compete on the world stage at the absolute highest level. The transition from the "Old-tech" base to the "Luxury" and "High-tech" apex is the true legacy—a testament to strategic national industrial policy, relentless learning, and an unwavering commitment to leapfrogging the competition, especially in the EV sector. What Chinese brand on this chart do you think is best positioned for global success in the next five years? Share your thoughts! 👇 BYD BYD India Private Limited #AutomotiveIndustry #ElectricVehicles #ChinaAuto #GlobalMobility #Innovation #BusinessStrategy #LinkedInLearning

The Chinese Model of Automotive Development Part 2: New Trends & Model Sustainability China’s automotive industry is evolving toward a consumer goods model, driven by three key trends: . Brand proliferation, including traditional and new entrants targeting niche markets. . Shorter model lifecycles: 12–18 months versus 24–36 in the West. . Product fragmentation due to rapid cycles and more brands In this context, cost reduction is essential — achieved via standardization, shared platforms (OEMs and Tier 1s), faster development, and intensive work culture. As exports grow, the sustainability of this model becomes a key concern. Domestically, the challenges are real but actively managed. With the real estate sector under strain, the state is turning to the auto industry as a growth engine. China’s fundamentals — scale, planning, innovation, resilience — remain robust. Key dynamics include: . Tighter access to financing. . Strategic control of battery and critical material supply chains. Restructuring aims to better balance competitiveness, innovation, and profitability. While survival dominates today, innovation and long-term margins are expected to regain focus. Unlike Japan and Korea in past automotive waves, China controls the full EV value chain, including rare earths — a strength, but one that increases exposure to trade retaliation. International expansion is challenging. China’s model resonates with developing markets, but mature regions present barriers: protectionism, regulations, local expectations, and consumer loyalty. Price alone won’t ensure success. On the tech side, China leads in electrification, autonomous driving, and connectivity. Yet, the push for differentiation has led to excessive features and hardware whose actual value is being questioned. Despite NEV leadership, diverse powertrain solutions will be needed. Relying solely on battery EVs won’t address all consumer needs. Extreme standardization, while efficient, is limiting emotional appeal and design. Recent Shanghai Auto Shows reflect this. Ironically, lower volumes should allow for boldness — but that’s not yet happening. The automobile remains an object of passion. Today, that passion lives in visionary founders — of BYD, Chery, Geely, NIO, and others — reminiscent of icons from Europe, the U.S., and Japan. Yet, no truly legendary Chinese model has emerged. Building global brands takes time, identity, and consistency — not all will succeed. Lastly, standard-setting is becoming strategic. China is starting to grasp this but lacks influence — for now. Its supply chain advantage is real, but global rule-making power is still developing. 📌 In the next part, we’ll explore key takeaways and conclusions. Thanks for reading! Patrick KOLLER & Jingcheng LI

Last week Toyota Motor Corporation unveiled a new brand strategy. All automotive offerings have been restructured into five distinct brands. More details, plus concept cars, will be exhibited at the Japan Mobility Show 2025 (JMS) in Tokyo beginning next week. https://lnkd.in/g5WqZF39

Ningbo Longjia Super Factory: The official launch on LinkedIn is aimed at empowering the global motorcycle industry with smart manufacturing 🎉 🎉 Dear global LinkedIn friends, Today marks the official launch of Ningbo Longjia Super Factory's LinkedIn account. Moving forward, we will share insights here on smart manufacturing technologies, global supply chain case studies, and industry-leading innovations. We are also eager to explore potential collaboration opportunities with industry peers, buyers, and technical talent. By clicking "Follow", you will gain insight into how China's advanced manufacturing strategies are driving new growth in the global motorcycle industry.

The automotive industry is witnessing a transformation where cars are no longer just products but evolving into complete sensory experiences. Toyota is at the forefront of this evolution, investing in in-car fragrances to redefine the vehicle environment. This innovative initiative by Toyota includes a scent generator capable of emitting three distinct aromas, allowing occupants to customize their surroundings. The perception of scents is influenced by factors such as age, gender, and cultural background, presenting a unique technical challenge for developers. Contrary to popular belief, the familiar "new car smell" is a combination of plastics, rubber, leather, and adhesives, with variations based on the manufacturing location. Introducing the CMFX concept (Color, Material, Finish, Experience) expands automotive design to stimulate senses beyond sight and touch by integrating fragrance into the driving experience. In practical implementations like the Lexus ES, exclusive scents are dispensed from a device in the glovebox, tailoring the car's ambiance to the individual's preferences. However, designing these fragrances comes with challenges as aromas can disperse or be absorbed by different surfaces based on airflow and materials used. To overcome these obstacles, Toyota's experts, well-versed in olfactory perception, have contributed their expertise to enhance testing and selection processes, ensuring a harmonious and delightful sensory experience for car occupants. (Source: Toyota Times - Beyond Mobility)

TOYOTA SUPPLY CHAIN MANAGEMENT: TOYOTA'S PROFILE IN THE 4Vs MODEL 📙 Toyota's Profile in the 4Vs Model Toyota's Production System, particularly in its final assembly plants, is a fascinating case because it doesn't fit neatly into the old "low-variety, high-volume" mass production model. It created a new paradigm. Toyota's system represents a very specific and highly optimized profile within this 4Vs model. Let's break down the four factors and then see how Toyota's system specifically aligns with them. 📙 Volume: High, but not monolithic. Toyota plants produce a high volume of vehicles in total, but this is achieved through many small batches of different models. 📙 Variety: Very High. A single assembly line can produce multiple models (e.g., Camry, RAV4, Lexus ES) with thousands of potential configurations (engine type, color, trim, options). This is the core of "mass customization." 📙 Variation: Actively Minimized. A core principle of TPS is Heijunka (production leveling). The goal is to smooth out the natural variation in customer demand to create a predictable and steady production schedule. This is done by mixing different models and options in every sequence. 📙 Visibility: Low (External), but Very High (Internal). 👉 External (Customer): The customer has no visibility into the car assembly plant. It's a "back-office" process. 👉 Internal (Process): This is where Toyota excels. The entire system is designed for high internal visibility of problems using tools like Andon cords, Kanban cards, and performance boards. Any abnormality is made immediately visible so it can be fixed. 📙 In conclusion, the 4Vs model helps us understand that Toyota didn't just make cars efficiently; it designed a revolutionary operating system that could thrive with a specific combination of high volume, high variety, low variation (through leveling), and supremely high internal process visibility.

In many companies, industrial #strategy still relies on the traditional sequence: forecast → planning → production → inventory But how is that supposed to work in a VUCA world? With a global network of more than 70 production sites, Toyota’s industrial strategy is worth studying in depth. It's both realistic and remarkably relevant today: 📍 1️⃣ A “mother” plant in Japan 📍 2️⃣ “Daughter” plants distributed around the world The youngest daughter plants produce the minimum volume guaranteed by their local market, which #stabilizes their operations. This level evolves over time, guided by carefully managed #TaktTime, without sudden disruptions. When a spike in demand occurs for a vehicle model, the mother plant, equipped with a highly #Flexible line capable of producing up to 8 different models, absorbs the surplus and ships additional vehicles to fulfill the orders. This is where the genius of Toyota’s #JustInTime system lies, built on a simple yet powerful principle 👉 “Sell one, make one” When sales exceed what can be produced locally, Toyota’s #ValueNetwork takes over to ensure customer satisfaction. Brilliant! But this model only works because Toyota pushes the logic all the way: For a single line to produce 8 different models, the #WorkContent of each model must be relatively similar in order to remain balanced with the takt time. That’s why #engineers are present on the production #gemba, studying in great detail, down to the second, the work content of each vehicle. Even 60 years later, they continue to discover new #kaizen opportunities to reduce these variabilities. It never ends ! In a VUCA environment, true competitive advantage no longer lies in the precision of your forecasts, but in your industrial system’s ability to create #stable #conditions within a #changing #environment. #LeanIsAwesome

🚗 9 Japanese Legends Who Rewired an Industry 🇯🇵 Visionaries who transformed Japan and the world through engineering, innovation and relentless kaizen (continuous improvement). When we think of Japan’s global influence, one industry stands tall: automotive and engineering. Behind the logos we see every day, think Honda, Toyota, Nissan, Mazda, Subaru, Suzuki, Mitsubishi, Yamaha and Kawasaki, are people who dreamed beyond convention. Each of these founders built more than machines. They built movements born from workshops, war ruins and pure determination. Meet the nine pioneers who reshaped mobility and manufacturing forever: 1️⃣ Soichiro Honda (Honda) A fearless tinkerer who lived by „The Power of Dreams.” From piston rings to motorcycles to cars, his precision and passion defined Japan’s modern engineering spirit. 2️⃣ Kiichiro Toyoda (Toyota Motor Corporation) Son of a loom maker who transformed a textile firm into an auto giant. His Toyota Production System became the world’s benchmark for efficiency and quality. 3️⃣ Yoshisuke Aikawa (Nissan Motor Corporation) An industrial visionary who merged multiple firms to create Nissan, uniting Japanese craftsmanship with Western mass production. 4️⃣ Jujiro Matsuda (Mazda Group) From poverty to pioneering the rotary engine, Matsuda built Mazda on resilience, innovation and bold engineering. 5️⃣ Chikuhei Nakajima (Subaru) An aviation engineer who founded Nakajima Aircraft, the roots of Subaru. His mastery of aerodynamics still shapes the brand’s DNA today. 6️⃣ Michio Suzuki (today Maruti Suzuki India Limited ) Starting with looms, he pivoted to motorcycles and compact cars, proving adaptability and simplicity fuel long-term success. 7️⃣ Yataro Iwasaki (Mitsubishi Corporation) His 19th-century shipping firm evolved into a powerhouse spanning cars, finance and heavy industry .. symbolizing Japan’s rise. 8️⃣ Torakusu Yamaha (Yamaha Motor Co., Ltd.) A self-taught engineer who fixed a school organ and founded one of the world’s most respected musical and mechanical brands. 9️⃣ Shozo Kawasaki (Kawasaki Heavy Industries, Ltd.) From shipbuilding to steel to motorcycles, he envisioned Japan’s modernization through industrial strength and speed. 🔧 These weren’t just businessmen, they were engineers, artisans and dreamers. They faced war, scarcity and competition, yet their principles - innovation, craftsmanship, respect for people and continuous improvement - became Japan’s industrial DNA. From motorbikes to bullet trains, their ideas still drive us forward. 💡 Lesson for leaders: Innovation doesn’t grow in comfort. It grows from curiosity, courage, and care for the craft. Every great company begins with someone trying to make life a little better. #Leadership #Innovation #Kaizen #Japan #AutomotiveIndustry #EngineeringExcellence #Toyota #Honda #Mazda #Nissan #Subaru #Suzuki #Mitsubishi #Yamaha #Kawasaki #Manufacturing #ContinuousImprovement

BRAND STRATEGY BEHIND GLOBAL AUTO GIANTS’ COMEBACK IN CHINA’S EV MARKET Legacy automakers like Volkswagen, GM, and Nissan, once sidelined in China’s fiercely competitive EV sector, are making a calculated return. Their approach offers a blueprint in strategic brand reinvention, but also raises critical questions about long-term identity. Key elements of their China-specific brand strategy: 𝗩𝗮𝗹𝘂𝗲 𝗥𝗲𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻𝗶𝗻𝗴 ➢ Dongfeng-Nissan’s N7 delivers 635 km range and advanced ADAS at RMB 119,900 ($16,500). By offering premium features at aggressive price points, they are redefining what value means in China’s EV market. 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻 ➢ Buick’s L7 extended-range sedan blends 302 km pure EV capability with 1,420 km total range. This hybrid solution addresses both urban and long-distance needs, reinforcing a brand promise of practical innovation and reliability. 𝗟𝗼𝗰𝗮𝗹𝗶𝘇𝗲𝗱 𝗕𝗿𝗮𝗻𝗱 𝗘𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 ➢ Volkswagen’s Yuzhong 07 demonstrates deep “In China, for China” adaptation, German engineering principles integrated with Chinese digital and connectivity expectations, creating a brand narrative that resonates locally. Yet, these strategic moves come with trade-offs: Margins fell to 3.9% in April 2025 amid aggressive price competition, highlighting a key tension: how to win in China without diluting global brand equity. The challenge for global auto giants is now clear: Can they localize their brand deeply enough to capture market share while preserving what makes them globally iconic? #BrandStrategy #ChinaEVMarket #GlobalAutomakers #EVInnovation #Localization #ValueRepositioning #BusinessTransformation #China