The term Industry 4.0 originated in 2011 from a high-tech strategy project sponsored by the German government, which promoted the computerization of manufacturing. Since then, China’s government has been actively embracing the principles of Industry 4.0. In October 2014, China and Germany signed the Sino-Germany Cooperation Action Plan, under the theme “Design Innovation Together”. This plan facilitates bilateral cooperation by creating a China-Germany “Industry 4.0 dialogue”, and incorporating the Industry 4.0 topic into the China- Germany Standardization Cooperation Commission. Meanwhile, the two countries have committed to improving cooperation in areas such as mobile internet, Internet of Things, cloud computing and big data, while providing policy and regulatory support.

While such efforts are a good start, there is a general lack of understanding among business, academia and government regarding the developments related to Industry 4.0. Given China’s rapid industrialization and economic development, it is not surprising that there may be different opinions of where China stands in the development of its various industrial sectors. For example, some views that China’s automotive industry may have reached the Industry 3.0 era from the hardware perspective, but from the software perspective it’s still in the 2.0 era, while the leadership mindset remains in the 1.0 era.

In short, Industry 4.0 will connect users, equipments and products in real time, allowing factories to produce products that are fully personalized to the individual’s usage patterns and preferences. Industry 4.0 will connect consumers, equipments and products in real time and will improve the overall customer experience of mobility. Owners would have even more choices, perhaps including the option of a factory experience allowing the consumers to observe or even participate in the manufacturing process. Factories will produce based on individual orders and save order-to-delivery cost.

Key Trends That China’s Automotive Industry Is Adapting To Accommodate Changes For 4.0

Trend 1: Digitization of the Traditional Value Chain:

–  Pic1-(Product Lifecycle Management).

Trend 2: A Consumer-to- Business (C2B) Model Prevails:

Pic2 (Traditional Model: B2C Product-Centric Value Chain)

Pic3:- The new model: C2B user-centric value chain

Trend3: Connectivity Transforms the Vehicle into a Platform for Services.

Pic 4:- Connected Vehicles

Trend4: Evolution From “Transportation Hardware” to “Connected Mobility Solutions”

Pic 5: – The Future Car is a Connected Mobility Platform

Trend 5: “Big Data” and Ecosystem-Based Engagement with Mobility Solutions Users.

 

What Are Other Markets Doing?

BMW expanded its mission statement from “the world’s leading provider of premium products,” to include the words “and premium services for individual mobility.”

Mark Fields, CEO of Ford Motor Company, has launched a Smart Mobility division, stating that “we need to keep investing in our core business, which is making and selling cars and trucks…but we’re also a mobility company, and that means encouraging an innovative mindset, challenging assumptions and moving fast.”

Bosch, a German Tier-1 supplier of components, has launched its own- branded aftermarket car services network.

Federal-Mogul, a US auto component supplier, has established a joint venture 
with China Automotive Import and Export Co., Ltd (CAIEC), an automotive dealer operator, to offer an aftermarket vehicle repair business.

China’s auto industry is being digitally disrupted and is rapidly entering the Industry 4.0 era, which will fundamentally transform the business model of the industry, and unlock new ways of delivering value to the end user. The scope of this transformation is far beyond just technological innovation or industrial upgrading, requiring a fundamental re- thinking of the value capture and delivery system of the industry.

Author: Seerat

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