It has to be said that Dr. Yang Xiaoming's view is quite penetrating. During the Shanghai Auto Show on April 19th, this media group interview showed that Anbofu's strategic ambition is far higher than that of several other Tier1 peers.

　　This is his job. As the President of Amboff Asia Pacific, he must think about how Amboff can survive in the Chinese market amidst this huge wave of change. At the same time, he also exhibits a very good sense of balance and flexibility, which can connect completely different perspectives.

　　If all current Chinese car brands are in a state of turmoil, then the Tier1 giants represented by Bosch and Amboff are even more so. The difference is that the former is well-known to consumers, while the latter is hidden beneath the water surface. Perhaps it is precisely because of this that they can have a clearer and earlier insight into the direction of the turbulent flow beneath the water surface.

　　After the hustle and bustle of the Shanghai Auto Show, looking back at this conversation, there are many things worth pondering. (This article is excerpted from the shorthand of the on-site conversation, with some deletions)

　　1. Price war is a symbol of industry transformation

　　Reporter: Recently, several new energy vehicles have been launched, and as soon as they are listed, the price is set to make everyone feel very valuable. It makes people feel that the industry has started rolling from pricing. What is your opinion?

　　Yang Xiaoming: The price war you are seeing now, we saw it 18 months ago because at that time they had already set all the prices for mass production, and we already knew the cost requirements for the supply chain.

　　Looking at this matter rationally, I think it is a symbol of industry transformation. Why is this situation happening at this time? The reason is that China's intelligence and electrification have reached a certain level. In the absence of a significant increase in the production and consumption of automobiles, the growth of new energy vehicles has been too rapid. This quantity is constantly increasing, which will inevitably lead to a decrease in costs. In the end, consumers will inevitably demand a price reduction, just like the discussion of batteries in previous years. So, providing consumers with new and more competitive products, I think this is the trend. Of course, if it happens in a concentrated manner, it will make everyone feel like it has rolled up, but it is actually due to the reduction of costs and the acceleration of transformation speed, which is the direction.

　　With the rapid iteration speed of the Chinese automotive market, every enterprise, including ourselves, has no future without transformation and cost reduction.

　　Another phenomenon that everyone is discussing is why this round of price cuts did not bring about an increase in overall vehicle sales? Because it's not like you lower the price and the consumer jumps up. What I (the consumer) want now is a car that I think will be worth it in the future.

　　2. We want to be a platform supplier for middleware

　　Reporter: What does Mr. Yang think of the difficulties currently encountered by Huawei's Hi model?

　　Yang Xiaoming: Huawei is currently one of the few companies in the world that is working on operating systems. There are only a few operating systems that are truly used for mobile phones, including Android, iOS, and Harmony. Everyone knows how to handle some of the challenges Huawei faces, and it's not just about the chip itself. So, these things have caused it to encounter high computing power chips in recent years and how to solve them.

　　Reporter: From the current real progress of Huawei, including Yu Chengdong's expression in public, the current (main challenge) is not chips or Hongmeng, but the main manufacturers do not accept this set, which is the so-called complete electronic and electrical architecture and module gameplay. Does this indicate a certain trend?

　　Yang Xiaoming: On the contrary, the industry has been discussing this issue, and its core is that the entire industry chain is being rearranged. After removing the engine and gearbox from the core technology of the main engine factory, there is a lot of discussion about what the main engine factory does and what the primary supplier does.

　　In fact, the statement you quoted, I think it is the view of some people who have not been deeply involved in the industry and have not talked to the main engine factory. In fact, after discussing with the host factory, for example, when we cooperate with the host factory, the host factory is very clear about what it wants to do and what it wants us to do. We have been saying that we want to make cars based on middleware, which is also a server platform. We can build the brain and nerves of cars on a cloud shared platform, such as our wiring harness and sensors, and integrate them into the future platform.

　　In the new mode, everyone is cooperating very well. China's main engine manufacturers are the fastest growing, and they are already very clear about which part of the core needs to be done, and there is no contradiction among them. For example, building the next generation of electronic and electrical architecture for the main engine factory, our fastest customers are all in China, not everyone mentioned. The main engine factory does everything because the main engine factory is very clear about what it needs to do. The things we make are things that it cannot or cannot do.

　　Reporter: You just emphasized middleware, does that mean that as long as the host factory makes its own operating system and basic underlying software, everything above this is entrusted to you?

　　Yang Xiaoming: What we are doing is deeper things below this. And our middleware is integrated with it and open to it. We are not only open to one company, but also to the same industry. For example, if the OEM thinks that I don't want to use your seventh generation radar as the auto drive system system, I would like to use another one. Of course, it's OK, no problem. But how to install this middleware? There is no such platform besides Fenghe, and currently there is no such platform in the industry to carry it. I think a while ago in the industry, when it came to promoting software to define cars, it seemed like everyone who worked on hardware had to die. How do you make that car? Now everyone is not talking like that. Now it is said that the entire machine factory needs to do everything, afraid that your supplier will do all the business of the entire machine factory after completing it. In fact, this is all some fallacy.

　　Reporter: Normally, there are various understandings during the period of change. Does that mean that Anbofu has broken through the traditional concept of a first tier supplier in the past, and you want to develop into a platform level supplier?

　　Yang Xiaoming: I think we are still a first tier supplier, but I have been saying that because new energy is a new product, it is not the same product as fuel cars, and the things that a first tier supplier does cannot be the same as before. For example, when we split the powertrain system in 2017, what did everyone think you wanted to do? At that time, we said we didn't want this business anymore, and the entire industry said what you were doing? We say there is no room for this in the future. Because a new product has arrived, we cannot compare it with traditional cars. Now that this car is not the same as the original car, the work scope of the first tier supplier and the entire vehicle factory must be adjusted.

　　3. Intelligent factories reduce costs by 25%

　　Reporter: Just now you mentioned that product iteration is fast, and research and development is also fast. So what about manufacturing? Anbofu has many factories in China, and I would like to inquire about the factory's iteration or upgrade actions.

　　Yang Xiaoming: Very good question. In this wave, it is possible that China may not only have new energy vehicles, but also intelligent chemical plants that may become the forefront of the world.

　　The automotive industry used to give you an 18 week forecast and a fixed 4 week forecast, but now it is approaching a fixed 1 week. After having an intelligent factory, I can now achieve a 2-day fixed time. I used to build a pile of inventory, and I had 4 weeks of inventory piled up in the warehouse because you were fixed 4 weeks ago. I always produce more, while you always take less, resulting in unimaginable waste.

　　Now intelligence is different, I am constantly learning. For example, this customer used to order 30 out of 100, but started ordering 60 out of 100 in a certain quarter. The database of the smart factory is constantly tracking, which can track every order you enter. How did you perform last week, such as ordering 100 out of 80 or 75 out of 80.

　　This set of central feeding system is driven by algorithms and data. If you order 100 pieces, I know that you really need 80 pieces, so I will arrange 80 pieces. After production is completed, each piece can be tracked. Now the warehouse location can be achieved, and I know where every box is. Previously, I didn't even know where the shovel boards were, but I knew there were 23 shovel boards in the warehouse.

　　Shanghai is vigorously promoting the intelligent production driven by software. Shanghai utilizes the advantages of foreign enterprises, so the Foreign Trade Association has organized a specialized committee for intelligent production, and I am the chairman of the committee. That's why as soon as I started studying, I realized that several industries were doing better than our automotive industry, such as packaging and chemical industries, and the intelligence level of cosmetics production and manufacturing was higher than that of automobiles. Our own experience shows that after using this AI system, manufacturing costs have decreased by 25%.

　　4. China is leading this transformation

　　Reporter: The big blue oceans we used to see are gone, and everyone wants to find a way out, but as a result, many car companies and suppliers are attacking in all directions. At this point, it will be discovered that in their view, it is innovative business, but in reality, there will be a lot of overlap. Let me give you an example. We are doing 4D millimeter wave radar in Anbofu, and other companies are also doing millimeter wave radar. Intelligent driving, even Webasto, which makes roof skylights, is also doing it. If everyone extends their tentacles so long, but there are actually so many cakes, will they inevitably encounter business shrinkage in the end?

　　Yang Xiaoming: The phenomenon you mentioned is the same as the macro situation of China's car manufacturing market. How many years ago did we mention that there are only three to five large companies in the United States, with over 200 of us? Has the integration been completed? So far, it has not been completed. I think the phenomenon I am currently seeing is somewhat similar, but not entirely the same. After all, this market is quite large, and due to various environments, such as support from local governments and special policies, some enterprises still have the opportunity to continue to compete without core capabilities or reducing costs.

　　But for a company that can truly sustain long-term development, I think there should be several characteristics: first, do you have platform based products that are truly suitable for the current intelligent transformation; Secondly, can you continuously innovate, because China's iteration speed used to be able to follow, but now it's impossible to catch up; Thirdly, do you have a complete supply chain system and highly reliable manufacturing capabilities to support future products. If we look at it from these perspectives, there are inevitably some companies that will encounter problems after the wind stops.

　　We sometimes like to think from the perspective of regulation, but in fact, the market cannot be regulated. As long as it exists, sometimes it is reasonable. It is reasonable from a certain perspective. For example, some car companies may not seem to have much difference in material costs compared to the selling price, but why? Because it doesn't necessarily have to make money in the car. I think looking at this issue rationally is the same as looking at the whole vehicle integration that Chinese cars have been calling for a few years ago. It has such a process. Because the transformation of the Chinese automotive market has come too quickly, and China is leading this transformation. In the past few years, China had an advantage, which was why we wasted less. In fact, it was because we had a role model to learn from, and the supply chain dominated by joint ventures taught us how to do it. But now, in the field of new energy vehicles, we need to teach others how to do it.