Four engines drive BAIC Group further up Fortune Global 500 list


At 7:30 a.m. U.S. Eastern Time, July 20, 2017, or 19:30 p.m. Beijing Time, July 20, 2017, the US-based Fortune magazine officially released the 2017 Fortune Global 500 list. BAIC Group ranked 137th on the list with operating income of USD 61.13 billion, up by 23 rungs over the previous year.

On the afternoon of July 21, BAIC Group held a press conference on its ranking again in 2017 Fortune Global 500, and Ms. Zhang Dan, representative of Fortune Global 500 in China, announced that BAIC Group ranked 137th on the list. Mr. Zhang Xiyong, General Manager of BAIC Group, introduced the development of BAIC Group and answered the questions from the media. Dozens of mainstream media at home and abroad as well as the leadership of relevant departments of BAIC Group headquarters and BAIC Group’s key member units attended the press conference.

Since it hit the Fortune Global 500 list for the first time in 2013 taking the 336th place, BAIC Group has stayed on the list for five consecutive years and has constantly improved its ranking by 199 rungs. In the past five years, BAIC Group has repeatedly achieved leapfrog development by seizing development opportunities, identifying its development strategy, setting up development goals, working hard and pragmatically. In 2012, BAIC Group sold 1.71 million vehicles and achieved sales revenue of RMB 210 billion. By 2016, BAIC Group has remarkably increased its annual sales to 2.85 million vehicles, with its operating income exceeding RMB 400 billion.

By 2020, BAIC Group is expected to enter the Chinese automotive industry’s first echelon in terms of scale and strength, ranking among top 12 in the global automotive industry and top 100 on the Fortune Global 500 list.

In the past five years, BAIC Group has achieved rapid development, improved quality and efficiency, demonstrated its comprehensive strength, and established an excellent brand image. The four powerful engines driving BAIC Group’s continued rapid rise can be summarized as collectivized development, international development, proactive and innovative practice, and unique corporate culture.

The first engine: collectivization

The resource integration capacity will be the key to winning future competition. BAIC Group’s rapid and sound development should be first ascribed to the great resource integration capacity arising from the collectivized development strategy.

This year marks the tenth anniversary of BAIC Group’s implementation of its collectivized development strategy. In 2007, BAIC Group defined the strategy of “collectivization for leapfrog development”. In 2010, BAIC Group set up the goal of building itself into a strong, large, global, and harmonious company and formed the rapid development model with its strategy as the guideline, resource integration at the core, capacity building as the basis, and group management and control as the starting point. Through continuous efforts, BAIC Group has established the “Greater BAIC” pattern that is unprecedented in its development history and has completed the accumulation from small to big.

By integrating internal and external resources, combining international cooperation with independent development, adjusting and optimizing the product structure and industrial structure, and enhancing the comprehensive competitiveness across the whole value chain, BAIC Group has sharpened the competitive edge in its research and development system, manufacturing system, marketing system, service system, talent system, corporate governance, corporate culture, and other aspects over the past decade. Thanks to the collectivized development strategy, BAIC Group has established a differentiated brand structure with its proprietary brands “Beijing Auto” and “Changhe Auto”; has achieved the healthy development of Beijing Benz, Beijing Hyundai, and other joint ventures; and has continuously brought about highlights in emerging industries such as new energy vehicles, auto parts, auto service trade, auto finance, general aviation, and travel service platforms, as well as overseas business and other segments.

The second engine: internationalization

In order to enhance its international competitiveness and global influence, BAIC Group has been steadfastly implementing the international strategy and adhering to the combination of “bringing in” and “going out”. BAIC Group has constantly deepened cooperation with international partners Daimler of Germany and Hyundai of South Korea. The joint ventures Beijing Benz and Beijing Hyundai have made important contributions for BAIC Group’s continued growth and upgrading. After exploring the Chinese market deeply for fifteen years, Beijing Hyundai has won the recognition of eight million customers. Beijing Benz, with its long-term accumulation and outstanding achievements, has become a model of China-Germany industrial cooperation. In 2017, jointly witnessed by the state leaders of China and Germany, BAIC Group and Daimler Group signed a new agreement for more in-depth cooperation in the field of new energy vehicles.

The international strategy has secured high-quality resources for BAIC Group’s multi-format integrated development. BAIC Group has set up overseas research and development centers in “four countries and six places”. BAIC Group has joined hands with Italy Leonardo Group and New Zealand Pacific Aerospace Limited in the four segments of aircraft manufacturing, sales, operation, and service, actively exploring the blue ocean of the general aviation industry chain. In 2017, BAIC Group collaborated with Air France-KLM Group in establishing an aircraft line maintenance company to make inroads into high-end aviation services.

BAIC Group also holds high-level talent recruitment events in other countries on a yearly basis to assemble global elites. To date, BAIC Group has brought together national “1,000 Talent Plan” and Beijing “Overseas Talent Pooling Program” experts that account for 85 percent of overseas high-level personnel in Beijing’s municipal state-owned enterprises, helping to turn BAIC Group into an innovation benchmark in Beijing.

The international strategy has enabled the brand of BAIC Group to go global. In response to the national “Belt and Road” initiative, BAIC Group has been actively expanding its overseas presence. In the field of commercial vehicles, Foton Motor is a complete vehicle enterprise of BAIC Group to take the lead to access the overseas market. So far, BAIC Group’s passenger vehicle business has also fully entered the overseas market. Focusing on South Africa, Southeast Asia, Egypt, Mexico and other places, BAIC Group’s overseas layout is completely in line with the national “Belt and Road” initiative and has begun to show its advantages.

The third engine: proactive and innovation practice

Considering innovation as the source of power for a company’s development, BAIC Group has been promoting transformation and upgrading through proactive and innovative practice. In 2016, BAIC Group applied for 4,053 invention patents and was granted 2,741 patents. Facing the changing trend of the current and future global innovation environment, BAIC Group upholds the concepts of “open innovation, integrated innovation, and collaborative innovation” and has made a series of breakthroughs in science and technology, business models, and other aspects through continuous exploration and practice.

BAIC Group, by virtue of proactive planning and pragmatic work, grasps the “electric, intelligent, and networking” trend of the automotive industry to promote technological upgrading. BAIC Group maintains the leading edge in the field of new energy vehicles and ranks first among Chinese peers in pure electric vehicle sales for four consecutive years. BAIC Group is vigorously building an electric vehicle charging system; it has developed the “Smart Service” system, an all-weather exclusive pure electric vehicle service system; it is now popularizing the smart battery change model; it is the first company to obtain the new energy vehicle production qualification in China; it has established the New Energy Vehicle Industry Development Fund; its project of “integrated development and application of key technologies of C30-based pure electric passenger vehicles” won first prize of “China Automotive Industry Science and Technology Awards”.

In the fields of intelligent driving, Internet of vehicles, and other pioneering technologies, BAIC Group and IT giants are actively engaged in cross-industry cooperation. Based on such cooperation, BAIC Group has developed the “NOVA-PLS” intelligent development strategy. It will construct a comprehensive intelligent vehicle-related system and provide systematic intelligent tools for travel and urban life.

While pursuing technological innovation, BAIC Group has been strengthening the innovative practice of new business models. Relying on its achievements in the fields of new energy and intelligent technologies, as well as years of innovative operation experience in the time-sharing rental business, BAIC Group has developed innovative business models and has established an intelligent integrated travel service platform. Focusing on travel business and service business, BAIC Group is mainly engaged in car rental, financial leasing, taxi business, online taxi-hailing service, and other core businesses while extending to more service businesses. BAIC Group has gradually established a comprehensive travel business cluster and has achieved closed-loop development with its own characteristics covering the whole industry chain of people, vehicles, roads, Internet, and commerce, which will become a new driving force of BAIC Group’s transformation and upgrading.

The fourth engine: corporate culture

In the long run, corporate culture is one of the determinants of a company’s destiny. Having been engaged in automotive manufacturing for nearly sixty years, BAIC Group has accumulated profound cultural genes with its own characteristics. The accumulation has made BAIC Group what it is today. The outcome of future competition also depends on how BAIC Group will keep pace with the times and constantly enrich its own cultural connotation.

BAIC Group, adhering to the quality concept that “quality is the soul” and the quality culture of “giving priority to quality and operation management”, has established itself as a high quality company. At the same time, the craftsmanship of “tenacity, persistence, dedication, and perfection” has permeated all aspects of BAIC Group. As Xu Heyi, Party Secretary and Chairman of BAIC Group, put it, “We’re going to build the ‘BAIC craftsmanship’ with our own characteristics so that it can be passed down from generation to generation and become the long-lasting cultural gene and spiritual pillar of BAIC Group.”

As a backbone company of China’s automotive industry and the largest municipal state-owned enterprise in Beijing, BAIC Group is committed to implementing national strategies and promoting coordinated social and economic development as its mission and duty. BAIC Group has actively adjusted its industrial layout in response to the “Beijing-Tianjin-Hebei coordinated development” strategy and the requirement of building Beijing into “four centers”. BAIC Group is vigorously developing high-tech manufacturing services in Beijing. Beijing Hyundai’s fourth factory in Cangzhou of Hebei has driven the local vehicle parts logistics, trade in services, automotive finance, and other related industries, achieving a “1+1>2” synergistic effect in Beijing and Hebei and contributing remarkably to the coordinated development, mutual benefit, and win-win situation in the Beijing-Tianjin-Hebei region.

To enable the people to share the development fruits is the essential requirement of the socialism with Chinese characteristics as well as the responsibility of our state-owned enterprises. BAIC Group is actively involved in public welfare undertakings and is always concerned about the people’s livelihood. Through the charity brand of “BAIC Group Sunflower”, BAIC Group frequently helps poverty-stricken students, participates in disaster relief, and carries out other public welfare activities to reward the community. On the basis of development, BAIC Group continuously adds inputs to cultural and sports events and other public welfare programs. The Beijing volleyball revitalization program sponsored by BAIC Group has delivered wonderful results; BAIC Group has established strategic cooperation relations with China Open, Beijing International Marathon, and the national parachute team; and BAIC Group has reaped titles in the Tour of Qinghai Lake (International) Electric Vehicle Challenge and the Tour de Taklimakan Desert (International) Auto and Motorcycle Rally. In 2017, BAIC Group has intensified its presence in the cultural sphere. BAIC Group and China Central Television have jointly launched the outstanding cultural and emotional program “Readers” to lead the cultural trend; BAIC Group again released the performing arts brand of “BAIC Blue-Guard Olympic Park Summer Music Season” to enrich the cultural life of Beijingers.

BAIC Group’s sustainable growth is attributable to the four engines of collectivization, internationalization, innovative practice, and corporate culture. In the future, BAIC Group will continue to promote collectivization and pursue proactive and innovative practice at a higher level. BAIC Group will keep vigilant in difficult times, be mindful of danger in favorable circumstances, and be prepared for challenges as it grows bigger. BAIC Group will enhance the sense of crisis and the sense of urgency, deepen transformation and forge ahead, constantly increase international competitiveness and global influence, and make fresh contributions for the Chinese auto industry’s shift from being big to being strong as well as Beijing’s social and economic development.

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