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Helen Tang: Corporate Communications Director - FGS Global
21 Plays14 days ago
In this episode, we let Anwar back out of the basement for a conversation with Helen Tang, Director at FGS Global.
Conversation about the GCC’s automotive landscape is increasingly dominated by the Chinese industry, so we brought on someone who truly understands the market from the inside. A recent transplant from China, Helen previously advised giants like Volkswagen on navigating the world’s most aggressive EV market. We discuss the misconceptions she’s seen in the UAE, how different brands are perceived in their home market, and how Chinese automakers moved so far ahead when it comes to EVs.
If you want to get in touch with us, you can reach us at:
Gulf.specgcc@gmail.com
or
https://www.instagram.com/gulf_spec_podcast/
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Transcript
Introduction and Podcast Setup
00:00:00
Speaker
and what we didn't want to We didn't want it to look like a job interview. So that's why we're saying, yeah. How many experiences? This is a nice way to start. Yeah.
00:00:13
Speaker
Welcome to the GulfSpec podcast. I have no idea what episode we're on anymore, but Anwar's back in person.
Helen Tang's Background and Automotive Industry Insights
00:00:20
Speaker
I'm here back. So we found him and we've unlocked the basement that we kept him in and he's here now. There's no basement here. They've got nice glasses. Thank you very much, by the way. Yeah. So, yeah, so we're doing that. But also with us, who we have is Helen Tang, who is a director at FGS Global. So full disclosure, yeah, she does work with me.
00:00:37
Speaker
um And we've had a lot of really, really interesting lunchtime conversations about the automotive industry and Chinese cars in general, because up until relatively recently, you were working with FGS in China yeah with Volkswagen.
00:00:55
Speaker
yeah So why don't you tell us a little bit about that first to start off with? Tell us a little bit about yourself and, you know. Sure. Firstly, really, thank you for inviting me to to your podcast. um And yeah, I work for Volkswagen. So it's one of my long term clients in China. So we work for Volkswagen Group China. That's the name of their Chinese business. And it's on corporate communications. So I'm personally personally not a car enthusiast.
00:01:24
Speaker
but kind of from working experience and also from my personal experience, I kind of have several touch points with the car industry. So one is my experience working with Volkswagen, and second is that I was born in a city well-known for car manufacturing. So Volkswagen had their first joint venture with a Chinese company in my city. So some of of my friends work in that company and people talk about cars and there are a lot of Volkswagen cars in my hometown.
Volkswagen's Challenges and Innovations in China
00:01:54
Speaker
And when I work with Volkswagen, it's about their electrification, the transformation in China. So they were pretty successful in the S era, especially with those strong joint ventures in my hometown, there also another one in Shanghai.
00:02:09
Speaker
but now they are facing this growing competition from Chinese brands. In my work, it's not about like car models, but more about like the transformation, like battery, like charging, and the electric architecture. and like also other corporate topics like sustainability. So it's a combination of ah corporate topics, but very interesting because in that experience, we also like look at the peers, like what's happening in china China's car industry. It's not about like competing with other ICE car makers, but also the Chinese brands, especially in EVs who are like growing really fast. So that's kind of my background.
00:02:52
Speaker
ah What time period was that? Because you mentioned ice and electric because that transition happened very quickly. So was it, yeah what what was the time period that you were working on the brands? ah I think it was 2020. Okay. To 2020, maybe 2021 to 2024. Okay, cool. So very recently. Yeah, very recently. But you saw a massive change even in that time period as well. Actually from that point, when I started, it's already like talking about electrification because this topic actually started from Europe because of the climate challenges.
00:03:26
Speaker
um But like they bring its topic really early, but then Chinese brands, they catch up very fast. So they've been talking about it for a long time, but it's recently they have been very, ah like they pushed very strongly in terms of like ICVs, intelligent to vehicles, those kind of things. They set up another joint venture, which is Volkswagen Anhui in awei yeah central province of China. And they are having establishing an ICV car R&D center in that city. Ice.
00:04:01
Speaker
ah No, ICV, Intelligent Connected Vehicles. Oh, ICV, yeah. Yeah. That's just a year. I'm like, okay. I'm glad you're here. I'm learning. yeah yeah They're so far ahead. Yeah. Like previously in the ICE era, even though the manufacturing all happened in China, so they produce Volkswagen, Audi, all in China, but R&D is still in Wolfsburg. Mm-hmm. So they have the core technology at hand. But now they're having this ICV R&D center in China because the innovation is there. Do you want actually do introduce, because we've kind of jumped in already, what would like the broad topics, Mo, if you want? like Well, I think the reason it's important to have this conversation right now is that i think Helen is the only person I know that has experienced the Chinese industry from China
00:04:47
Speaker
or Chinese automotive industry and worked for the industry there as well, as well as seeing what's happening here. Right. And I think we've seen that episode after episode, we try to avoid, you know, we can try to avoid the conversation, but in the GCC, I mean, we just saw the recent sales numbers. Remember, we were looking through those and for the GCC. I'm literally pulling data up now. Jator is like what? Top three or top five in every GCC market other than Saudi, where Saudi, Chang'an, and MG have become pretty prominent. MG is also on every single one of them. So we're seeing this, you know, like it's just happened so fast. Like somebody asked me about this this morning.
00:05:24
Speaker
like and it's 2022 late 2022 i was buying my car china chinese car options were limited there was like mg and there was shang and there were a few but they weren't they weren't there wasn't it wasn't anything that was worth considering now everything you did you talked about mg6s you talked to me you like i did the mggt but that was like the beginning and i'll be honest when i test drove them i was like But like now you've got everything from Neo to Avatar to like, there's so many cool brands out there and it's, it's, it is a bit difficult to understand sometimes, but I think the biggest, the biggest, one of the biggest things we want to understand from this conversation is you've actually heard some of our previous podcasts now. and There might have been some misconceptions that you believe exactly you can misconceive to some truths. So what was it what were the broad things that you kind of felt in previous
Chinese Automotive Brands Abroad
00:06:15
Speaker
conversations? We're more than happy to talk to you, but you know who you are. yeah
00:06:18
Speaker
So I think actually you've touched upon a couple of good points, especially the brand's image of Chinese cars. Because I think from Chinese perspective, demand side, always product go first. So they are not quite Actually, those brands have their like distinct brand image in China, some of the brands. But probably when they start to expand overseas, they still need time to understand the market and then figure out how to build their brand image here because there are cultural differences. And they probably some of the companies, because they are EV comp startups, they are stretched with resources. So probably that's the reason. Also, I feel that dealers are playing a very important role here.
00:07:02
Speaker
like you mentioned Jettler sells really well here because probably because the the dealer and also byd is setting up here and they are partnering with the biggest family yeah for ta yeah yes yeah team yeah for team byd no byd's for team who else I thought Altair was one of them Altair, can't remember who they are, but I know Rostamani has Ziker Smart. But I think the important point is every single big name here oh yeah it has to have a Chinese brand. I think it's also interesting because when I was looking about the topic as well, researching rather, that band of the market where a lot of different brands in the past, specifically also Volkswagen, especially in Europe,
00:07:38
Speaker
They used to occupy that price point. That's gone. They've all moved that market. And I feel like it's left a vacuum that all of these dealers in this region, not just the UE, but all around the region, have managed to find a Chinese brand that they brought in to fill that. Because between... it's cheaper. Yeah, but but like between just under 100 and below 200, there used to be a lot of options. And now they really aren't from other brands, but the Chinese brands have come in here and the dealers have priced them at that point where you've got a really good spread of different options and product is good.
00:08:09
Speaker
Product is very good. And if you've got no options for any alternatives and you've got good options from the Chinese, and There's a statistic I just read now that 35% of all exports from China are heading to Russia in the middle East.
00:08:23
Speaker
That's a big number. ah Different reasons, obviously, tariffs and stuff, but that means there's also an appetite to have them here. yeah And I feel like it's ah that's a price point conversation, right? And all the dealers going, well, I can't don't have any cards to sell from my legacy brands or European-American brands. Chinese brands come in and it just yeah fit in, right? Yeah.
00:08:41
Speaker
I think they are making good money because like everything, every model is quite expensive for me, like from a Chinese perspective, because the price label, the number is the same, but the currency changed from RMB to Dirac.
00:08:54
Speaker
So everything is like that, including the cars. so like for example like if you buy an mg at like 50 000 arms it would be like 50 000 r and b oh man so it's half the price but it's not only car like other products it's similar okay yeah yeah um there was the what's that 1500 horsepower crazy su7 ultimate the one that beat the porsche on the nirburgring is it uh isn't i thought it was now Now, I can check on my phone, but i don't want to pull up. But I saw it at a car show this weekend with the number plate, 1,400, 500 and something other horsepower. And that's 50,000 pounds in the UK.
00:09:30
Speaker
That's incredible value. 50,000 pounds for a car that can beat a Taycan. Turbo GT Vysak pack. I do know these things that work for the brand. That's really good value. but But are they the same price or does it feel like they're different prices here in China?
00:09:47
Speaker
You mean... So um you mentioned like the price difference and stuff, or you mentioned RMB to Durham. Is there an increase here or is it just the not used to seeing those prices in Durham's? Or are people paying more for Chinese cars here than they would pay in China or a lot more?
00:10:06
Speaker
Yeah, it's double the price. Okay, there we go. That's a good answer. Also, including European cars is more expensive here, probably because like Wolfsburg and BMW, Mercedes, they are all locally manufactured for the China market. So it's cheaper in China. And they can charge that much. I don't work here anymore. can say it. No, there are dealer markups here. They're significant. And I think it does stem a little bit from the lack of competition, right? Like oftentimes, most car companies have a single dealer here. So that's it. That's what you pay. If you can sell a Range Rover for 800, you can sell 800 a Range Rover. In terms of the dealer network in China, there's...
00:10:45
Speaker
also a like huge change because the EV companies, so most of them are like with the internet background, they are using this direct sell. Yeah. ah Model. yeah So there's no dealer. They just open their like either like showroom or experience center in a shopping mall or in city center.
00:11:07
Speaker
So that also give the traditional car makers a lot of pressure because people like this because the price is transparent. The experience is better. You do not go to different like 4S stores to say this is expensive, this is cheaper. It's all the same price. So that's another change in China.
00:11:26
Speaker
I mean, you're going to get to see the NIO house this weekend because in Abu Dhabi, it's across the street from my house. Like, I don't know if there's a dealer group behind that or whether NIO has their own direct to consumer model here, but the NIO house is, it's it's amazing. It's like, you know, we talked about that dealer experiences and stuff like that. way i talked about the Porsche Singapore. That's what it's like.
00:11:48
Speaker
But, you know, I want to flip back to the misconceptions for a second. What what do you think it is that the people here or Im Thishan, if we can single him out? That's okay. We'll talk to him. That's okay. it's like I guarantee we're more than happy to have him on afterwards. We should bring him here. Fourth chair. Yeah,
Innovation in Chinese EVs and Market Dynamics
00:12:03
Speaker
sorry. Go on. What are the things that you think people are getting here are getting wrong about about the Chinese industry, about Chinese cars, about product? Yeah. Yeah, I think before talking about misconception, i want to set up the context here. So first thing is ICE cars are totally different with electric cars because the design, the technology, the mechanism is different. So in the ICE car sector, Chinese
00:12:32
Speaker
automakers, they are still lagging behind in terms of the engine or those kind of stuff. yeah So it takes years for the Chinese manufacturers to catch up, but there's still a gap there.
00:12:42
Speaker
But then the electrification trend comes and it kind of gave the Chinese automakers, the industry an opportunity to leapfrog in the market because it's about batteries, about electric motors, about like the electric control unit is different from ICE cars. So China with this supply chain advantage, so they can produce vehicles much cheaper than their global peers. So that's why they are standing out in this EV market. But in terms of ice cars, we still buy like a lot of Western brands in China, joint venture brands, we call it.
00:13:21
Speaker
And second is this internet DNA of Chinese EV companies. Like when this electrification started, um there are three, like we say, new we call them new forces, three companies. One is NIO, another is Li Auto. Have you ever heard of it? Yeah, I have. Well, that's because we spent some time and look at it yeah. yeah and the third is uh xpeng okay i pronounced it wrong xpeng so the founder's name is xiao pong so xiao start with the x so it's xpeng ah so we've been saying it wrong yeah i mean hyundai sunday hyundai like we there's is's not the first time we get a brand or dacha i mean a french person called me out for how i pronounce peugeot like on with the empty ship but this is yeah anyway yeah so yeah So all the founders come from an Internet background. And then we have Xiaomi.
00:14:17
Speaker
Okay. Which is a pitorial like everything. Smartphones, like everything and like home appliance, those connected devices. And the Huawei, another technology company. So they kind of brought brought in this Internet mind side to the to car manufacturing. So actually, Chinese brands, they are not competing with the Western brands in terms of maybe not accurate to say driving experience, but probably like ICE cars, EV cars, the driving experience, the feeling is different, right?
00:14:48
Speaker
But they are competing more in terms of user experience. For example, they have better interior like the sofa, like the big screen, like the fridge, in-car fridge, and also the infotainment system. So Chinese... Well, speaking of that. Helen got into my car, which is a 2022 Mazda 6, which has an infotainment system from the Stone Age. It's slow. And she's just like, why is this so slow? And I'm like. My car doesn't have a color screen. yeah It's not that old. and It doesn't even have a color screen. But the focus was on things, which is a really good point you made about like,
00:15:22
Speaker
Chinese manufacturers have a background in electronic goods, and they have been able to produce better than the West, in many ways, goods. If you take that knowledge and apply it like from, what's it called, first um first first principles first principles, exactly, like, you need a a space to move people around and using that thinking on first principles and building a car with that background it would be it makes sense that you'd be able to jump so far ahead and making a car that has all these features might not drive well but how many people care about driving
00:15:56
Speaker
Actually, i won't say it's it's not driving, like the driving experience is not good. It's just because most of the people, they are not car enthusiasts. They just need a vehicle to yeah like transport them from one space to another another place. So um I cannot tell. driving experience but 99 of people who buy a car won't care yeah it's more like um another like uh living space for people so the car should be as smart as the phones and with the xiaomi it's connected to everything right yeah i read about this this is the the concept of like a mobile living room basically i think that it's literally referred to as that in some literature like i was reading about it before we got into this but Yeah, but and so then that sets the context for then some of these. Yeah, and also the LIDAR, like um autonomous driving.
00:16:47
Speaker
Chinese people, a lot of Chinese customers, they want to try this. Even though there's some like over promotion of that function and whether they not tell by the companies because it still needs people to drive. It's just assisting your driving.
00:17:03
Speaker
But it's another key areas for competition among Chinese car makers. And what's funny with that, again, is like, I feel like Western manufacturers have really leaned on brand and driving experience. And if your product is twice as expensive, brand can only get you so far. And if people really don't, aren't really car people and can't tell the difference with driving experience, your two USPs as a Western manufacturer in any market have disappeared the moment a very good product that you can build a brand from that is actually able to mostly drive itself as well
00:17:38
Speaker
any advantages disappeared and is that what we're kind of seeing in this market because i i came back here every i come back every few months and every few months i see more and more chinese brands and i see more and more people buying a second or a third one i.e they've had one they upgrade to the next one the next one is so much better and they're not all electric right there's a lot of chinese brands here that aren't selling electric cars but they are loving them Is this like a quartz moment for the car
Cultural Perceptions and Brand Strategy
00:18:05
Speaker
industry? Is this a, this kind of feels like the analogy of, you know, remember quartz watches, everyone always wanted like an automatic watch.
00:18:13
Speaker
In Switzerland, it was the big thing and they kind of just made watches. At some point, the Japanese turned around said, we can build a far more accurate, cheaper watch and destroyed the market. Cause most people just want to tell the time. Like most people want to drive around in cars. Well, they were also more accurate. It was better technology, right? So it's like the battery tech is the same thing, but yeah. But I think this, I mean, you've mentioned a few brands now, like you mentioned Li Auto and Xiaomi and Xpeng. And this is really interesting because we, I think one another thing we talked about at lunch one time was, I think things like Hong Chi and like BYD are very, very cool brands. And you're like, no, this is not what's perceived as like cool or mainstream or whatever. like there's there's ah There's a gap, right? like Every different place you go to has its own like cultural context or whatever. But what what is it? There's clearly people like Jitour and they like MG in in the UAE. what are the what are the brands What are the perceptions of the brands there? what What are the cool kids driving in China? Oh, like broad brands. Yeah.
00:19:14
Speaker
BYD is a popular brand in China, but it goes to the volume sector. So it's not as cool as new, I may say, but now they are expanding their portfolio like they have this shark right the pickup. Yeah. Yeah. And then they have other... Was it Yang Wang? Yang Wang.
00:19:38
Speaker
300 mile an hour jumping car. Yeah, the jumping car. And it does like 360s. Yeah, but I think they started to do these creative things after like Li Auto, Neo and Xpon started. Because Xpon, the founder was a tech guy. So they talk about a lot about like autonomous driving and then new is more about like community build a community of the car owners interesting yeah and then Lee Auto is more for family so they have some seven seat models and they have big screen for the passenger like on the back row and very comfortable sofa fridge my daughter loves it And it's extended range. It's not purely EV. So it to some extent, like relieve people from this range anxiety. 900 kilometers on some of those cars. 900 kilometers is longer than most people will ever drive on a range extended vehicle. I remember I looked at a Polestar 2 when I was buying my Mazda 6 and I was still commuting. I'll never stop commuting between Dubai and Abu Dhabi, it seems. But the range was 146 kilometers or something.
00:20:56
Speaker
It was like, I'm like, that's nothing. Or it was like 200 kilometers. It was barely enough, right? Like, because it's it's like 100 kilometer round trip. I'm like, if it's 200 kilometers, I need a charging station. You're not going to stop at McDonald's or whatever the thing is the the petrol station on the way there. But I just want to jump on that point because ah like going back to misconceptions, I think the biggest misconception I always feel is that Chinese copy, there's no innovation, and yeah they don't compete.
00:21:21
Speaker
And I think what's really funny with those examples of you saying that like these are different avenues and Yang Wang has a reaction from BYD to the other brands. but like We have this very outdated idea that China is a communist country, that like everything is a copy and everything is planned beforehand. everything That feels like maybe we are completely misunderstanding who China are. And they've got so far ahead of our expectations of, like what was it called, communists with Chinese like ah characteristics, that there was the old meme. um that by the time we understand what on earth that they're doing they're going to be so far ahead of everything competing against other people um like doing making things so much better than everyone else while we're still trying to figure out if they're a socialist characteristics uh this thing that thing that thing it's it's like for me that feels like the biggest misconception that China doesn't drive innovation doesn't drive technology but it sounds like
00:22:18
Speaker
Actually, there's a huge, huge emphasis on innovation recently, like especially with the, maybe you haven't heard about this, five years plan of China. So advanced manufacturing. Yeah, don't know nodded my head. I have not heard of it. It's like the government set up a five year plan for the upcoming five years. So what are the priorities for development in the country in the next five years? So advanced manufacturing innovation are very important parts elements of the new five-year plan starting from next year. And also, like you mentioned innovation, and also I think in previous episodes you mentioned the quality. So actually, I think China can produce very, very high quality products because we are not only producing clothes. Well, you make everything, actually. I think in this room, what is made in China? Your equipment, right?
00:23:15
Speaker
Yeah. just with it Well, I mean, me and Mo are the only things that make it. yeah yeah and cars are not a very are not as complicated as like high speed frame or vessels yeah so it's really depends on the price like you if you pay less you get like maybe that's the thing people don't want to pay for like people expect cheap chinese stuff because they only pay for cheap chinese stuff but there are some fantastic things think previously maybe a decades ago that's the case so it needs some time to change people's perception towards made in china But made in Japan had the same perception as well, right? For how long? And also Korea. Yeah, absolutely. I remember Korea. Yeah. ah No, I remember when the... So Hyundai and Kia are two of the biggest brands in Saudi right now. I think they're number two and three after Toyota, right? And...
00:24:02
Speaker
when they started becoming a big thing in the early 2000s, I think, in Saudi, where we were living, my dad, I told him, like, you should take a look at this Kia or your Hyundai. He absolutely would not. He's like, no, Korean, low quality, cheap, this, that. He's like, I'd rather buy used Toyota than buy brand new Kia. And I'm like, I feel like we're going through that same moment again where we've got that, like, those misconceptions and then the misconceptions and then gradually everything I think it's already happened in many cases like I think Jator already very much part of the mainstream here it is mainstream manufacturer and it's not on and to your point that's not an electric car right yeah yeah that's not that and that's what i find is interesting because it's like the koreans had to beat the rest of the world at their own game whereas china now because it's got an advantage in technology or it's in a different technology technological frame it doesn't have to it can jump ahead at this thing yeah that no one else has been able to do and everyone else is giving up right the what's it called in the eu they've actually kind of pushed back
Government's Role in China's EV Success
00:25:00
Speaker
their um ice mandate i think it's not no longer 100 electric yeah 2040 or yeah or 2030 and now it's like 90 and it's just winding back and the question sorry please i'm gonna i want to stop talking yeah it's also about uh like the system like the econ economic development system because in china like you say the system like actually the policy very consistent So it's not like in Europe or other markets, like there are a lot of negotiations back and forth there. So if the country wants to develop EV sector, then there will be a lot of efforts and resources putting in that sector. So it's not only like car manufacturing, but also like battery, like LiDAR, like chips, all those kind of things. And when you look at the batteries manufacturing, is China, Japan and Korea leading the market globally?
00:25:53
Speaker
So, yeah. Sorry, please go ahead. Oh, yeah. So it's really like different a different story. Yeah. Yeah, and I think that's where they've gotten so far ahead, right? Like that entire infrastructure, because, and is that, so they have gotten ahead, right? Like they have, they've got better EV tech, they have better autonomous tech than just about everyone. yeah And so I think, I guess this was going to tie into one of our next questions is because they have that rapid decision-making ability, right? So in a lot of this is backed by
00:26:26
Speaker
the government versus like the free market. And also like, so is that how is that how they is? Is it just that way? Or is it because the adoption rates for EVs are significantly higher in China as well than compared to the rest of the world? So are you saying is it There's government directive that has pushed the economy in a specific way and that has resulted in fantastic products that are geared towards yeah a specific direction. Whereas I feel like in the West, in in these other countries, um it's been left to the free market to a certain degree, especially with lawmakers going, OK, you have to move in this direction at some point, but we won't. give the subsidies, we won't invest in the technologies and more specifically think you even said the infrastructure to sustain it because if you've got like imagine trying to electrify Saudi Arabia
00:27:16
Speaker
it would be a very interesting task to try and fully electrify and create a grid that will allow that country or that scale to have a electric car network like China has. That takes government incentive, that takes government direction.
00:27:32
Speaker
um That's one thing I think maybe we kind of dance around the topic, but like that's what China's doing correctly. And that we're getting almost, actually it was funny, it feels like we're getting secondhand benefits from your organization. Right.
00:27:45
Speaker
Like we're benefiting from China having a clear five year plan of saying we will make these mobility appliances that will allow everyone to move freely in a network of roads and charging stations with great cars.
00:28:00
Speaker
Well, I mean, that brings us to the topic of like range anxiety, right? Like that's one of the biggest reasons that plug-in hybrids or whatever are still more popular here than EVs is because, and those are being pushed harder by most manufacturers, is because people in the UAE still have range anxiety. But China seems to have gotten around that. no, no. okay so we have more answers about that okay yeah okay that's why bid is selling really well in china because they are hybrid okay and we don't people don't have the anxiety and they go volume so it's different kind of target different kind market sectors but yeah we still have the anxiety because china is
00:28:40
Speaker
so big right and like moving between cities it's not like between dubai and abdab it takes longer especially in winter like in north china it's freezing and they will cut the ah range of the batteries so every like uh the chinese new year holiday yeah and see great migration right yeah Yeah, the great migration. We see the news that people like ah in queues, the drivers in queues for charging because it takes a long time, like right it takes like an hour hour yeah yeah to to charge the car. So in personally, I still prefer to drive an ICE car for that long travel. But that one travel almost, right? Because it's like yearly. You want to make that long trip. But sometimes if you like drive for like two or three days holiday to a nearby city, ICE cars is also more convenient because you just fill up the petrol. It's just a few minutes. But if you charge the cars, it will take longer. If you find a charger.
00:29:40
Speaker
a Charger is um easy to find on highways now in China, but it's still not as convenient as petrol. But I would say EV is a very good option as a second family car, because like in the city, especially in city like Beijing, the traffic is not good and if you drive a petrol car you and oil is like petrol is more expensive in China okay yeah so it costs a lot but if you drive like electric cars the electricity is much cheaper and China can make it electricity but it can't make oil i mean that's you know what I mean like that's genuinely a a big truth and I remember like from the five-year plan perspective I'm talking about China can produce electricity and it can electrify its own grid and support its own infrastructure that's mostly from coal
00:30:28
Speaker
yeah Yeah, it doesn't matter where it's from, you can make it. But you can't make petrol. You have to import it. So if I'm China, I'm thinking, why would I not want to build ah like an infrastructure that's built around something that I can produce and I have to rely on anyone else to to to bring it in. And like I said, from that, we're gaining the benefits of China's five-year plan. If I'm getting 35% of exports to this region, we're benefiting from your direction and a surplus of production, right?
00:30:57
Speaker
Yeah, I think like from the very beginning, you you just mentioned whether it's a policy drive or like free market. I think in the beginning, it is driven by the government. Like they give subsidy to to the car companies or to the customers.
Infrastructure and Technology Advancements
00:31:11
Speaker
But if you can buy an electric car, cheaper and the easy to get a license, because in some of the cities like Beijing, it's very, very difficult to get an ICE car license right there because they're controlling... licenses for... yeah yeah this is stuff that's very natural for you but we don't know that yeah you can here's like manual or automatic yeah yeah it's a green plate for ev okay cars and it's easier to get it so in that case people are driven and also like cheaper electricity is cheaper so people are driven to buy electric cars and some of them is because it's better infotainment and they can get ota very easily compared to traditional cars so there are different reasons that push this this trend. And also I think the Chinese companies, because they they don't have like long history, which is like also a burden yeah yeah to some extent, so they are willing to try innovations. And the customers, they are also very receptive to to those new things. So that kind of establish a system that is pushing forward the innovation. So this is what you were saying about brand only takes you so far, right? Like, because the Chinese are not, but the manufacturers are not bound by the legacies of their brands. So like, if something isn't working, they can change that overnight. It's not like, oh, this is how a Mercedes must be, or this is how a Ferrari must be.
00:32:34
Speaker
What some of these cars can become a different brand or a different, they can assume a different identity overnight. The product can change, you can repackage it. So I think that's why we see so many different brands and so many different products from them because they're iterating constantly trying to figure out what works for them. The same way we see with see with technology, with smartphones. with oh you know there's that i remember when when Nokia just flooded the market with like how many different models did they have you know like back in the like early two thousand s and stuff. but I think on the subject of range anxiety, how popular is NEO's battery swapping? Is that actually like a thing or is that just a gimmick or like?
00:33:13
Speaker
um i think In your experience. Yeah. It's getting more probably getting more popular because like It's faster. okay You just need to change the battery. and i know there are other like I think CATL is also doing something similar, like battery swapping. now But in the early days, people, I don't think that's a mainstream thing.
00:33:35
Speaker
um It's just different different like options for the customer. But I think by the end of day, it depends on the charging technology, depending on the batteries. So to make like charging as convenient as filling up the petrol, like in actually the charging industry. The charging sector is another very competitive sector in China. i so Are there like brands of charging, like other petrol stations, that are charging stations that have like there are different operators ah okay there we go that's another another cool thing okay so like uh the national grade uh the electricity company they run some like charging points um probably like in parking public parking laws those kind of stuff and also like uh the petrol stations but there are also like petrol companies like shell is partnering with byd in shenzhen probably for like charging stations and also wolfsbagen they have this
00:34:33
Speaker
charging joint venture with some chinese partners it's called cams so it's for like their electric cars like id like all the only that cars they are also open to other brands now i think but from the beginning they want to provide a charging network for their cars because they offer premium uh like services so uh you can they have an app you can check the app to see where is the the free charging points and then they are always in like shopping malls or city centers, like good locations and you can find coffee shop or like washrooms nearby. So they charge more, more expensive. And also BMW and Mercedes, they started another charging joint venture last year.
00:35:17
Speaker
So there are a lot of operators like players in this sector as well. competition Competition, which is something I feel like the misconception from our side, that there isn't competition. Clearly there is. And a lot of a huge competition there. Yeah. i think we'll see that here to a certain extent as well, right? like Because like Adnok already has charging stations. You have to pay for to use those charging stations. like just like going to one. Well, it is going to one of their gas stations, and except there'll be a few charging stations. The newer the Adnok station is, the more of these they'll have. but um yeah know it's interesting because and i think neo is bringing the the swappable batteries to the uae as well now if it hasn't already happened um i need to i am behind on this information but are those i mean i guess i wonder if those batteries are swappable between brands or it's only you have to go to the new center now it's only neo i think yeah but in terms of charging like uh companies are discussing this ultra fast charging so maybe finished charging a couple of minutes but it will take time but if like by the end of day if that is achievable then why not buying an ev and also batteries like catl like battery companies they are developing the solid state battery we've been talking about a long time yeah yeah so it really depends on technology
00:36:40
Speaker
So I'm going to switch gears a little bit.
Brand Perceptions and Strategies in China
00:36:43
Speaker
um There's no gears in electric cars, man. Oh, yeah, that's true. We can't switch gears. um But um you said you're not super into cars and driving yourself. But you told me in China you actually had a reasonably cool car. Because of my husband. but So what were you driving in China? Audi A6. So you had the Audi A6. Which Audi? The A6. No, there's two Audis now, right? this This is where I was going with this conversation. okay yeah yeah So in China, there's Audi.
00:37:15
Speaker
The four rings. Yeah. And then there's Audi. so The phonetic brand, AUDI. Yeah. Which is a separate brand from the four ring brand. Yeah, actually all the the four rings, they have both ICE and EVs. yeah But they created this new brand, AUDI, for their, it's a new model in partnership with ah the Shanghai, in the Shanghai Joint Venture, Shanghai Automotive Group. So they targeted younger generation. Psyche, right?
00:37:47
Speaker
yeah Yeah, yeah, yeah. So like historically in China, because I know some a little bit about Audi and the Volkswagen because it's manufactured in my in my city. So Audi was perceived as a premium car, but linked to the image of like government guys because it used to be cars used by some government officials the limos yeah yeah yeah and then um that's changed but it kind of gave them a brand image that they are not like um cool and hip and young oh yeah yeah yeah so they tried to uh switch that image recently and i think they are trying the same name yeah i still i made you do i i'm not i'm not arguing with you it's fine but like it's an interesting decision to use the same name yeah but but actually it's a it's good car like even the ice models and my husband likes it and is like more uh how to say that is the the price is better than bmw and mercedes yeah
00:38:50
Speaker
And you were waiting for a particular car to launch here, if I recall correctly. There was a car you had your eye on if it makes its way to the to the UAE market. It hasn't officially launched yet. You're waiting for a car. yeah Yeah. Which Was it was the Xiaomi?
00:39:05
Speaker
The SU7. You said that was really cool. The Xiaomi electric sedan. ah Probably. yeah but that's But that's the one I saw this weekend. Xiaomi sells really, really well in China. So um it seems they they are just trying to fill up their like the the demand in China domestically first and then go to other markets. but that's the car that jim farley drove the the ceo of ford he drove one for six months in the us s and said we're gonna lose he said it was so good that nothing we're gonna build anytime soon can compete with the su7 su7 right yeah yeah yeah
00:39:43
Speaker
but it's how yeah It's interesting to hear that like Neo is about community though, right? Because that's not something that had registered for me before. i think it's also like our bad job, communications people, of like not trying to take a truth that exists in the Chinese market and communicate that. Whereas maybe just go, maybe like the the ads I've seen here have just been very, this is the car, this is the brand, this is the price, this is the images of it. There's no building of like a...
00:40:13
Speaker
but Yeah, think they need to do something here if they want to do something similar, like compare with China. Because in China, like all the company, the team, they're familiar with what the Chinese customers like. So they kind of build ah ah build up the community, then they have regular activities and the sense of belonging to the brand. But here, the customers are different. So the Chinese companies, they need to figure out a way how to do this here, if they want to keep the same brand image here. But G-Tour have um like owners groups now, right? Yeah, they have owners groups, they do the off-road events. i think they've been I think Tank as well. So Great Wall Motors and Tank, they've been doing something similar. Actually, Tank is a popular, like Great Wall Motor yeah is a pretty good brand in China. okay Also, because they they started with ICE cars. So our first car is a Great Wall Motor car. OK. Yeah.
00:41:02
Speaker
And then they started to do like electric cars, but their tank is pretty well. It's a tank 700. We to drive it in China. So it's a good off road car. Does that have the V8 or the V6? I don't think China does V8s. There's not many V8s that come out of China, right? It's a lot of more smaller displacement engines.
00:41:21
Speaker
But yeah, but the point i was making about NIO being like the community brand is if you've ever read the actual like European reviews of like the NIO EP9 and some of them is that they actually handle well. They drive well. Like as in if you're an enthusiast, they're actually not.
00:41:34
Speaker
they're They're pretty good fun cars to drive. That's my broad question I have as well. I have a ah currently work in motorsports um and I think me and Mo can both proudly say we're car enthusiasts and that's a driving enthusiast really. um I watched something recently quite fun. Top Gear probably is the most famous like yeah car show in the world.
00:41:55
Speaker
And speaking specifically when I say in the world, ah three Chinese car um journalists invited Richard Hammond to China. I'll send it to you. I don't know if you see it. To China to do a not Top Gear episode where they had the, what's it called? The ah yeah Yang Wang supercar. They had the Mike Stroh and they had something else as well. And they had him meeting Chinese car enthusiasts who like are who knew top gear so my big question is does is that a thing is like is motorsports popular in china is car driving enthusiasm and popular because my perception has always been no but and and i think empty sham at the same point of like it's a market that never had that background they don't get performance cars are we wrong
00:42:44
Speaker
Yeah, you are wrong. Cool. I'm glad. This is a good platform. Mic drop. This is the snippet for like Instagram or YouTube. You are wrong. Until you said it now. Keep watching, by the way, because we're posting this. Yeah. Yeah, i think actually in every market, there will be car enthusiasts. It's just they are certain group of people. Weirdos like us.
00:43:03
Speaker
yeah probably i don't know them i know there are currently yes and they they resemble the car by themselves yeah yeah they assemble and service and build modify yeah yeah yeah of course there are people ah yeah and also i think xiaomi is trying to prove is like enthusiasts well they sponsored the nurberg ring if you watch any video of the nurberg ring now that's amazing yeah die oh no way yes they set some records there yeah that's that's the car so that's what I was saying they beat the Porsche Taycan it's a bit funny with tires and whatever but the headline is they beat the Porsche Taycan around the Nürburgring and that's Porsche's background like literally Manti is there yeah and when you drive it and when you see any video of the Nürburgring the one of the most famous parts is the foxhole which is like 300 or 250 kilometers an hour downhill and just before you go downhill there's a big banner saying Xiaomi su7 ultimate and it's there every single i've but and i've driven it recently and you see it there and you're like the chinese are here and yeah and and and i think there's also the that lotus type car lightweight electric or lotus as well that's being that way That's true. yeah But the the one that's actually more like an actual Lotus yeah where it's like super lightweight, stripped out. The electric motors are in the middle for better weight balance. Wheels Boy drove it. there was another There's another reviewer that's actually, and they've all ordered them as well. All these like expats living in China are ordering this particular performance car. And it's now they're now backed by Huawei.
00:44:34
Speaker
So yeah, initially it was just like a startup of some guy building a sports car in his garage. I've forgotten the name unfortunately, but, um, yeah, listed in New York, I i think Lotus. No, not Lotus. This was ah a Chinese brand. It was a purely Chinese startup. They wanted to build. So Lotus is famous for building a Lotus style car, like super lightweight, super small sports car. Okay. and this Chinese guy that was a really big car because he started building it himself. And eventually he got enough interest that Huawei ended up backing him.
Tech Companies in the Automotive Industry
00:45:02
Speaker
So yeah ya Huawei has been like hugely involved in car manufacturing. It's not manufacturing, and like car making recently. So they mostly partner with like some brands. So they have st several like cooperation models. So for some collaboration, they provide the intelligent systems and some of them they involve in R&D. So different level of cooperation, but they are not manufacturing cars. but that's ah That's the weird one, right? but Like you can be a brand in cars, but you don't build them all yourself.
00:45:32
Speaker
Yeah, that's different thinking. you know what I mean? Like, but that like that almost feels like the knowledge you get from consumer appliances applying that thinking to a a place that has never been done before. Car building. Yeah, it's it's a new world and it's worked.
00:45:48
Speaker
Actually, every company, like internet company, they're trying to get into the car sector. But why? Because it's like, it's the worst industry. Genuinely, no, I mean it. Like, if you if you look um look. This is a car podcast. It's fine. it's my life This is my life. I've spent nearly 15 years working this. Like, what I mean specifically is look at Nissan.
00:46:08
Speaker
um Look at Apple. Nissan has one of the greatest histories in motorsports in the world, right? Heritage, it had good products. It can't win. It's just always just seemed to be for the last like 20 years, it had to get you know bailed out. Jaguar. All of these different brands.
00:46:26
Speaker
Cars are hard. Cars are really, really hard. Like Apple couldn't figure out how to make a car. like you want talk about like And then Nissan offered to build it for them and they said no. But but it's but my point my larger point is, why?
00:46:40
Speaker
Why go into, is it prestige? Is it just, like, mobility is important, but it's just really weird. If all these very successful, is it almost like a challenge of, um we can we can dominate the electronic space and build things that no one else can do and beat everybody. We're going to beat them in the hardest industry as well, cars, because the margins are so small. everything's it's It's insane. like I wonder why why do you think that it's such a free thing? Probably every industry is difficult in China. So um like for the Internet companies, they still need to get new revenue sources.
Chinese Innovation and Global Perceptions
00:47:17
Speaker
So car is um electric cars are emerging market, I would say. And also in China, you see the the change of players.
00:47:26
Speaker
like the german car makers they are still there like toyota is still there but for the u.s brands and also some kreer brands they are gradually fading out from the market lincoln lincoln used to be a chinese brand only now right they're gone buick buick yeah oh buick yeah and also like a jeep and other like brands like mazda like So we need to settle into bringing this into a closed mode. But I will add one point to that. I think, and this is my, just I'm guessing here, but I saw the review for the XU7 Xiaomi, the SUV that they do, right? And you can bring in, like, you can buy multiple modules that work inside your house, but can also be attached to the car. So thing is, like Helen said, it's a natural extension of where can- Of ecosystem. So you can, not only can you now sell them a car, you can now sell them all the other things that go with the car. You can own the entire ecosystem. Like you said, it's not just about what's in your home, what's on your wrist, what's in your hands. It's also what you're driving. It's everywhere you go now. Yeah. Some of the brands like NIO, they were also talking about doing mobile
00:48:35
Speaker
Oh, for flipping it the other way around, starting in cars and then going to phones. Yeah, so it's a combined system ecosystem. And going back to like what I was trying to say with why cars, Apple is the king, right? One of the kings of an ecosystem.
00:48:51
Speaker
And they just said they couldn't. It feels like there is this mentality and there is a way of working in China that works better than traditional companies can figure out.
00:49:03
Speaker
like again Dyson tried it I mean okay fine Dyson's not Apple but like all of these dig different big companies have tried to get into cars and they couldn't do it um but the the Chinese have and they are they're here they're literally I i drove Nashik's I'd rode and they are here um I don't know if I probably is the supply chain advantage like through years because even though like China is not leading us but all those cars are produced in China I have an example, by the way, an anecdote. So this was from somebody, I think he worked at Bosch or one of these third party suppliers. They basically build a lot of the cars anyway for the legacy European manufacturers. And they realized that the China is going to be a big market for them and they need to learn how to do business in China. So they went to China. Bosch turned up again like a Goliath, a king of car making. They went to a Chinese brand and said, we would love to work with you. we want to collaborate with you. We can't be enemies. We need to be friends. Bosch as a brand can or a company can help ah shorten production.
Reflections and Closing Thoughts
00:50:05
Speaker
It can help the development of a car go from five years to three years. And they're like, wow. the Chinese representative from the car company said thank you very much I don't think we're interested I'll explain why the car that we picked you up in at the airport that drove you here was developed in one and a half years yeah like 18 months is the time frame and then they just went boom yeah Crap. And that's how they can iterate. Yeah. That's why Tesla built up this gigafactory in Shanghai. It makes better quality and it's better efficiency. Better it's it's better quality. Better quality. The Chinese century is here, man. Yeah. yeah So i mean it yeah like you were trying to say before I cut you off, we do have to start bringing this to a close. So any Helen, is there anything else that you would like to add here? Any other points that you think we've missed out on?
00:50:53
Speaker
I think like talking about the industry is really a long conversation. A lot of topics can be discussed, but we've addressed a lot yeah today. Yeah, I think we learned a lot. I think we've learned more from this particular podcast than the others. The others we were just like, oh, yeah, manuals, man. Yeah, but so yeah um I go back to like a book I was reading at the moment from Dan Wang, and it's about I need to remember what it's called.
00:51:19
Speaker
Give me a second. This won't actually take long. We don't have too a long. Breakneck. There we go. And it was about the difference between the Western style of manufacturing or governance, actually, compared to the Chinese one and the theory that he has. And this is a man that's worked both in in Shanghai and what's the sister city to Hong Kong? Xinjiang. Xinjiang. So he's an an engineer, a doctor worked in both these places, and he's worked in California. And he was talking about how on earth is it that in California and San Francisco, the hub of like innovation, it's so old and nothing works. Whereas when you land in Shanghai, there is like the most incredible infrastructure you've ever seen in your world in in the world, and everything works and stuff. And his idea was that...
00:52:05
Speaker
In the West, all of these different car brands and all the legislation around it as well is all led from a legal perspective. These are lawyers. Most of these countries and companies are run by lawyers. In China, the president is an engineer.
00:52:20
Speaker
The Politburo is engineers. They have an engineering mindset rather than a legal mindset. And in that way, when you decide to say we will... we was a country for the next five years will develop an infrastructure that has cars as a part of it for mobility that's what you get and like i said i feel like as maybe a market that doesn't have um maybe the gcc uh manufacturing here we are already gaining the benefit from china's direction and innovation and ability to to set a direction
00:52:54
Speaker
Also, I think education, like from policy perspective, education is very important. As opposed to in Europe. Something similar to your example, like when the CATL's chairman talked about why CATL is leading the global battery market, it's because China has a lot of talents, graduates, learning, studying chemistry. compared to other people. It was the thing I said about Kevin some of Kevin Kelly's books have been made part of the curriculum in certain schools and universities and they've been translated to China. He's been invited several. Kevin Kelly is the founder of Wired. Okay, there we go. I'm drawing a blank. I'm not cool enough. And to that point, by the way, I remember there being, because this feels like a larger topic,
00:53:40
Speaker
The biggest industry in the world is finance. It just is. It's where most clever kids who go to university want to end up because they get the most money. I heard that in China there is a limit to the salary of a person who can work in finance.
00:53:53
Speaker
But there isn't the same limit to a person who can work in the sciences. Now what that does is create an infinite like a structure that incentivizes the smartest people in your economy to go into technology and innovation rather than finance. And it feels like that's one of the big reasons that we've got such innovations coming out of a market, whereas what we're getting in Europe is um really clever laws that are built on top of something else in the 2030 we're going to move to this and do this which is a legal system and a lot of money whether it has nowhere else to go apart from putting into AI whereas a car and an infrastructure is a thing my rent's over do we want to wrap this up yeah I think I'm worried making me feel like I've done the wrong degree twice now um uh helen thank you so much for being so generous with your time and bringing like just so much new and like just information that i don't think we could have gotten anywhere else so um choking on that i'm so emotional yeah but um but yeah no uh thank you for doing that anwar so good to see you again it is nice never see you again yeah do we remember any of our handles do we know our email address or anything i think look for golfspec podcast on everything that's the way we're doing it yeah and thank you thank you so much and if anyone wants to find helen or myself you can find us at fgs uh our dubai office we can put the link in somewhere but yeah i think we're good thank you very much thank you so much it's my pleasure thank you and thank you man