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BAIC Motor 2020 Strategies 北京汽车2015~2020企业战略 Plans Announcement of BAIC Motor 2020 Strategies English version is for reference only, and please be subject to the Chinese version. BAIC Motor 2020 strategic objectives: “π” Plans BAIC Motor 3 —Top 3 proprietary brand BEIJING BENZ 1 —Top 1 luxury brand Plans =3.14… Beijing Hyundai 4 —Top 4 joint venture brand 2 “π” Plans——3 Dual-brand Strategy：Senova + Wevan R&D layout：Beijing base + 3M Sales and service Strategy：3F .14 Manufacturing and procurement 3 strategy: 3H Top 3 proprietary brand New technology strategy ：SELL Plan Implementation steps of strategic objectives 3 Proprietary Brand 2020 Strategic Objectives — TOP 3 among its competitors Medium to long-term strategic objective: to increase brand competitiveness and to be among the top 3 domestic brands with the full backing of product competitiveness Brand competitiveness enhancement : Brand Production scale expansion : Comprehensive 1 health level and brand premium 2 quantity and quality enhancement TOP10 proprietary brand in 2020 1 ······ TOP10 proprietary brand in 2015 2 ······ 1 SGMW 3 BAIC Motor 2 Changan 4 ······ 3 Greatwall Motor 5 ······ 4 Geely 6 ······ 5 Chery 7 ······ 6 BYD 8 ······ 7 JAC 9 ······ 8 BAIC Motor 10 ······ 9 Dongfeng Liuqi 10 FAW 4 Dual-brand strategy : Senova + Wevan Persevering for Shakes the world and For theperformance performance thriving the future persistance Brand positioning ： medium to high-end passenger Brand positioning: economy passenger vehicle brand, vehicle brand, including sedans, city SUVs, MPVs and including mini vehicles, Mini MPVs, economy sedans off-road passenger vehicles. and economy SUVs Brand properties ： powerful, ultra safe, innovative Brand properties: durable and pleasant technology and hard-core spirit. Core values: endeavour to develop “high-quality and Core values ： provide a sense of control and performance experience on the road of an aggressive life reliable” mini vehicles to lead the future of happiness by leveraging on the high performance vehicles developed and build a happy and wonderful life with the users utilising the European advanced vehicle manufacturing technology and coupled with the lineage and hard-core genes of BAIC’s SUV Family for the masters of the house and the aggressive, successful pillars of the community highlighting its capabilities and for the hard-core spirit BAIC Motor practitioners highlighting its professional technology and spirit of exploration 5 R&D layout ： Beijing base + 3M BAIC Motor industry R&D base + 3M（MB-tech / META / Michigan） to build BAIC Motor’s globalised R&D system BAIC Motor industry R&D base is the strategic platform of innovation Michigan and proprietary brand Chassis advanced R&D of BAIC Group technology R&D comprising development centres Active safety technology R&D M of vehicle integration, new technologies and Engine active noise tech control (ANC) new resources Engine active noise META BAIC 51% control (ANC) MBtech49% Development of more efficient and energy-saving engine products MB-tech （德奔） Optimisation and upgrade of Responsible for the research of existing engines BAIC Motor’s high-end vehicles and the development of BAIC Analysis and testing of engine Motor’s high-end vehicle platform competitive products and models Development and certification Implementation of the platform and of hybrid power systems subject of the comprehensive technology cooperation with Daimler 6 Sales and service strategy：3F Fast learn Fast arrive Fast help 快速了解客户 快速到达客户 快速服务客户 1 To promptly understand the 1 Logistic arrive. 1 Vehicle condition monitoring customers by leveraging on e- To optimise logistic network and implement and early warning. commerce and big data. BTO (estimated order production and lean To conduct real-time monitoring of vehicle Fully understand the customer reach, management to increase logistic efficiency) condition based on big data to make early consumption and experience habits and warning to auto owners to prevent accidents conduct research thereon through both e- early commerce and traditional channels 2 To structure an R&D and 2 Information arrive. 2 Credit assistance. communication platform with To make use of new and existing media To develop innovative online financing distributors by capitalising on platforms including auto exhibitions, WeChat models via e-commerce product seminars. and mobile apps and new auto launch releases via the e-commerce platform 3 After-sales assistance (repair and maintenance) 3 To listen to the voice of 3 Service arrive. 2016 : structure a proprietary customers by leveraging on To provide speedy after-sales service: speedy e-commerce platform traditional researches. appointment, maintenance, support and 2017 : provide a series of extended services 10,000 quantitative researches, over 100 handling of customer complaints 2018~2020 : enhance commercial value seminars and 100 user interviews Logistic arrive 7 Manufacturing and procurement strategy：3H 高品质 高效率 高竞争力 HIGH QUALITY HIGH EFFICIENCY HIGH COMPETENCE Through three stages of development, the design, To develop a flexible, efficient and cost effective To achieve highly competitive cost control manufacturing and quality of the vehicles and parts production system taking a market-oriented approach by capitalising on a high level of resource are reformed, providing a solid foundation of quality and focusing on the elements of quality, lean sharing and ongoing optimisation of to achieve the strategic objectives production, automation, segmentation and flexible procedures across the whole value chain manufacturing system from R&D to production Leading quality 2020 Stable stage Development cycle: 20 months Resource sharing Cost reduction: 25% No. of manpowers per • Strengthen the internal cooperation of 2020 individual vehicle: 37 manufacturing resources Order execution: 97% Quality operations 2018 • Enhance the external integration of R&D Growth stage Development cycle: 22 resources months 2018 Cost reduction: 15% Process optimisation No. of manpowers per • Promote the standardisation transformation of 2015 individual vehicle: 39.5 Quality reform Order execution: 95% workflow Base stage • Accelerate the IT upgrade of data decision- Development cycle: 25 making months By 2020, AUDIT will decrease by 24%/37%; CS1000 will decrease by 2016 Cost reduction: 10% 66%/40%; quality improvement system (“QIS”) will increase by No. of manpowers per R&D 23%; initial quality survey (“IQS”) will increase by 36%/19%; individual vehicle: 44 Manufacturing ranking No.1 among the proprietary brands Order execution: 90% 8 New technology strategy：SELL Plan Smart Electrical Smart-car S Electric-vehicle E • • Internet of vehicles: introduce Nova-link brand which covers major functions including Pure electric: launch of pure electric A class sedan C50EB in 2015; full-scale mobile connect, real-time traffic conditions, long-range navigation setting, APP store, WIFI electrification of vehicles of A class or below by 2020 (mileage range of ≥200km) • hotspots, long-range control and security as a service Hybrid: 12VBSG technology full coverage and gradual promotion of 48V micro • Internet of vehicles: introduce Nova-link brand which covers major functions including hybrid vehicles; active industrialisation of extended range and plug-in hybrid mobile connect, real-time traffic conditions, long-range navigation setting, APP store, WIFI products to achieve steady transition from traditional vehicles to new energy hotspots, long-range control and security as a service vehicles • Internet of vehicles: introduce Nova-link brand which covers major functions including mobile connect, real-time traffic conditions, long-range navigation setting, APP store, WIFI hotspots, long-range control and security as a service • Power train advanced technology • Light-weight design: “SFE parametric modelling” to achieve optimised design of - Engine: apply advanced technologies including aluminium casting tank, fuel stratified the vehicle body structure injection, Miller cycle, variable valve lift and cold EGR technology; support idle stop- • Light-weight materials: reasonable application of materials including dead-hard start and 48V micro hybrid functions steel, aluminium magnesium alloy and carbon fibre - Transmission: multi-speed and wide variable speed ratio DCT and CVT high • Light-weight technology: technology research and application of laser welding, efficiency transmission thermoforming and warm forming • Vehicle conventional fuel-saving measures: technologies including EPS, high efficiency air conditioning, optimised outlook design that reduces drag coefficient, smart grille, low rolling resistance and electric vacuum pump • Comply with the PRC Phase IV fuel consumption regulation and China VI emission regulation Lighten L Low-carbon L Less-emission Light-weight 9 Implementation steps of strategic objectives 2019~2020 2017~2018 Strive with full force and lock in the leading position of its own brands by 2015~2016 With respect to the layout of leveraging on its production scale and Generation 2 products, capitalise on brand competitiveness BEIJING BENZ’s frontline platform Record profits in all segments Complete the Generation 1 product and high-performance power train Focus on 3~4 vehicle platforms or 1~2 launch to build the foundation for technology to consolidate the leading segment platforms to form the competitive position of its proprietary production scale and channel sustainable product development capabilities to increase capacity brands Continue to enhance brand
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