1. © Copyright EBS Business School and China Europe International Business School
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China Automotive Industry: Scenario 2022
Focus: The Premium Car Segment
A joint research project of
Automotive Institute for Management (AIM), EBS Business School,
and CEIBS Center for Automotive Research (CCAR),
China Europe International Business School (CEIBS).
Executive Summary
What? A strategic foresight study utilizing expert-based scenario development
methodology to analyze the political, economic, socio-cultural and infrastructure
environment of the automotive industries premium segment in China in 2022 and its
implications for strategic planning in the automotive sector. The study is part of the
Industry Intelligence Research Program following the approach of ‘LOOKING INTO THE
MINDS OF LOCAL EXPERTS’ - integrating the insights of more than 80 local industry
experts from the premium automotive industry in China.
The report China Premium Automotive Industry: Scenario 2022 extensively
elaborates on how China’s premium automotive industry might look like and
demonstrates an analysis process how to evaluate potential (re)actions improving
strategic flexibility for the future of China’s premium automotive industry in 2022.
This executive summary introduces the study’s background and objective, illustrates
basic steps of the specifically developed methodology, depicts selected results and
explains how managers can integrate the report into their firm’s strategic planning for
the Chinese market.
Why? Today, China is the largest automotive market in the world. The country has
experienced impressive growth rates over the past decades. Despite current single-
digit growth rates of annual new car sales, the premium segment continues to
experience impressive growth rates and is already the second biggest premium car
market in the world.1 However, the Chinese automotive market is not only expected to
grow further but also to undergo substantial changes which will induce new challenges
for automotive companies operating in China. These challenges include an ongoing
mobilization of more than 1bn. people, unstoppable urbanization, changing
demographics as well as consumer requirements, and rising environmental
considerations. Inevitably, China’s still growing relevance for the global automotive
industry requires decision makers to constantly re-think or at least re-evaluate their
strategies for the Chinese market in order to benefit also in the future from the
tremendous growth potentials. As stated by one of our study participants: “it’s no doubt
that the biggest automotive market will become one of the drivers on international level”.
For Whom? The “Scenario 2022” report is designed to support senior executives and corporate
strategy managers in the development and/or re-evaluation of their current plans for
China’s premium automotive industry: Be prepared for the future of China, “the central
kingdom” (Chinese: Zhōngguó) of the global automotive industry.
1 In this study, the automotive premium segment refers to passenger vehicles with a purchase price > 250k RMB (e.g.
Buick Lacrosse, VW Passat, Audi A6, Mercedes-Benz E Class).

2. © Copyright EBS Business School and China Europe International Business School
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How? The Automotive Institute for Management (AIM), EBS Business School, and the CEIBS
Center for Automotive Research (CCAR), China Europe International Business School
(CEIBS), have initiated an annual Industry Intelligence Research Program to support
decision makers and managers of China’s automotive industry and provide a better
understanding about how the industry might develop and what it means for their
companies. The research program integrates a web-based expert panel approach
and workshop sessions among automotive experts in China to jointly assess the
future of China’s premium automotive industry.
Process Graph 1: The China Automotive Industry Intelligence Research Focus and Process
Understanding China’s
Automotive Industry
STEP 1: Online real-time Delphi study with local industry
experts to gather distinct perspectives on ‘hot topics’.
STEP 2: Expert Workshop to develop
scenarios of the future political, socio-
cultural, economic and technological
infrastructure environment for the
automotive industry in China.
STEP 3: Expert Workshop
to evaluate the impact of future institutional
changes on firms’ local operations
of the future automotive industry
in China.
STEP 2: Expert Workshop to develop
scenarios of the future political, socio-
cultural, economic and technological
infrastructure environment for the
automotive industry in China.
STEP 3: Expert Workshop
to evaluate the impact of future institutional
changes on firms’ local operations
of the future automotive industry
in China.
Which changes might occur in the
institutional environment?
How changes might interrelate and
what does it mean for a firm?
Challenge 1:
Uncertainty
about future institutional developments
Challenge 2:
Ambiguity about
institutional interdependences
Delphi Study
Scenario
Workshop
Step 1: The participating industry experts access an online real-time Delphi software
to evaluate a combination of industry environment, macro-perspective and value-chain
projections with respect to their probability of occurrence and impact on the industry.
During the online interaction, the participating experts are also requested to explain
the reasons for a high/low assessment of a projection and can review their peers’
arguments/ratings anonymously to re-asses their initial estimates for each projection.
Step 2: Industry experts develop in the first workshop on CEIBS campus scenarios
about the business environment of China’s automotive industry in 2022. The
workshop integrates the projections of Step 1 and elaborates scenarios from four
different perspectives (PEST):
 The political environment examines regulations of the Chinese Government put into
effect which might support further growth or constrain the industry through the
formation of potential hindrances.
 The economic perspective examines which players (e.g. OEMs/Suppliers) will
dominate the value chain and how the major characteristics of their business
relationships might look like.
 The socio-cultural environment examines on the one hand purchasing criteria of
customers per se and on the other hand trends and expectations of the society at
large of particular interest for the automotive industry.
 The technological infrastructure perspective examines “soft” (e.g. knowledge) and
“hard” (e.g. infrastructure) factors that are most relevant for the industry.

3. © Copyright EBS Business School and China Europe International Business School
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Scenario
Matrix
Approach
Graph 2: Basic Scenario Matrix for Industry Environment Analysis
Scenario
Content
Each scenario matrix is framed by two industry environment projections determined
by their respective occurrence and non-occurrence evaluating in detail the
consequences for the industry’s major stakeholders such as customers, suppliers,
OEMs, the Government of China and China’s society at large.
Industry
Dynamics
Workshop
Step 3: Own assessment in a second workshop on individual firm level:
 How examined projections for China’s automotive industry from the Delphi study
might interrelate with each other to get a better understanding about underlying
drivers and cause-effect relationships among the institutions of China’s automotive
industry.
 How the developed scenarios or particular projections of China’s automotive
industry affect a firm’s local operations on functional level (e.g. Research and
Development, Sourcing and Procurement, Manufacturing and Production, Human
Resources, Marketing and Distribution).
Graph 3: The Institutions-Resources Matrix to elaborate Functional Strategies
Organizational
(Structures, Processes,
Leadership Style etc.)
Technological
(IP Rights, Production
Technologies, Tacit
Knowledge etc.)
Human
Resources
(Executives, Employees
etc.)
Physical Assets
(Plants, Machinery etc.)
Industry
Environment
Relationships
(within company,
functions, customer or
suppliers etc.)
Effects on department’s resources

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Selected Key
Results from
Delphi Study
High level of uncertainty regarding future development
In total, 5 out of the 19 examined projections (26 %) resulted in moderate consensus
among the participating industry experts, while 14 of the projections were still
controversially discussed at the closure of the study yielding an average probability of
occurrence of 51 % across all projections. The future of China’s automotive premium
segment is difficult to predict - affirming the relevance of the study for both senior
executives and further investigations.
Selected projections all highly relevant for China’s automotive industry
The average impact of the projections was rated as 3,6 and the minimum reported
impact was 3,2 (Scale 1-5): All projections are of high interest to managers and
decision-makers of China’s automotive premium segment.
The future industry environment: a similar but challenging picture
The industry environment projections show that the political, economic, socio-cultural
and technological infrastructure environment of China’s automotive industry will not
change dramatically until 2022 – but some relevant changes might occur.
Graph 4: Quantitative Results of Macro-Perspective & Industry Environment Projections
Dimension Macro-Perspective Projections Probability Consensus Impact
Macro
Perspective
“Global Chinese OEMS”: In 2022, Chinese OEMs achieve 25% of their annual cars
sales in developing countries (e.g. Brazil, Russia, Africa).
51%
40
Very Strong
Dissent
3,5
“Mainstream Premium”: In 2022, the premium segment accounts for more than 15%
of annual new car registrations in China.
59%
32,5
Strong
Dissent
3,7
“Remote Areas”: In 2022, more than 50% of new premium cars in China are sold in
tier 3-4 cities and rural areas.
44%
30
Strong
Dissent
3,5
Dimension Macro-Perspective Projections Probability Consensus Impact
Macro
Perspective
“Global Chinese OEMS”: In 2022, Chinese OEMs achieve 25% of their annual cars
sales in developing countries (e.g. Brazil, Russia, Africa).
51%
40
Very Strong
Dissent
3,5
“Mainstream Premium”: In 2022, the premium segment accounts for more than 15%
of annual new car registrations in China.
59%
32,5
Strong
Dissent
3,7
“Remote Areas”: In 2022, more than 50% of new premium cars in China are sold in
tier 3-4 cities and rural areas.
44%
30
Strong
Dissent
3,5
Dimension Industry Environment Projections Probability Consensus Impact
Political
“Vehicle Fleets”: In 2022, the Government of China and State-Owned-Enterprises
have to use exclusively Chinese OEMs’ brands in their vehicle fleets.
52%
43,8
Very Strong
Dissent
3,5
“Access Restrictions”: In 2022, registration of new passenger cars and entry in tier1-
3 cities in China is only eligible to passenger cars with displacement volume lower than
2.0 liters.
41%
38,8
Strong
Dissent
3,8
Economic
“Profit Margins“: In 2022, OEMs’ profit margins in China’s premium segment have
decreased by more than 50% compared to the profit margins in 2011.
60%
30
Strong
Dissent
3,7
“Dealership Consolidation”: In 2022, the top 25 dealership groups in China have a
combined market share of more than 60% of annual new car sales.
63%
25
Moderate
Dissent
3,6
Socio-
Cultural
“National Pride”: In 2022, China’s young generation is strongly driven by national
pride considerations in their lifestyle and consumption behavior including premium car
purchases.
43%
33,8
Strong
Dissent
3,6
“Interior Design”: In 2022, the brand perception of premium cars is significantly more
driven by a car’s interior design and features (e.g. cockpit ambience, rear space, center
console) than a car’s exterior design (e.g. front/rear lights, radiator grill).
50%
20
Moderate
Consensus
3,2
(Hard/Soft)
Infra-
structure
“Corporate Universities”: In 2022, each OEM runs own corporate universities and
training centers (vocational, service, and design) to attract, develop and retain sufficient
numbers of well-qualified employees in China.
58%
35
Strong
Dissent
3,5
“Public Transport”: In 2022, public transportation is perceived as a convenient
alternative mode of transportation by more than 90% of premium car owners in tier1-3
cities in China.
49%
40
Very Strong
Dissent
3,7
Dimension Industry Environment Projections Probability Consensus Impact
Political
“Vehicle Fleets”: In 2022, the Government of China and State-Owned-Enterprises
have to use exclusively Chinese OEMs’ brands in their vehicle fleets.
52%
43,8
Very Strong
Dissent
3,5
“Access Restrictions”: In 2022, registration of new passenger cars and entry in tier1-
3 cities in China is only eligible to passenger cars with displacement volume lower than
2.0 liters.
41%
38,8
Strong
Dissent
3,8
Economic
“Profit Margins“: In 2022, OEMs’ profit margins in China’s premium segment have
decreased by more than 50% compared to the profit margins in 2011.
60%
30
Strong
Dissent
3,7
“Dealership Consolidation”: In 2022, the top 25 dealership groups in China have a
combined market share of more than 60% of annual new car sales.
63%
25
Moderate
Dissent
3,6
Socio-
Cultural
“National Pride”: In 2022, China’s young generation is strongly driven by national
pride considerations in their lifestyle and consumption behavior including premium car
purchases.
43%
33,8
Strong
Dissent
3,6
“Interior Design”: In 2022, the brand perception of premium cars is significantly more
driven by a car’s interior design and features (e.g. cockpit ambience, rear space, center
console) than a car’s exterior design (e.g. front/rear lights, radiator grill).
50%
20
Moderate
Consensus
3,2
(Hard/Soft)
Infra-
structure
“Corporate Universities”: In 2022, each OEM runs own corporate universities and
training centers (vocational, service, and design) to attract, develop and retain sufficient
numbers of well-qualified employees in China.
58%
35
Strong
Dissent
3,5
“Public Transport”: In 2022, public transportation is perceived as a convenient
alternative mode of transportation by more than 90% of premium car owners in tier1-3
cities in China.
49%
40
Very Strong
Dissent
3,7
Remarks:
Each projection is formulated as an extreme statement to generate detailed comments from the participating experts.
Probability (0-100%); Impact on Chinese automotive industry (low (1) –(5) high).
Consensus (Level of agreement between 50 Delphi study participants measured as Interquartile Distance).

5. © Copyright EBS Business School and China Europe International Business School
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 The most likely projections (>50%) draft the picture in which the ‘golden ages’ are
over, premium-cars are substantially higher in demand and dealerships go through
consolidation.
 A substantially risen demand for premium cars and car-registration/urban-access
restrictions are expected to have the highest impact on the segment.
 When combining probability and consensus, it can be concluded that the chances
of interior design driving brand-differentiation are “50-50”, while governmental
fleet policies, the global positioning of Chinese OEMs and public transportation are
very controversially discussed.
Graph 5: Probability Consensus Impact Analysis for Macro-Perspective & Industry Environment
3,1 3,3 3,5 3,7 3,9 4,115202530354045
Low HighLow High
Consensus ImpactProbability
30%
40%
50%
60%
70%
Vehicle
Fleets
Vehicle Fleets
Public
Transport
Public Transport
Global Chinese OEMs
Global
Chinese
OEMs
Access
Restrictions
Access
Restrictions
Corporate
UniversitiesMainstream Premium Mainstream PremiumProfit
Margins
Profit
Margins
Remote Areas
Remote Areas
National Pride
National Pride
Interior
Design
Interior
Design
Gold-Rush is
over?
Carefully monitor, given the
high impact and probability.
Mobility ≠ Cars? China’s Vastness…
Dealership
Consolidation
Dealership Consolidation
Corporate
Universities
3,1 3,3 3,5 3,7 3,9 4,115202530354045
Low HighLow High
Consensus ImpactProbability
Low HighLow High
Consensus ImpactProbability
30%
40%
50%
60%
70%
30%
40%
50%
60%
70%
Vehicle
Fleets
Vehicle Fleets
Public
Transport
Public Transport
Global Chinese OEMs
Global
Chinese
OEMs
Access
Restrictions
Access
Restrictions
Corporate
UniversitiesMainstream Premium Mainstream PremiumProfit
Margins
Profit
Margins
Remote Areas
Remote Areas
National Pride
National Pride
Interior
Design
Interior
Design
Gold-Rush is
over?
Carefully monitor, given the
high impact and probability.
Mobility ≠ Cars? China’s Vastness…
Dealership
Consolidation
Dealership Consolidation
Corporate
Universities
Selected
Scenario
Workshop
Results
The most likely PEST scenarios: merging the ‘old’ with the ‘new’
The most likely* PEST scenarios confirm a similar picture of China’s automotive
industry in 2022 compared to 2012, but with quite some substantial changes which are
mostly expected to even ‘change the rules of the game’ in China’s automotive industry.
From a political perspective, the industry experts
expect the scenario “GERMAN STIGMATA” to be the
most likely* for 2022 (Probability 40-60 %). This
scenario renders that…
 …the Government of China (GOC) and state
owned enterprises NEITHER use exclusively
Chinese cars in their vehicle fleets therefore less
emphasizing support for developing domestic
OEMs’ brands,
 …nor that the GOC restricts car registrations or
urban access to passenger vehicles with a
displacement volume <2.0 liters in tier 1-3 cities
therefore leaving the fuel efficiency issue to the
industry.
In short, political SCENARIO 3 renders current
customers’ preferences and market shares in the
premium segment to largely remain comparable in
2022.
Political Environment Projections for 2022
“Vehicle Fleets”: The Government of China and State-Owned-Enterprises have
to use exclusively Chinese OEMs’ brands in their vehicle fleets.
“Access Restrictions”: Registration of new passenger cars and entry in tier1-3
cities in China is only eligible to passenger cars with displacement volume lower
than 2.0 liters.
*Assessed during workshop discussions with local industry experts in China
“AccessRestrictions”
High
SCENARIO 1
20-35% Probability
“GREEN PREMIUM”
SCENARIO 2
0-15% Probability
“CERTIFIED CHINESE
CARS”
Probabilityofoccurrence
SCENARIO 3
40-60% Probability
“GERMAN STIGMATA”
SCENARIO 4
10-20% Probability
“CHINESE PREMIUM”
Low
Low Probability of occurrence High
“Vehicle Fleets”

6. © Copyright EBS Business School and China Europe International Business School
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From an economic perspective, the industry experts
expect the scenario “WALL STREET” to be the most
likely* for 2022 (Probability 45-55 %). This scenario
renders that…
 …neither OEMs’ profit margins in the premium
segment decrease substantially,
 …nor dealerships consolidate substantially
yielding a few remaining large players which
jointly account for the major share of annual new
car.
In short, economic SCENARIO 3 renders the
attractiveness of China’s premium segment to
remain high and bargaining power to largely remain
with OEMs in 2022.
From a socio-cultural perspective, the industry
experts expect the scenario “SHANGHAI” to be the
most likely* for 2022 (Probability 40-50 %). This
scenario renders that…
 …China’s younger generation neither
emphasizes national pride considerations in
lifestyle and consumption behaviour,
 …nor the brand perception of premium cars to
be more driven by a car’s interior design.
In short, socio-cultural SCENARIO 3 renders
customers’ preferences to not differ substantially
from the TRIADs and a strong preference for foreign
brands to drive purchasing decisions in the premium
segments in2022
From a technological perspective, the industry
experts expect the scenario “OUTPUT but no IMPACT”
to be the most likely* for 2022 (Probability 50-60 %).
This scenario renders that…
 …OEMs in China substantially invest into
corporate universities and training centres to
‘breed’ local talents,
 …but the public transportation is not perceived
as a convenient alternative mode by premium car
owners in China’s tier 1-3 cities.
In short, technological SCENARIO 4 renders
domestic automotive players to particularly benefit
from widely available talents in China and domestic
cars to be at least a choice for the mainstream
segment
“DealershipConsolidation“
High
SCENARIO 1
20-30% Probability
“SLUMDOG
MILLIONAIRE”
SCENARIO 2
0-10% Probability
“STAR TRECK”
Probabilityofoccurrence
SCENARIO 3
45-55% Probability
“WALL STREET”
SCENARIO 4
15-25% Probability
”TRANSFORMERS”
Low
Low Probability of occurrence High
“Profit Margins”
Economic Environment Projections for 2022
“Profit Margins“: OEMs’ profit margins in China’s premium segment have
decreased by more than 50% compared to the profit margins in 2011.
“Dealership Consolidation”: The top 25 dealership groups in China have a
combined market share of more than 60% of annual new car sales.
*Assessed during workshop discussions with local industry experts in China
“InteriorDesign“
High
SCENARIO 1
10-25% Probability
“SANTIAGO DE CHILE”
SCENARIO 2
10-15% Probability
”SEOUL”
Probabilityofoccurrence
SCENARIO 3
40-50% Probability
“SHANGHAI”
SCENARIO 4
20-30% Probability
“FORBIDDEN CITY”
Low
Low Probability of occurrence High
“National Pride”
Social Environment Projections for 2022
“National Pride”: China’s young generation is strongly driven by national pride
considerations in their lifestyle and consumption behavior including premium car
purchases.
“Interior Design”: The brand perception of premium cars is significantly more
driven by a car’s interior design and features (e.g. cockpit ambience, rear space,
center console) than a car’s exterior design (e.g. front/rear lights, radiator grill).
*Assessed during workshop discussions with local industry experts in China
“PublicTransport“
High
SCENARIO 1
0-10% Probability
“IMPACT without
OUTPUT”
SCENARIO 2
10-20% Probability
“OUTPUT with IMPACT”
Probabilityofoccurrence
SCENARIO 3
20-30% Probability
“Neither IMPACT nor
OUTPUT”
SCENARIO 4
50-60% Probability
“OUTPUT but no
IMPACT”
Low
Low Probability of occurrence High
“Corporate Universities”
Technological Environment Projections for 2022
“Corporate Universities”: Each OEM runs own corporate universities and
training centers (vocational, service, and design) to attract, develop and retain
sufficient numbers of well-qualified employees in China.
“Public Transport”: Public transportation is perceived as a convenient alternative
mode of transportation by more than 90% of premium car owners in tier1-3 cities
in China.
*Assessed during workshop discussions with local industry experts in China

7. © Copyright EBS Business School and China Europe International Business School
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The results from the stakeholder projection analysis question many of established expectations
on the future of China’s automotive value chain in 2022.
Eight value chain projections evaluate the potential future of China’s automotive value-chain with
respect to Research and Development, Sourcing and Procurement, Manufacturing and Production,
Distribution and After-Sales. According to the participating experts, China’s automotive value chain will
undergo substantial changes until 2022 and will share some characteristics with nowadays’ automotive
value-chains in the TRIAD markets.
Graph 6: Quantitative Results of Industry Value Chain Projections
Dimension Economic Value Chain Projections Probability Consensus Impact
R&D
Engineering Service Providers: In 2022, foreign engineering service providers in
China strongly integrating ‘Chinese’ design elements with foreign engineering
standards/technological know-how completely drive the development of new cars in
China’s automotive premium segment.
60%
40
Very Strong
Dissent
3,7
Chinese Global Trends: In 2022, China’s automotive industry drives global trends in
the premium segment due to the most dominant group of creative automotive
designers and marketing professionals worldwide working in China.
46%
30
Strong
Dissent
3,5
Sourcing
Suppliers’ M&A: In 2022, Chinese automotive suppliers have the majority control
(majority stakes) of more than 30 out of the current global top 100 suppliers (e.g. from
Europe, Japan, USA).
52%
20
Moderate
Consensus
3,7
Secondary Component Market: In 2022, more than 55% of annual revenues in
China’s automotive supplier industry are generated in the secondary component
market (e.g. maintenance, repair and replacement parts).
55%
13,8
Strong
Consensus
3,4
Production
Automation and Standardization: In 2022, more than 90% of domestic automotive
firms have successfully automated and standardized their production processes and
outperform foreign competitors’ productivity levels in China.
47%
37,5
Strong
Dissent
3,6
Distribution
After-Sales
After-Sales Service: In 2022, dealerships in China generate more than 50% of their
annual revenues through service-offerings (e.g. repair and maintenance, finance,
insurance).
62%
23,8
Moderate
Consensus
3,7
Used Car Market: In 2022, the Government of China strongly regulates the used-car
market which is dominated (>50% sales) by less than 5 dealership groups.
39%
20
Moderate
Consensus
3,3
Customers
2nd Hand Premium: In 2022, more than 90% of China’s current and potential car
buyers prefer buying a used premium car instead of buying a lower-priced new car
from the mass market segment.
44%
28,8
Moderate
Dissent
3,7
Dimension Economic Value Chain Projections Probability Consensus Impact
R&D
Engineering Service Providers: In 2022, foreign engineering service providers in
China strongly integrating ‘Chinese’ design elements with foreign engineering
standards/technological know-how completely drive the development of new cars in
China’s automotive premium segment.
60%
40
Very Strong
Dissent
3,7
Chinese Global Trends: In 2022, China’s automotive industry drives global trends in
the premium segment due to the most dominant group of creative automotive
designers and marketing professionals worldwide working in China.
46%
30
Strong
Dissent
3,5
Sourcing
Suppliers’ M&A: In 2022, Chinese automotive suppliers have the majority control
(majority stakes) of more than 30 out of the current global top 100 suppliers (e.g. from
Europe, Japan, USA).
52%
20
Moderate
Consensus
3,7
Secondary Component Market: In 2022, more than 55% of annual revenues in
China’s automotive supplier industry are generated in the secondary component
market (e.g. maintenance, repair and replacement parts).
55%
13,8
Strong
Consensus
3,4
Production
Automation and Standardization: In 2022, more than 90% of domestic automotive
firms have successfully automated and standardized their production processes and
outperform foreign competitors’ productivity levels in China.
47%
37,5
Strong
Dissent
3,6
Distribution
After-Sales
After-Sales Service: In 2022, dealerships in China generate more than 50% of their
annual revenues through service-offerings (e.g. repair and maintenance, finance,
insurance).
62%
23,8
Moderate
Consensus
3,7
Used Car Market: In 2022, the Government of China strongly regulates the used-car
market which is dominated (>50% sales) by less than 5 dealership groups.
39%
20
Moderate
Consensus
3,3
Customers
2nd Hand Premium: In 2022, more than 90% of China’s current and potential car
buyers prefer buying a used premium car instead of buying a lower-priced new car
from the mass market segment.
44%
28,8
Moderate
Dissent
3,7
Remarks:
Each projection is formulated as an extreme statement to generate detailed comments from the participating experts.
Probability (0-100%); Impact on Chinese automotive industry (low (1) –(5) high).
Consensus (Level of agreement between 50 Delphi study participants measured as Interquartile Distance).
 The most likely projections (>50%) draft the picture in which foreign Engineering
Service Providers (ESPs) drive OEMs’ new-car developments and dealerships direct
their primary attention towards after-sales services - indicating a large secondary
component market.
 OEMs’ sole reliance on foreign ESPs, a shift towards after-sales services and the
demand for 2nd hand premium cars are expected to have the highest impact on
the industry.
 When combining probability and consensus, it can be concluded that suppliers
will increasingly focus on the secondary component market while the role of
foreign ESPs for the industry and the technological process competencies of
domestic firms are very controversially discussed.

8. © Copyright EBS Business School and China Europe International Business School
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Graph 7: Probability Consensus Impact Analysis for Industry Value Chain Projections
3,1 3,3 3,5 3,7 3,9 4,110152025303540
Low HighLow High
Consensus ImpactProbability
30%
40%
50%
60%
70%
Low HighLow High
Consensus ImpactProbability
30%
40%
50%
60%
70%
30%
40%
50%
60%
70%
Engineering Service
Providers
Engineering Service
Providers
After-Sales
Service
After-Sales
Service
Secondary
Component
Market
Secondary
Component
MarketSuppliers’ M&A Suppliers’ M&AAutomation and
Standardization
Automation and
Standardization
Chinese Global Trends Chinese Global
Trends
2nd Hand
Premium
2nd Hand
PremiumUsed Car
Market
Used Car
Market
What are the
pros & cons?
Carefully monitor, given the
high impact and probability.
Who wins the
race: China or
West?
Used = Premium?
Take for
granted?
According to the experts, the 8 industry value chain projections imply for China’s
automotive industry in 2022:
 ‘ESP’ driven Research and Development: Foreign engineering service providers
(ESPs) will play a crucial role in China’s automotive industry: ESPs are expected to
successfully integrate ‘Chinese’ design elements with foreign engineering know-
how and to drive development of new cars in China’s premium segment.
Nonetheless, China’s automotive industry will not be in the position of a global
trendsetter due to a shortage of designers and marketing professionals.
 Maturating Chinese Suppliers: Domestic suppliers will continue to acquire major
stakes of large foreign suppliers in order to integrate those suppliers’ technological
know-how as well as management practices and to expand into new geographical
markets. In the domestic market, the enormous secondary component market will
shift Chinese suppliers’ focus towards after-sales.
 Learning Process Competence: Chinese automotive firms will not successfully
automate and standardize their production processes - foreign competitors will
remain their competitive edge and can still outperform domestic firms’
productivity levels.
 Potential in the Used-Car Market: Chinese customers’ preference for new cars will
prevail - despite ‘value-for-money’ offerings such as 2nd hand premium cars - and
the overall used car market will be fragmented without a concise regulatory
framework – inducing little consumer confidence in this market.
What does
the report
offer?
How to integrate the “Scenario 2022” insights in your strategy
The report is specifically designed to account for a strategist’s individual interests:
There is no ‘one size fits all’ solution for strategy. The report is structured to easily fit
with your particular interests or your firm’s current and upcoming plans in/for China.
“China Automotive Industry: Scenario 2022 Report” integrates the assessments
of >80 local industry experts on:
 …16 scenarios (4 scenario matrices) to better understand how China’s future
automotive industry might look like and how to prepare individual functional
strategies today assessing physical assets, human resources, organizational
structures, technologies and relationships.
 …assessments of the probability and impact for 8 industry environment, 3 macro-
perspective and 8 industry value chain projections supporting senior executives to
understand how the future of China’s automotive industry and its value chain
might look like in 2022.

9. © Copyright EBS Business School and China Europe International Business School
- 9 -
The report also includes a specifically developed framework (Institutions-Resources
Matrix) which allows corporate strategist and functional heads to systematically
transfer our industry experts’ insights into strategic planning implications and
consequences on a functional strategy level in order to better plan future budgets and
increase strategic flexibility:
 Identification and evaluation of the department’s or function’s strategic plans as
well as those topics and unresolved or potential issues considered to be the most
relevant ones;
 Identification of the associated PEST scenarios (or projections) in terms of
relatedness;
 Assessment of the identified scenarios’/projections’ potential effects on the
department’s/function’s resources along five categories;
 Identification of re-occurring or conflicting patterns with respect to the elaborated
effects along the distinct PEST scenarios (or projections), followed by development
and evaluation of potential countermeasures to account for the most necessary
adaptations of a department’s resources at an early stage - based upon individual
prioritization.
Responsible?
Dr. Roger Moser
Managing Director
ASIA CONNECT CENTER,
University of St. Gallen;
Automotive Institute for
Management,
EBS Business School;
roger.moser@unisg.ch
Prof. Thomas E. Callarman
Director
CEIBS Center for Automotive
Research,
Professor of Operations
Management,
China Europe International
Business School (CEIBS)
tecallarman@ceibs.edu
Prof. Dr. Franz-Rudolf Esch
Director
Chair of Automotive Marketing
and Brand Management
Professor of Brand
Management and Automotive
Marketing,
EBS Business School
franz-rudolf.esch@ebs.edu
Questions? Christian Kuklinski
Researcher/Doctoral Candidate
Automotive Institute for Management,
CEIBS Center for Automotive Research,
christian.kuklinski@ebs.edu /
kchristian@ceibs.edu
Phone: +49 611 7102 2062
CEIBS Center for Automotive Research (CCAR)
China Europe International Business School
699 Hong Feng Road, 201206 Shanghai
www.ceibs.edu/ccar/index.shtml
Automotive Institute for Management (AIM)
EBS University of Business and Law
Gustav-Stresemannring 3, 65189 Wiesbaden
www.aim-ebs.de