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1、Foresight 2025Roland Berger ChinaAnnual Trends ReportResilience is a new paradigm for China.It is calling for adaption of business model,operating model,management and decision-making systems.Deep transformation of the Chinese economy The Chinese economy is undergoing a profound transformation that

2、may last for a decade.It doesnt indicate a decade of decline,but suggests a period of volatility.The transformation towards new growth engines is crucial for China to shift from an labor&investment-driven growth model to an innovation&technology-led growth model,ensuring its long-term sustainability

3、 and resilience against global economic volatilities.China is currently in a critical transition phase.Traditional drivers of growthsuch as labor and capital competitiveness,permissive regulation,and planned economic boostsare gradually diminishing.Meanwhile,new growth engines,like industrial modern

4、ization,decarbonization,and sustained domestic demand and consumption,have yet to fully develop to drive the economy.Present deflationary pressures highlight structural issues.Despite Chinas rapid initial recovery from the pandemic,consumption and consumer confidence have remained fragile.Ongoing un

5、certainties around key challenges such as real estate and unemployment have dampened consumer confidence,and therefore spending.Weaker consumption,in turn,pushes businesses to cut production and decrease employment,potentially creating a vicious cycle that becomes increasingly difficult to reverse t

6、he longer it persists.Moreover,global factors such as rising geopolitical tensions,China-U.S.interest rate changes,and moderate global economic growth add additional layers of pressure on the Chinese economy.Navigating transformations with holistic approaches There is no need for excessive pessimism

7、,however.Chinas declining export-to-production ratio and import ratio reflect an increasing proportion of its production is being absorbed by domestic buyers,and the country is moving up the value-added scale.Many of the goods that used to be imported especially automobiles,capital goods,electronics

8、 and semiconductors,as well as consumer products such as cosmetics are now produced domestically.This is not because of any nationalistic drive,but the technology innovation,and higher quality and usage value of the Chinese products.There is still a large,untapped potential in consumption.It is feat

9、ured by changing consumer behavior as Chinese consumers become more rational and sophisticated seeking higher-quality PREFACEof goods and services.This shift in consumption patterns presents significant opportunities for domestic firms to innovate and capture market share,strengthening the domestic

10、economy.Boosting consumption and making it a stable and sustainable contributor to Chinas economy is a long-term endeavor.It relies on the ongoing transformation of the economy.The focus on production has to be shifted from volume to value by higher productivity to generate more disposable income,in

11、 turns,driving up confidence and mass market spending.To achieve this,decision-making system needs to be further improved in companies and the government,adapting to evolving economic realities.A more holistic approach needs to be adopted to enable better planning and efficient allocation of resourc

12、es to achieve sustainable economic growth.There is no quick fix;policymakers and market participants must move past the old China narrative and embrace new growth model.Restoring confidence and ensuring social safety net are crucial to address long-term challenges,especially the aging population.Acc

13、ording to the United Nations,the proportion of Chinas population aged 65 and older is expected to rise to 22%by 2040,up from 13%in 2020.This demographic shift presents long-term challenges of surging healthcare needs and pension pressures.Compare to some European countries,the elderly population in

14、Germany and France in 2023 stood around 22%,with corresponding healthcare spending at about 12%of GDP,compared to 5%in China,a level similar to that of France and Germany in the early 1970s.This gap suggests that rising healthcare demand in China will occur more rapidly and intensely over the next d

15、ecade.Consequently,the government should focus on strengthening the social safety net,by enhancing existing measures such as promoting and regulating long-term savings through financial services,accelerating the development of public and private pension schemes,and improving the density and quality

16、of the healthcare system.Seeking out viable territories for global ventures Faced with rising geopilitical tensions,China is becoming more prone to global fluctuations.According to Global Trade Alert,as of Sep 2024,there have been 14,797 government interventions1)on trade imposed worldwide since 201

17、0,and that number surged after 2018.The interventions include export subsidies,trade protective measures,tariff measures,trade-related investment restrictions etc.The United States contributed to 2,164 interventions,and is exposed to 3,785 interventions;while China implemented 561 interventions,but

18、is exposed to 5,378 interventions,more than any other country in the world.The advent of the new USs administration expects a move beyond trade tensions and restrictions,particularly with China.We will see a broader shift in foreign policy away from a global,institutional,rules-based order.America f

19、irst and managing down the might of the most prominent US rivals will result in a fully concerted unilateralist approach.This will likely involve further increases in tariffs and bans on Chinese goods.Technology export restrictions might also shift from the Biden Small yard,high fence approach to a

20、much broader restricted sector.Such a scenario would heighten tensions between the worlds two largest economies,disrupt global trade networks,and lead to further decoupling of US and Chinese tech and manufacturing sectors.1)The government interventions on trade refer to the measures implemented disc

21、riminately against foreign commercial interest,according to Global Trade AlertIn this context,Chinas export model is undergoing a transformation and will continue to evolve in three main areas:changing destinations,changing products,and altering its model of trade.Changing destinations:Expansion in

22、the global south and the europeIn recent years,China has strategically redirected its trade and investment focus towards the Global South,whose significance is expected to grow even more in the future.Beneath the rising trade figures,ports have emerged as a critical area of infrastructure investment

23、 for China over the past decade.Chinas Maritime Silk Road covers 117 ports in 43 countries,predominantly located in the Global South.China involves in many Port projects from financing,designing,constructing,to sometimes managing overseas port infrastructure.The Global South not only enables China t

24、o diversify its trade dependencies and access new markets but also lessens its sensitivity to Western influences,providing China with greater flexibility in its international engagements.Despite the European Union(EU)adopted a more stringent approach toward China in recent years,the interdependence

25、between these two economies remains significant.The EU is actively seeking to reduce its critical dependencies on China;however,China continues to hold its position as the EUs second-largest trading partner in goods.Conversely,the EU has consistently maintained a trade surplus with China in the serv

26、ices sector,particularly in the area of intellectual property.Moveover,USs America first principle and isolationism may bolster the China-Europe economic relation.There is a window of opportunity for China and EU to remain attractive markets for each other.Changing content:More added-value,from the

27、old three to the next threeInitially known for exporting low-cost intermediate goods,China is now increasingly recognized for its high-value,technologically advanced products as it moves up the value chain.The New Threeelectric vehicles,lithium-ion batteries,and solar cellshave replaced the Old Thre

28、ehousehold appliances,furniture,and clothingas the main drivers of export growth.In the first three quarters of 2024,products from the New Three category were exported to over 200 countries and regions,with their share of Chinas total exports rising to 4.1%,reaching RMB 757.83 billion,up from 1.5%at

29、 the end of 2020.In the next few years,we may see this pattern extend to the Next Three around energy transition,semiconductors,and advanced equipment etc.The destination is anticipated to gradually shift towards global south countries,marking a departure from its traditional focus on global north m

30、arkets.As China continues to bolster its high-value export portfolio,it is positioning itself not just as the worlds factory,but as a leader in innovation and technology-driven sectors.However,in the short-term,China faces heightened trade tensions.The EUs tariffs on electric vehicles with subsequen

31、t investigations into wind turbines,tariff increase in the United States,restrictions of Chinese e-commerce in some South-east countries(e.g.,Indonesia,Vietnam),and a potential cooling of demand in key markets could pose challenges for China in maintaining its export momentum as it moves into 2025.C

32、hanging model:New globalization pathAs Chinas legacy export model is subsiding and domestic demand remains sluggish,a new globalization model is being developed.It is often meant to create production and logisticbases to serve markets regionally.In 2023,Chinas outbound greenfield FDI tripled and rea

33、ched USD 160 billion accounting for 11.6%of the global greenfield FDI.Now,Chinas current globalization outreach is deeply rooted in developing countries such as Vietnam,Mexico,Saudi Arabia,Egypt,Morocco,Kazakhstan,Argentina,and Serbia.Although there has been rising geopolitical tensions from the dev

34、eloped countries including the United States and the EU,greenfield FDI could ease the trade tension by creating local jobs and value added.The localization of Japanese automotive production in the North America and the Europe during the 1980s demonstrates how FDI can alleviate trade frictions,as see

35、n with companies like Honda,Nissan,and Toyota.Now,a similar trend is unfolding,where techno-nationalism and the green transition are driving Chinese greenfield FDI and localization efforts in the EUs battery and electric vehicle value chain.Notable examples include CATL in Germany and Hungary,AESC i

36、n Spain,France,and the UK,and Geely in the UK and Slovakia.In the future,we may see Chinese companies streamlining the battery production process from raw materials to manufacturing and final markets in West hemisphere of Europe and Africa.This evolution will forge a new supply chain and trade corri

37、dor that diverges markedly from the existing routes,heralding a new chapter in global trade dynamics.Implications for business For Chinese companiesAmid a slowing domestic economy,escalating geopolitical tensions,and intensifying competition in high-tech sectors,Chinese companies are confronting inc

38、reased rivalry both at home and abroad,alongside the looming threat of consolidation.These macroeconomic shifts call for a transformation of their business models.De-couple from the risks:Amidst high capacity and slow demand in domestic market,as well as rising geopolitical constraints from the West

39、,Chinese companies need to clearly define the globalization strategy to find new outlets and invest outside China to diversify and mitigate the risks.Re-couple through partnership:Chinese companies can develop a smart partnership strategies in destination countries and along the value chain to be ab

40、le to re-establish connectivity with friendly and less friendly markets.Performance improvement:It is critical for Chinese companies to accelerate the pace to improve their performance and cost,including product quality,cost efficiency,operation improvement,restructuring&consolidation and push the d

41、evelopment of new products and channels.For multinational companies in ChinaAs China undergoes a profound transformation,making business navigation more challenging than before,multinationals must adapt to the duality of this evolving landscapea vast market with robust economic fundamentals on one h

42、and,and a new era of uncertainties on the other.To thrive in this changing environment and mitigate risks associated with increasing uncertainties,they need to shift their business models accordingly.From a systematic standpoint,we identify four strategic options for multinational companies:exit,dec

43、oupling,de-risking,and doubling down,each tailored to specific situations and contexts.For most multinationals operating in the Chinese market,de-risking and doubling down are likely to be the most suitable strategies moving forward.Although these approaches may seem contradictory,they can coexist a

44、t different levels within a business model.De-risking involves adjusting the business model,diversifying the supply chain,strengthening intellectual property(IP)protection,and reducing exposure to risks by establishing strong shields through partnerships.More Chinese skin in the game through local f

45、inancing,local decision making,local ownership,is a new approach,which makes de-risking compatible with doubling down!Doubling down entails increasing selective investments to cope with a singular Chinese markets and local competitioninvestments,enhancing localization efforts,particularly tapping on

46、 the Chinese innovation ecosystem,but also adjusting to increasingly differentiated norms and standards,adopting more direct-to-consumer approaches,and gaining full command of the Chinese digital ecosystem.Roland Berger is committed to assisting our clients in navigating and optimizing their busines

47、s strategies both in China and international markets.With our profound understanding of the Chinese and global markets,complemented by diverse offerings and tools,we empower our clients to proactively tackle challenges,seize opportunities,and achieve sustainable growth in the dynamic and ever-evolvi

48、ng landscape of global business.Denis DepouxGlobal Managing DirectorRoland BergerHot TopicsCONTENTSNew Stage for Corporate Sustainability Transition and Green InvestmentGlobalization Navigating the ComplexityRight Time To Make Al Strategies as Adoption AcceleratesNew Frontier of Chinese Manufacturin

49、g:Global ForceGoing Global Enables Chinese Companies To Become World-class PlayersBreaking New Ground:Winning Formula of New Quality Productive Force121622283440Industry TrendsEnergy&UtilitiesTechnology&InternetPharma&HealthcareAutomotiveCivil EconomicsConsumer Goods&RetailIndustrial Products&Servic

50、esChemicals&Materials445664748084929812Foresight 2025The old paradigm of globalization is goneSince the 20th century,there has been a rapid proliferation of globalization.For decades,globalization has been defined by a paradigm of maximizing competitive advantage,the international socialization of l

51、abor,specialization based on capabilities,and facilitating global trade and logistics with fewer barriers.Today,globalization continues to evolve,shaped by the ever-growing complexity of international relationships.A decade ago,China launched an ambitious plan to ascend as a leading industrial natio

52、n,and it has since emerged as a global economic titan,exerting profound influence on the world economy.However,Chinas ascent has sparked a growing rivalry with the United States,marked by escalating trade tariffs,investment restrictions,and fierce technological competition,all of which intensify the

53、 dynamics of US-China relations.More recently,the COVID-19 pandemic and ongoing regional conflicts exposed unpredictability and vulnerabilities in global supply chains.Moreover,many regions around the world are increasingly besieged by extreme weather events and climate-related natural disasters,pos

54、ing threats to human life and inflicting substantial economic damage.Driven by these multifaceted forces,the old paradigm of globalization is gone.New paradigm of globalization is shapedSince 2018,there has been a new paradigm of globalization gradually shaped in todays global economy.Instead of the

55、 traditional patterns,the new paradigm of globalization is featured by:Increasing emphasis of economic sovereignty based on national interests among countries by prioritizing self-sufficiency in critical sectors and reducing reliance on foreign powers;Rising strategic&economic rivalry among superpow

56、ers/economic blocs,especially for the United States,China,and the Europe;Addressing supply chain de-risking by measures such as diversification,regionalization,nearshoring/friendshoring etc.to minimize vulnerabilities and disruptions;Climate performance becoming the new competitiveness of nations an

57、d business under a new global standard for the greater good of the planet.These new features of globalization add layers of complexities and difficulties for companies operating globally.Balancing between economic interest and regulatory compliance has become a crucial challenge for many multination

58、al companies.Hot TopicGlobalization Navigating the Complexity13Foresight 2025The new globalizationThe much-discussed notion of deglobalization oversimplifies the complexities and even misrepresent the nuanced realities of the current global economic environment.While certain traditional metrics(e.g.

59、,world trade,foreign direct investment)might suggest a deceleration,but they do not imply a retreat from globalization.This evolution indicates countries and companies are strategically rebalancing and adjusting to the shifting geopolitical and economic landscapes,rather than stepping away from glob

60、al interconnectedness.1.Dualization,rebalancing and the versatility of some regions will characterize the new landscape The war in Ukraine,the sanctions on the Russian Federation,the de-risking in the United States-China trade relationship,and global/domestic economic pressure are playing a signific

61、ant role in shaping key bilateral trade trends and investment.These factors collectively contribute to a diverging pattern of global trade between countries of the Global South and the Global North,leading to a dualization of trade dynamics.In 2005,trade between Global South countries comprised only

62、 15%of world trade;however,by 2022,this figure rose to 25%.The International Monetary Fund estimates that,if current trends persist,this percentage could reach 30%by 2030.Conversely,trade among Global North countries has decreased,dropping from 51%in 2005 to 39%in 2022.This shift indicates that nati

63、ons in the Global South are reducing their dependence on traditional trade partners,promoting regional economic integration,and negotiating favorable trade and financing agreements.2.The emergence of connector countries and regions have helped buffer the global economic impact of direct trade reallo

64、cation and splittingThis divergence opened opportunities for other nations to step in.The rise of connector countries has helped mitigate the global economic impact of trade realignment and fragmentation.For instance,the ongoing shifts in global supply chains have positioned Malaysia as a prominent

65、beneficiary of trade diversions.From 2021 to 2023,Malaysia experienced a substantial 14Foresight 2025surge in foreign investments,particularly in the semiconductor industry.In 2023,Malaysias foreign direct investment(FDI)reached RM 188 billion,nearly tripling since 2020.Notably,FDI from the United S

66、tates constituted 11%of the total,marking a 321%increase from 2022,while FDI from Mainland China accounted for 8%,reflecting a 25%rise from the previous year.Amid the global resurgence of industrial policy and driven by weak domestic demand,Chinas outbound greenfield FDI tripled in 2023,attaining US

67、D 160 billion and representing 11.6%of global greenfield FDI.Moving beyond advanced economies,Chinas current globalization strategy is increasingly anchored in key connector countries,extending beyond familiar partners like Vietnam and Mexico to include nations such as Saudi Arabia,Egypt,Morocco,Kaz

68、akhstan,Argentina,and Serbia.3.More explicit and implicit protection instruments are leveraged to control trade and investment with less globally effective rules&dispute mechanismSince 2018,there has been a notable increase in government trade interventions globally.According to the International Mo

69、netary Funds Global Trade Alert,14,797 government interventions on trade which against foreign commercial interest have been implemented worldwide from 2010 to September 2024.A wide range of explicit and implicit protectionist measures are being used to manage and control trade and investment,includ

70、ing tariffs,non-tariff barriers(NTBs),and rebalancing strategies.The most frequently cited reasons for these interventions are strategic competitiveness and climate change mitigation,which have been mentioned 1,389 and 1,054 times,respectively.However,the global framework for establishing effective

71、rules and dispute resolution mechanisms remains insufficient.For instance,the World Trade Organization(WTO)faces criticism because many disputes among its members are stalled due to the paralysis of its Appellate Body.In 2023,the WTO cautioned that an unchecked rise in unilateral measures could frag

72、ment the world economy,potentially leading to a 5%reduction in global income.As of September 2024,there have been 20 cases in the Consultation stage since 2019,17 of which have surpassed the 60-day mark.Typically,appeals should be resolved within 60 days,with an absolute limit of 90 days.The complai

73、nants include the EU,China,Ukraine,Indonesia,Brazil,Argentina,Japan,Peru,Russia,Saudi Arabia,and Venezuela.4.Exacerbated by Covid,economic recovery is creating further economic divergence,in turn fueling more tensions and a vicious circle According to IMFs latest World Economic Outlook,global growth

74、 is expected to remain stable yet underwhelming.At 3.2%in 2024 and 2025.While advanced economies are expected to grew at 1.8%in 2024 and 2025,the emerging market and developing economies are developing at 4.2%annually.Both advanced and developing economies are eager to reignite growth amid the globa

75、l productivity stagnation.However,the uneven recovery has led to greater economic divergence,and disparities can lead to more intensive trade tensions,geopolitical maneuvers,and competition for resources and influence.Therefore,a vicious circle is formulated.Navigating the complexityIn this context,

76、it is imperative for nations and companies to clearly comprehend the evolving dynamics of globalization.The new globalization paradigm necessitates transformational efforts from both countries and businesses to effectively harness new competitive advantages with agility and to mitigate or avoid asso

77、ciated risks.A more VUCA world is there to stay:No deglobalization but dualization,and versatile 15Foresight 2025interests will dominate.In this context,regional,bilateral rules will co-exist with difficult to enforce global rules;expect the rule of the strongest to prevail.Global South and Global N

78、orth:Leverage the dualization paradigm by finding new outlets in the Global South,while adapting/preparing for Global North compliance.Companies must reconsider their strategy from compliance to profitability.Adaption to the new globalization:In face of increasing trade interventions and regulatory

79、compliance,companies need to strengthen their business resilience and operating models through deep understanding,comprehensive assessment and strategic planning.For example,-For markets with entry high-barrier,companies could address the market through indirect/partial access,such as third-party co

80、untries;-Developing a sophisticated localization strategy allows businesses to effectively navigate and align with regional market dynamics and regulatory landscapes.-Operational optimization is crucial to maximize efficiency and ensure resilience in an ever-evolving global economy.Climate performan

81、ce is new competitiveness:For many sectors,it requires concrete actions to meet the climate-related compliance requirement;meanwhile,it calls for transformation and disruptive changes of business models driven by innovation.16Foresight 2025Right Time To Make Al Strategies as Adoption AcceleratesArti

82、ficial Intelligence(AI)will ultimately transform every aspect of human life,work and society.This has become a widely held consensus.The question is:when will this day arrive?For a long time,AIs implementation has lagged peoples expectation.However,the exponential growth of AI generated content(AIGC

83、)technology at the end of 2022 has significantly accelerated the progress.We expect more applications powered by large language models(LLM)will be released and quickly mature.The integration of software and hardware will also unlock more AI application scenarios.For businesses,AI is no longer a nich

84、e topic.Senior business leaders must include AI into their corporate strategies as soon as possible.To better prepare for the large-scale implementation of AI applications in the future,businesses should establish robust data asset management and supervision governance frameworks.In the past year,th

85、e development of AI LLM keeps accelerating;AI technologies adoption rate grows significantlyIn 2024,the adoption rate growth of AI applications was eye-catching.The rate jumped to more than 70%across businesses in 20241.More companies are proactively implementing AI technologies to keep up with the

86、fluid market environment.A study by Microsoft and LinkedIn said that 75%office workers had already been using AI in their daily work.Additionally,46%office workers began to use AI in the recent six months2.AI LLMs are being quickly adopted by businesses and gradually becoming their indispensable too

87、ls.In the realm of AIGC applications,the utilization of virtual video generation services soared through the roof,with the quantity of generated videos multiplying several times compared to 20233.In the financial management field,AI applications have been deployed to evaluate credit risks,market ris

88、ks and operational risks to improve risk control.1)The great acceleration:CIO perspectives on generative AI,MIT technical review,20242)2024 Work Trend Index Annual Report,Microsoft and LinkedIn,May 20243)State of AI Report 2024,Air Street Capital,Oct 2024Hot Topic17Foresight 2025In retail and e-comm

89、erce sectors,Chatbots have been widely used to improve customer experiences.The decrease of LLM costs has laid solid foundation for AIs wider adoption.In the past year,the costs of mainstream LLMs had dropped more than 60%within several months without compromising their great performance or high qua

90、lity4.Significantly lower prices have enabled much more companies to adopt LLMs and accelerated the wider implementation of AI technologies.We expect AIGC will be adopted across various businesses functions in three waves,according to the differences in value creation potentials and manual verificat

91、ion costs.The first wave will cover marketing,sales,customer operation and information technology departments,disrupting traditional content production and operational models.The second wave will land at human resource,supply chain and manufacturing departments to cut cost and improve efficiency.As

92、the AI applications continue to become more sophisticated,they will eventually be deployed in highly professional,low error-tolerance areas where manual verification costs are high,such as product R&D,legal/compliance/risk control and financial teams.There are three models for businesses to adopt AI

93、 technologies:subscription,customized deployment or in-house R&D.Subscription or pay-as-you-go model has the lowest cost,usually no more than 100,000 yuan(US$13,800).It is suitable for smart customer service or office scenarios,because they usually require generic models.This is an ideal first step

94、for businesses to test the water.Customized deployment requires more investment ranging from 1 million to dozens of million yuan.It is suitable for middle-to large-size companies which require multiple function modules and demand high-level of data security.This model will grow quickly to become the

95、 mainstream.If a company uses the in-house R&D approach,this will require the most investment.They should leverage a generic foundation model to build a private vertical AI model from scratch.However,it fits the needs of leading companies of a certain sector because they have accumulated rich data a

96、ssets,need to meet complicated application scenarios,and require 100%control and flexibility.In the meanwhile,we have noticed AI applications have thrived in several areas with an accelerated pace of adoptionEmbodied Artificial Intelligence(EAI)is not a new concept.However,the rapid development of A

97、I LLM has bolstered it to become one of the hottest sectors.Among various applications,humanoid robot has drawn most investment from large technology companies.Leaders in this area,such as OpenAI,Figure,Tesla,Google,and Boston Dynamics,released new solutions one after another.Different companies are

98、 adopting various technological approaches to address the coordination challenge among the brain responsible for high-level planning and decision-making,the cerebellum responsible for behaviour control,and the body responsible for action execution.As the vision language models(VLM)keep evolving,the

99、commercialization of humanoid robots will be driven by real-world data training,simulation training technology advancement and hardware breakthroughs.Cost and versatility are the key factors limiting the speed at which 4)Gemini API,Google for developers,Gemini 1.5 Flash price drop with tuning rollou

100、t complete,and more,August 202418Foresight 2025humanoid robots can be commercialized.In the near future,we may either witness a burgeoning market driven by rapid technological breakthroughs or a market with very small size hindered by technological setbacks.Ambitious scenario:By 2030,EAI could be ap

101、plied to versatile scenarios with high reliability.In this scenario,by 2050,the global annual production volume will reach 50 million units.As the labour force sizes keep declining across many regions,the needs for manual labour by robots will continue to grow and create an annual revenue pool of US

102、$1.5 trillion.Humanoid robots will also completely reshape many industries,such as manufacturing,healthcare,education and entertainment,creating new value propositions and business models.Conservative scenario:On the contrary,if critical hardware or software breakthroughs do not happen,humanoid robo

103、ts will still be deployed only in a small number of niche scenarios and used in controlled or dangerous environment for very specific jobs.By 2050,the global annual production volume will stabilize at 2 million units with a revenue pool of US$200 billion.Besides,humanoid robot manufacturers will hav

104、e to bear high-flying development costs and are challenged by technological complexity and governance uncertainty.Due to a lack of complete interoperability and friendly user interface,these robots will be used only in research,exploration,rescue actions or specific niche manufacturing jobs.AI will

105、accelerate its integration with manufacturing,unveiling a new era of massive adoption:AI technologies have undergone three phases of development expert system,machine learning and deep learning.Now its entering the fourth phase of large language model.Looking forward to 2025,we expect LLM will penet

106、rate various business processes along the full value chain including R&D,production,supply,sales,service in a U-shaped pattern.This means the functions on both ends of the chain,such as R&D,process design,and sales and service,will be the first ones to be disrupted.For example,AIGC can assist extern

107、al appearance design by giving designers inspirations.AI simulation can also replace traditional pilot production,significantly shortening product development cycles.Smart customer services,powered by emotional insights and rich knowledge reserve prepared by AI,can offer users customized one-on-one

108、experiences.However,the production control processes at the very heart of manufacturing industry are unlikely to adopt AI applications within the next one to two years due to the time required for implementation and sophistication.The highly fragmented nature of industrial scenarios,coupled with the

109、 demand for high-speed,real-time response and the accumulation of industrial knowledge,have hindered this progress.Large language models require massive pre-training to rapidly acquire industrial knowledge,enhance interpretability,improve real-time performance,and adapt to real-world applications to

110、 become more specialized and fit for real world usage.Hence,we suggest industrial companies to move quickly,identify their data assets and scenario pain points to find entry points on both ends of their value chains.They should leverage large language models to drive the leap from digitalization to

111、become AI-powered businesses.5)State of AI Report 2024,Air Street Capital,Oct 202419Foresight 2025In the domain of natural language processing,the text to speech(TTS)technologies have made significant progress.It is estimated that 62%of Fortune 500 companies are using TTS services.5 On the other han

112、d,AI voice recognition technology has matured.As various TTS models accuracy keeps improving,many companies are tapping their potential by embedding them into large-scale daily automated jobs.All being said,there are several challenges to be overcome before AI LLM can be widely adoptedThe developmen

113、t of AI is built on the foundation of a strong computing power.The development of high-performance hardware and training of sophisticated AI models often require more investment and consume a huge amount of energy.Hence,the demand for high-performance computing power has been rising.To overcome the

114、computing bottlenecks,it is imperative to balance efficiency and sustainable development of the projects while meeting computing demands.The wider acceptance of AI depends on how its potential negative impacts on jobs can be mitigated.AI could help automate or raise the efficiency of about 40%existi

115、ng jobs,which might lower the employment rates.However,the development of AI itself could also foster new types of jobs,partly offsetting its negative impact on traditional jobs.Data governance is another important factor affecting its adoption.As the development of AI needs more types and larger vo

116、lume of data,it is increasingly crucial to protect privacy.The need for AIs explainability is also on the rise.AI models create contents based on the integration of a vast amount of information,but it is hard to judge 20Foresight 2025whether the raw information is correct or true.The transparency of

117、 AIs decision-making process is critical to enhance the publics trust in AI models.6AIs deep integration into business operations is inevitable.Businesses must proactively develop comprehensive plans to embrace this trendAI will deeply merge with other digital technologies.In the future,the boundary

118、 between AI software and non-AI software will gradually disappear.As businesses accelerate their digitalization transformation,AI will be deeply embedded into other technologies to streamline workflows,creating higher level of transparency and business automation.7 Companies should review their own

119、strategies and business practices,consolidate needs,lead with a clearly defined top-down plan,identify scenarios where AI and digitalization applications can create value.They should upgrade their technology infrastructure,establish suitable teams,and set up risk control frameworks to ensure AI can

120、create meaningful values.Among these efforts,business leaders should pay special attention to risk control,including the three potential risks of legitimacy of data sources,data privacy protection and reliability of outcomes.They need to ensure that AIGC can be stably and sustainably embedded into t

121、heir workflow.More AI legislation and governance frameworks will be released at an accelerated pace.As AI continues to develop,many countries governments have realized the necessity to govern this technology.On 21 May 2024,the Council of the European Union officially passed the Artificial Intelligen

122、ce Act,which came into effect on 1 August.This has become the worlds first AI legislation and is now a reference for other countries.The Act provided developers and implementors with clear rules on AIs specific usage to ensure AI systems will respect human beings basic rights,safety and moral princi

123、ples.It also attempts to solve the hugely influential potential risks that AI models can introduce.We expect more countries will release their AI-related legislations and policies.When companies design their AI product/solution and operating processes,they need to proactively take into account the p

124、otential compliance requirements that will be mandated by these new legislations.6)Artificial Intelligence Index Report,Stanford,20247)Gartner Report cited by InConcert,Oct 202421Foresight 202522Foresight 2025In its Foresight 2024 report,Roland Berger identified five transformative trends reshaping

125、global manufacturing:network optimization,supply chain development,digital transformation,sustainable development,and manufacturing-on-demand platforms.These trends have been convincingly validated throughout 2024 amid significant changes in global supply chain dynamics.Most notably,digital transfor

126、mation has emerged as a dominant force,with 85%of leading companies of various supply chains implementing AI and IoT technologies.The Red Sea crisis,triggering unprecedented shipping disruptions and cost increases,alongside persistent inflationary pressures,has further emphasized the critical import

127、ance of supply chain diversification.Chinese manufacturers have demonstrated remarkable adaptability to these global challenges.They have achieved significant breakthroughs in both technological advancement and global expansion,developing sophisticated industrial automation capabilities while establ

128、ishing strategic production facilities across Vietnam,Mexico,and Eastern Europe.This successful adaptation validates previous forecasts and reinforces Chinese manufacturers strengthening position in global value chains.Looking toward 2025,five strategic imperatives will shape next-generation manufac

129、turing:First,supply chain resilience has become existential-companies must develop multi-regional manufacturing capabilities while protecting core technological advantages.Global expansion is no longer optional but essential for survival in an increasingly competitive marketplace.Second,sustainabili

130、ty must transition from commitment to action,with green manufacturing principles becoming integral to production processes.Third,cross-regional partnerships must be strengthened to ensure supply chain stability and market access,supported by continuous advancement in digital transformation,internati

131、onal collaboration,and technological innovation.Fourth,organizations must evolve from implementing isolated digital solutions to pursuing enterprise-wide transformation,requiring substantial investment in AI and IoT technologies.Finally,manufacturers must elevate their positions in high-tech value c

132、hains through intensified R&D investment and breakthrough innovation.New Frontier of Chinese Manufacturing:Global ForceHot Topic23Foresight 2025Supply chain transformation:Chinas new global manufacturing strategyThe global manufacturing landscape is experiencing unprecedented change,making supply ch

133、ain resilience a critical strategic priority.Traditional centralized supply chain models are no longer sufficient as geopolitical shifts and regional economic realignment reshape global trade patterns.Our research reveals three fundamental dimensions that will define next-generation supply chain sys

134、tems.The first dimension centers on building global supply chain management excellence.This requires establishing localized R&D and manufacturing capabilities in strategic markets worldwide,supported by stringent quality control mechanisms.Companies must implement comprehensive Quality Gate protocol

135、s and Critical Control Point management to maintain operational excellence.Additionally,systematic Supplier Enablement Programs are essential to develop an integrated global supplier network that delivers consistent quality standards across all markets.The second dimension focuses on strategic manuf

136、acturing footprint optimization,implemented through three distinct phases.Companies must first establish standardized production systems to ensure uniform efficiency and quality across global operations.Next,they should strengthen partnerships with strategic suppliers to enhance market penetration.F

137、inally,they must develop deep collaborations with local enterprises in emerging markets to create agile regional manufacturing networks.Our experience shows that combining shared capacity with flexible manufacturing effectively balances scale economies with market responsiveness.24Foresight 2025The

138、third dimension emphasizes digital transformation of supply networks.This requires implementing real-time data analytics for dynamic risk assessment and enhanced supply chain visibility.Success in this dimension depends on developing comprehensive solutions in three areas:core technology innovation,

139、intellectual property protection,and global talent development.This foundation enables continuous supply chain optimization while building lasting competitive advantages.Looking ahead to 2025,supply chain resilience will become the decisive factor in global manufacturing competitiveness.For Chinese

140、manufacturers,this transformation presents a unique opportunity to elevate their position in global value chains.Through strategic restructuring and optimization of manufacturing networks,Chinese companies can establish themselves as leading players in the international manufacturing landscape.This

141、strategic evolution will strengthen their competitive position and secure their role as influential forces in the global manufacturing ecosystem.Green manufacturing:From concepts to strategic implementationThe global manufacturing sector is experiencing a fundamental shift as sustainability evolves

142、from a corporate aspiration to a competitive imperative.This transformation is driven by new regulatory frameworks,such as the Carbon Border Adjustment Mechanism(CBAM)in Western markets,and increasingly rigorous ESG compliance requirements across supply chains.Industry leaders are already capturing

143、competitive advantages through systematic sustainability initiatives.Success in green manufacturing requires coordinated advancement across strategy,operations,and innovation.Strategic implementation begins with integrating sustainability into core decision-making processes and developing comprehens

144、ive roadmaps spanning complete product lifecycles.Leading organizations are moving beyond eco-friendly product development to transform entire value chains through digital technologies and intelligent manufacturing,achieving significant improvements in energy efficiency.Operationally,companies are a

145、dopting circular economy principles,implementing closed-loop supply chains and innovative remanufacturing models.These initiatives have demonstrated compelling results,with successful transformations reducing raw material costs by 15-20%while driving 10-15%revenue growth.Innovation in manufacturing

146、processes is accelerating through zero-carbon demonstration facilities and groundbreaking clean technologies.Industry pioneers have achieved substantial energy efficiency improvements by deploying intelligent energy management systems,incorporating distributed renewable energy,and implementing smart

147、 microgrid solutions.These leaders are extending their influence across supply chains through comprehensive supplier enablement programs,creating sustainable ecosystems that benefit all participants.Looking ahead to 2025,green manufacturing will transition from a competitive differentiator to a mark

148、et entry requirement as global climate governance intensifies.For manufacturers,particularly those from China,this presents both a challenge and an opportunity.Success will require synchronized advances in technology,operations,and management practices to capitalize on emerging opportunities in glob

149、al value chains.Organizations that establish comprehensive green manufacturing capabilities early will secure leadership positions in an increasingly competitive global market.25Foresight 2025Cross-regional strategic synergy:Building global growth anchorsGlobal manufacturing is experiencing unpreced

150、ented transformation as organizations navigate increasing geopolitical complexities and supply chain uncertainties.Roland Bergers research identifies a clear shift among industry leaders from traditional single-market strategies toward an integrated multi-hub,high-coordination framework that optimiz

151、es value chain activities across research and development,production,and market expansion.To address these evolving challenges,successful organizations are implementing three fundamental pillars of cross-regional coordination.First,Regional Manufacturing Hubs leverage standardized production systems

152、 and smart manufacturing technologies to maximize operational efficiency.Second,Regional Supply Chain Centers employ digital networks to ensure supply chain resilience and adaptability.Third,Regional Operation Centers enhance local market engagement and responsiveness.Together,these pillars create a

153、n integrated framework that balances operational robustness with regional market agility.Excellence in cross-regional operations requires mastery of three core capabilities.Organizations must develop sophisticated supply chain integration systems that enable efficient global resource allocation thro

154、ugh end-to-end visibility.They must establish strategically located R&D centers that drive innovation across regions.Additionally,they must build cross-cultural management teams capable of implementing agile decision-making processes.For Chinese manufacturers expanding globally,this presents unique

155、challenges in language,cultural understanding,and policy navigation,emphasizing the need for sophisticated cross-cultural management systems and internationally experienced leadership.As we approach 2025,the ability to orchestrate cross-regional operations will become a crucial differentiator in glo

156、bal manufacturing.Chinese manufacturers must transform from regional players into global value chain leaders,developing multi-tiered partnership networks that secure strategic advantages in the international marketplace.Success requires more than global awareness;it demands systematic coordination m

157、echanisms that enable the transition from domestic prominence to global excellence.Organizations that master this evolution while maintaining strategic coherence across diverse markets will emerge as leaders in the new manufacturing landscape.Digital-intelligent integration:Driving the future of glo

158、bal manufacturingThe manufacturing sector is undergoing a fundamental transformation through the convergence of digital technologies and intelligent manufacturing systems.This evolution creates unprecedented opportunities,particularly for Chinese manufacturers.Our research validates the impact of di

159、gital-intelligent integration,with leading organizations achieving significant operational improvements:15-25%higher production efficiency,20-30%lower operating costs,and 10-15%better product quality conformance rates.Based on Roland Bergers extensive experience in global manufacturing digitalizatio

160、n,we propose a comprehensive three-phase approach to digital transformation:Phase One establishes digital foundations by applying lean management principles to identify and digitalize Critical Control Points affecting efficiency,quality,and cost performance.Phase Two creates an intelligent integrate

161、d operations platform using next-generation Industrial Internet technologies,enabling seamless data integration 26Foresight 2025and end-to-end digital operations through unified MES/ERP systems.Phase Three focuses on organizational transformation,developing standardized management systems and buildi

162、ng a globally oriented,digitally skilled workforce.Success in digital transformation depends on mastering four essential elements.First,organizations must optimize end-to-end processes by transforming traditional KPIs into real-time digital control points.Second,they need to implement unified data g

163、overnance frameworks that enable consistent,data-driven decision-making across regions.Third,they should establish Digital Centers of Excellence(DCoE)to drive standardization,share best practices,and develop talent.Finally,they must strategically select and deploy digital use cases that align with g

164、lobal operations and deliver measurable returns on investment.Looking ahead to 2025,the integration of digital and intelligent technologies will become critical for success in global manufacturing.For Chinese manufacturers,proactive digital transformation represents an opportunity to advance from be

165、ing the worlds largest manufacturing base to becoming a true manufacturing powerhouse.This evolution requires not just adopting new technologies but fundamentally reimagining manufacturing capabilities and competitive advantages.From follower to leader:Technological innovation in global manufacturin

166、gThe global manufacturing landscape is experiencing a fundamental transformation driven by technological innovation.Success in this new era demands more than operational excellence-it requires building globally competitive innovation systems.Industry leaders are adopting a hub-and-network approach,s

167、trategically establishing R&D centers and laboratories in key innovation clusters worldwide to accelerate access to advanced technological resources.These organizations are creating open innovation ecosystems through strategic partnerships with leading research institutions and innovative enterprise

168、s,dramatically expanding their innovation capabilities.The integration of agile methodologies into R&D processes has proven particularly effective,significantly reducing the time from concept development to commercial implementation.Leadership in this transformed landscape requires excellence in thr

169、ee core areas.Organizations must first establish forward-looking research capabilities that deliver breakthrough advantages in strategic fields such as artificial intelligence,advanced materials,and renewable energy.Second,they need to develop digital-intelligent platforms that leverage next-generat

170、ion manufacturing systems to accelerate innovation commercialization.Third,they must implement comprehensive intellectual property strategies that build sustainable competitive advantages through strategic patent portfolio management.As we look toward 2025,the accelerating evolution of global value

171、chains presents Chinese manufacturers with an unprecedented opportunity to transition from technology followers to innovation leaders.Seizing this opportunity requires long-term strategic commitment across three dimensions:sustained investment in innovation,organizational transformation,and manageme

172、nt innovation.Success in this transition will fundamentally reshape Chinese manufacturers position in global value chains,enabling them to compete as world-class innovators in the international marketplace.27Foresight 202528Foresight 2025Going Global Enables Chinese Companies To Become World-class P

173、layersDespite the complex changes in the international environment,Chinese companies are persistently pursing the opportunity of global expansion.Going global has become an indispensable new growth engine for them.The overall going global scale of Chinese companies has reached a new height.In the fi

174、rst three quarters of 2024,Chinas total export value reached 18.26 trillion yuan(US$2.52 trillion),6.2%higher than a year ago.The mix of exported product keeps the upgrading trend.Electrical machinery exports contributed 59.3%of the total value,while advanced equipment(up 43.4%),integrated circuit(2

175、2.0%)and automobile(22.5%)all posted significant growth.Besides,Chinese companies were proactively investing in overseas markets.In the first three quarters,Chinas non-financial outbound investment reached US$106.46 billion,10.9%higher than a year ago.The scale of Chinas overseas investment,which co

176、vered more than 80%of all countries and regions,has ranked among the top three in the world for 12 consecutive years.Leading Chinese companies overseas businesses have been growing.After nearly two decades of globalization,some leading Chinese firms have seen their overseas business contributing mor

177、e than 50%of their total revenue,with profitability also gradually increasing.At the same time,overseas operations have created new profit pools to help them ward off fluctuations and price competition pressure in the domestic market.These companies have established a positive cycle between their do

178、mestic and overseas business units,in which the overseas business can in turn support domestic market operations.High-quality globalized development has become the new themeThe globalization of Chinese companies does not mean simply pursuing overseas sales,but refers to aiming for world-class standa

179、rds,developing new quality productive forces1,and achieving leapfrog growth in the new era.Chinas State-owned Assets Supervision and Administration Commission(SASAC)has put forward a 16-character guideline for world-class companies,namely excellent products,renowned brands,leading innovation,and mod

180、ern governance.To become a world-class globalized Chinese company,the following six capability standards should be met.1.Global coverage:Through globalization,the company should be able to expand its business scale and lift profitability,with both domestic and overseas operations driving growth.Hot

181、Topic29Foresight 2025The company should have broad and deep business footprints across the world,covering major countries and regions.It should hold a significant market share in its core business sector and should have successfully entered developed markets;2.Excellent offerings:These Chinese compa

182、nies should have the capability to plan a portfolio of offerings with the global market in mind.They must continually iterate and upgrade their high-quality,high-performance,and high-value products and services to move beyond price competition.They must be able to deeply understand the needs of regi

183、onal markets and customer segments,and provide targeted,differentiated products and services.3.Renowned brands:These Chinese companies should have the capacity to elevate a brand as well as craft a global brand value proposition,architecture,and communication system.Chinese companies should establis

184、h an innovative online and offline global marketing matrix inclusive of each markets local communication norms.They should be able to rapidly build brand awareness and simultaneously cultivate a globally unified yet locally adapted brand image.4.Leading innovation:These Chinese companies should have

185、 independent research and development capabilities and remain committed to pioneer cutting-edge technologies.Chinese companies venturing overseas should leverage domestic and international collaborative resources to build an innovation ecosystem.They should cultivate core competencies to lead the re

186、volution in their respective industries amidst the global trends of artificial intelligence,energy transition,and digital development.5.Modern governance:These Chinese companies should have the ability to build an agile and efficient governance framework and management system to support global expan

187、sion.At the headquarters control and decision-making level,responsibilities and authorities for various businesses must be clearly defined.At the collaboration and alignment level,functional departments at the Chinese headquarters and business units should effectively support the needs of overseas b

188、usiness units.At the international headquarters and regional management level,a reasonable structure and control mechanism should be set up.At the foreign market support level,business processes,KPIs,performance assessments and other systems should be established to fully support frontline operation

189、s.6.Strong capabilities at overseas markets:These Chinese companies should establish localized sales,service,production,and R&D capabilities in key overseas markets to cover the entire value chain.They should adopt a hub model by setting up regional bases to serve neighbouring markets.These hubs wil

190、l enhance cost competitiveness and service quality as 1)New quality productive forces refer to advanced productive forces emerging from revolutionary technological breakthroughs,innovative reallocation of production factors,and deep industrial transformation and upgrading.It is essentially about qua

191、litative changes in labour force,means of production,objectives of labour and the combination thereof,as represented by a substantial increase in total factor productivity.The concept of was put forward by General Secretary Xi Jinping during his inspection tour to Heilongjiang Province in September

192、2023.He emphasized the necessity of integrating technological innovation resources to fuel the development of emerging strategic industries and those with a more futuristic vision,thereby accelerating the formation of new quality productive forces.Later,at the annual Central Economic Work Conference

193、,he further highlighted the importance of promoting industrial innovation through technological innovation,and to foster new industries,new business models and growth drivers,in particular,by leveraging ground-breaking and cutting-edge technologies,as part of our drive to develop new quality product

194、ive forces.Source:https:/ 2025well as guide the company to adhere to local regulations and mitigate new trade policy risks.These actions will facilitate Chinese companies entry into low-barrier overseas markets first and then expand into mainstream markets.However,Chinese companies still have a long

195、 way to go before becoming a truly world-class global companyWhile they have made significant strides in overseas expansion in recent years,their overseas capabilities and governance systems still need improvement.On the one hand,there are certain capability gaps along the entire value chain outside

196、 of China.Some companies overseas operations are limited to only trading or supporting overseas sales.There is a shortage of certain capabilities in the overseas value chain,with team sizes being either too small or disproportionate to the scale of the business.A lack of a sophisticated sales model

197、and poorly managed point of sales.Many Chinese companies generally rely on a small number of foreign distributors to generate overseas revenue,leading to excessive reliance on them and a lack of sophisticated channel management.They may be still in the feasibility study or establishment phase for th

198、eir own regional companies,preventing them from directly engaging with overseas clients or consumers.As a result,many Chinese companies are not able to provide comprehensive lifecycle solutions to foreign customers and cannot earn profits from the lucrative after-sales market.A lack of localised ser

199、vice solutions and capabilities.Some Chinese companies have insufficient basic service capabilities in overseas markets,while in some regions they are still building local service systems.Spare parts are in short supply in many markets,requiring long waiting times.Multi-tiered spare parts systems,in

200、cluding regional,national,and primary and secondary dealership networks,are yet to be established.Furthermore,local procurement of spare parts is limited,and the digital system for spare parts is underdeveloped.Financial services are absent,and value-added services such as extended warranty packages

201、 are lacking.Limited local production and supply,slow development of related systems.There is a lack of standardised and systematic management capabilities for local manufacturing in overseas markets.Completely knocked down(CKD)or fully localised production capabilities are still under construction.

202、Many Chinese firms also lack experiences required for localised investment in overseas markets.In the meanwhile,localised supply chains,including local suppliers and overseas branches of existing partners from China,are still under development.Their logistics and warehousing network in overseas mark

203、ets is weak.A lack of global insights,products not meeting foreign customers needs.Many Chinese companies overall product portfolio planning lacks a global perspective,so their products may not meet consumers needs in other regions.They are also short of capability to develop customised products for

204、 regional markets.Chinese companies international business units have difficulties in mobilising domestic R&D resources,and they dont have goal-oriented and performance-based incentive mechanisms.A limited understanding of brand building and a lack of local adaptation.Many Chinese companies brand im

205、age and value position are tailored for Chinese domestic consumers,which may not align with overseas market perceptions.The multi-brand strategy 31Foresight 2025that works in China may not be suitable for overseas markets.The one-size-fits-all approach to global brand building lacks expressions appe

206、aling to global audience.Furthermore,the governance framework for overseas businesses is underdeveloped.Certain companies continue to rely on domestic management models,which are increasingly difficult to adapt to the new demands in their globalization drive.Management and control processes are slow

207、 and unclear,with blurred boundaries.Responsibilities for overseas business are still undefined,and there are no clear-cut management boundaries between international business units/companies and the individual sub-brands overseas operations.Globalization has yet been prioritised to the highest CEO

208、initiative level,hence the international business has not been allocated sufficient resources or authority.Clear meeting mechanisms and decision-making processes have not been established.Collaboration and alignment are challenging due to a lack of appropriate mechanisms.International business lacks

209、 the ability to mobilise various headquarter resources,including product development planning,brand management,manufacturing,and supply chain.There are unclear interfaces and reporting lines between headquarters functions and overseas regions,and a lack of shared and coordinated accountability and d

210、ecision-making mechanisms.The overseas control model is misaligned and unclear:The organisational structure has lagged behind the development of overseas business,and various control models have not been mapped to specific application scenarios.Many Chinese firms lack experiences in establishing ove

211、rseas organisations and regional companies.The control model and scope of deputising are unreasonable.The front,middle,and back-office functions at different levels have not been established or their functional boundaries have not been clearly defined.The on-the-ground support is weak:Domestic and i

212、nternational KPI evaluation mechanisms are not aligned;various metrics for international business have not yet been integrated into the headquarters overall annual work plan.There is an insufficient pool of international talent,and the headquarters failed to deploy adequate talents to key overseas p

213、ositions.Chinese companies have not developed a comprehensive system for selecting,using,developing,and retaining local talents in overseas markets.Certain domestic processes have been simply duplicated to overseas markets,which are unsuitable for local conditions.Domestic digital systems are not co

214、mpatible with overseas environments,while there are difficulties in reusing domestic data assets outside of China.We recommend Chinese companies going global to strengthen fundamentals,foster collaboration,achieve quick wins to shore up confidence,and adopt a long-term perspective to build capabilit

215、iesWe have observed that to thrive in the increasingly fragmented global market,leading Chinese companies are building partnerships with foreign business partners and investors,while simultaneously enhancing their internal organisational capabilities to further bolster their core competitiveness.Joi

216、nt ventures,investments,and M&A continue to be key drivers to accelerate Chinese companies global expansion.In the past year alone,Chinese firms have completed 58 cross-border M&A deals(excluding purely equity transactions)valued at 51.3 billion yuan(US$7.08 billion).Beyond traditional M&A,32Foresig

217、ht 2025many Chinese companies have explored more flexible partnership models.By offering technology,investment,and job creation to foreign governments,they have secured market access and resources in various regions.Additionally,through strategic partnerships with domestic companies,some Chinese fir

218、ms have leveraged OEM and product rebranding strategies to tap into global markets more efficiently,because they can utilise their partners overseas production capability,brand awareness and sales channels.The entire value chain,including supporting suppliers,is going global together to fully levera

219、ge Chinas industrial advantages.Taking the automotive industry as an example,auto parts suppliers are following OEMs overseas and rapidly localising their businesses in foreign markets.Southeast Asia,a hotbed for Chinese brands overseas expansion,witnessed the Chinese speed of Chinese auto industry

220、companies localisation in 2024.The localisation of Chinese brands in the Middle East is also expected to accelerate.In 2025,more cockpit and intelligent driving component manufacturers are expected to follow OEMs overseas,becoming partners in building local ecosystems in Southeast Asia,the Middle Ea

221、st,and other regions.Sharing investment and risks across the entire value chain represent a new model of Chinese-style globalization.The entire group needs to reach a consensus on the importance of globalization and strive to become a global company.Due to favourable external environment,fast develo

222、pment of manufacturing value chain in China and raising competency of Chinese companies,ma ny Chinese com pa nies la u nched premature push for globalization.There are often different opinions within companies regarding the significance of going global.Only by prioritising globalization from the top

223、 down and truly treating it as a CEO initiative can internal resources be fully mobilised and the Chinese headquarters transformed into global headquarters.To achieve early success,Chinese companies should concentrate on a limited number of markets and then adopt a long-term perspective to win throu

224、gh leveraging innovative productive forces.Given the vast global market,no company can enter all 190 plus countries at once.Chinese companies often start with low-barrier markets like those along the Belt and Road Initiative and in BRICS nations or countries that require local cooperation.They shoul

225、d leverage their unique strengths and focus on these specific markets to achieve breakthroughs.By developing systematic business and market strategies,they can reap early rewards.As they advance in their globalization journey,Chinese companies should target mature markets as their next step,conduct

226、in-depth research and collaborate with partners to find differentiated entry points.By offering high-quality,technologically advanced,and efficient products and services,they can develop some advanced overseas markets into best practice models to win more successes globally.Chinese companies should

227、extend the entire value chain overseas and integrate into local markets.To truly go global,Chinese firms must listen to distributors and customers in overseas markets,so that they can genuinely understand market demands,enhance the service-oriented mindset across the entire value chain,and improve t

228、heir capabilities.However,going global should not be a superficial and short-lived campaign.It 33Foresight 2025mandates systematic domestic arrangement changes,such as adding dedicated positions,appointing Business Partners in supporting functions,and developing specific systems to support overseas

229、projects.By taking these actions,Chinese companies can ensure continuous and effective insights into,service of,and integration with overseas markets.In the meanwhile,beyond deploying teams overseas,Chinese companies should also forward deploy their business functions and authorities.For instance,es

230、tablishing local manufacturing bases,coordinating supply chains to extend to foreign markets,and positioning product planning functions within overseas companies.Brand building should also be primarily led by and implemented in key international cities.Moreover,Chinese companies should adopt a local

231、 for local philosophy in building local teams and chasing growth in overseas markets.They should develop international businesses fully based on local needs and local mindsets.As we look towards 2025,the big trend of Chinese companies going global is still in its infancy,but the competitive landscap

232、e in overseas markets is becoming increasingly fierce.To succeed in this environment,Chinese companies must embrace a long-term perspective and focus on building their internal capabilities.Achieving high-quality development in overseas markets is the inevitable choice for Chinese companies to break

233、 through and emerge as truly world-class businesses in the next strategic cycle.34Foresight 2025Breaking New Ground:Winning Formula of New Quality Productive ForceIn 2024,many industries in China were trapped in involution,where businesses were involved in intensive competitions and price wars,losin

234、g profitability.Companies had to overcome challenges just to survive.Looking forward to 2025,business leaders have to foster their own new quality productive force to build distinctive competitiveness.Their success in doing so will ultimately determine the fate of their businesses in the new reality

235、.The Chinese market has huge demand for numerous products and services.However,the supply side capacity is equally gigantic.Companies are prone to get mired in the quagmire of homogeneous competition and become commoditized.To prevent new quality productive force from becoming the next red ocean,com

236、panies should analyze their industry environment and leverage their unique strengths to develop meaningful,differentiated,and competitive new quality productive forces tailored to their specific needs.This concept has been defined by this formula:new quality productive force=(science and technology

237、revolutionary breakthroughs+factors of production innovative arrangement+industries in-depth transformation and upgrading)x(labour force+tools+subject of labour)optimized combination.We have summarized some key points to help companies upgrade operational efficiency,build distinctive advantages,avoi

238、d the trap of involution,and win by leveraging the new quality productive force.Revolutionary breakthroughs of science and technology:Not using new technologies to replace,but leveraging them to enableIn recent years,there has been an explosive emergence of new technologies,such as artificial intell

239、igence,industrial internet,and big data.The ensuring digital,automation and AI technologies have been widely adopted by numerous industries.However,some companies have perceived the value of new technologies only by replacing traditional human workers but missed its greater value in helping and enab

240、ling people.Let use a companys automation project as a typical example.Thanks to the fast development of engineering technologies in recent years,it is common to quickly duplicate and deploy automated machinery.It may take only a few years for entire industries to transition from manual labour to fu

241、lly automated manufacturing.This meant that a company might fall into a new homogeneous competition shortly after it climbs out from a previous one.However,even after Hot Topic35Foresight 2025most human workers are replaced by machines,remaining workers experiences and skills are still important.For

242、 example,they will be responsible for matching processes with machines and adjusting new equipment before they go online.Companies not only need to use new technologies but should also combine new technologies and methods with traditional experiences.In this approach,workers can be equipped with new

243、 technologies and proactively upgrade their skill sets to adopt new way of working in the new work environment.Through this approach,businesses can realize their organizations complete transformation and upgrading.Informatization frees people from paperwork.Automation frees people from manual labour

244、.AI transformation frees people from repetitive calculations.However,technologies are not meant to replace human workers.They can co-exist and drive a companys long-term growth together.Businesses should identify the scenarios where technologies and human workers can have the best impact in creating

245、 values.This understanding will underpin a companys operational model and drive its sustainable growth.Innovative arrangement of factors of production:Not spreading resources thin,but focusing on key breakthroughs The purpose of innovatively arranging factors of production is to increase their combi

246、ned efficiency,improve their alignment and matching,and eventually lift the total factor productivity.So,evenly spread your resources across multiple factors can increase only the size,but not efficiency.Companies must address critical bottlenecks and pursue crucial breakthroughs to efficiently over

247、come limitations and improve overall efficiency.For example,in many Chinese companies global expansions,they have met both major opportunities and challenges.However,there are significant differences in market environment,legal framework,relations of production and other factors.Businesses should al

248、locate their limited resources to the areas where they have most promising opportunities.To achieve strategic breakthroughs,companies should conduct a holistic review of their geography,product offerings,business model,supply chain network,and other factors to effectively concentrate their resources

249、.This approach is more effective in achieving their business growth.Of source,it is wise to learn from others past mistakes when venturing into new markets.But business leaders should not blindly follow existing pathways.Every company should tailor its global expansion strategy to its unique strengt

250、hs and circumstances,ensuring that its resources are optimally deployed to achieve maximum impact.It is also important to optimize the arrangement of factors of production during daily operations.Many manufacturing companies have to balance the competing priorities,such as production volume,cost,and

251、 quality.Comprehensive development is a common goal,but during execution companies often end up with conflicting metrics and internal struggles.The result is often wanted all,but got none.The crux to fix this issue is that companies should scientifically analyze its total value factor and identify t

252、he most optimal combination of these factors.By incorporating this understanding into goal setting and performance rating systems,companies can foster a shared vision that aligns the entire organization,driving business growth as one unified entity.In-depth transformation and upgrading of industries

253、:Not blindly chasing trends,but pursuing potential valuesAfter the quick development in recent years,the production capacity of traditional products has outgrown market needs.The new consensus is to 36Foresight 2025focus on the upgrading of product and industries.As a matter of fact,since the beginn

254、ing of 2024,the investment in equipment has been growing at double-digit speed,significantly higher than the overall investment growth.Many traditional industries have launched technology upgrading projects to regain their competitive edge.However,many companies hastily embarked on such projects wit

255、hout conducting thorough research or careful planning.They failed to comprehensively assess market dynamics,competitor strategies,and their own unique strengths,including geographical and resource advantages.These ill-conceived transformations inadvertently turned the former blue ocean into a new re

256、d ocean,where market participants are locked in intense price wars and face mounting commercial pressure.For example,after Chinas economy underwent structural changes in recent years,the manufacturing industry began to use more steel as raw material.But a large number of steel makers blindly switche

257、d to produce industrial wire products,leading to significant oversupply in some regional markets.Another example is the galvanized magnesium aluminium cold rolled sheet market.Its demand took off due to the quick growth of the solar panel mounts and racks market.However,as no new applications emerge

258、d for this rolled sheet,this sector became intensively competitive.Roland Berger believes that the nexus of product and industry upgrading is to meet the demand of high-quality development.Businesses should adopt a forward-looking perspective to meet their downstream clients evolving demand.They mus

259、t address a variety of commercial considerations,including their own advantages,the target categorys potential reward,product selection,market selection,market share projections,and investment requirements.Additionally,they must possess robust research,manufacturing,supply chain,and distribution cap

260、abilities to fulfil these new demands.Firstly,they have to identify the prerequisites of launching new products,such as manufacturing capacity as well as capabilities in equipment,technology and sales.Then,they must calculate the potential rewards of each product,including its market size,competitio

261、n landscape,profit margin and market access difficulty,followed by identifying the model and size of specific products.In the next step,the company should clearly define these products target regional markets,key markets and their sizes,as well as the companys projected market share and profit margi

262、n.Lastly,they should calculate the gap between their current position and their targets,and then take specific actions to bridge the gap.We believe that by adopting a suitable strategy tailored to their specific circumstances,traditional industries can be transformed into knowledge-intensive,energy-

263、efficient,high-potential,and highly profitable strategic emerging industries.For example,Hunan Valin Steel Co.,Ltd.,even though its also in the steel-making industry,has benefited from the popularity of its advanced products,such as wide and thick plates and thin plates.Through long-term strategic p

264、lanning and breakthroughs in wind power,marine engineering,and new energy vehicle industries,Valin has formed new competitive advantages in product and industry upgrades.As the high value-added steel products continue to contribute more to its total sales,Valin managed to maintain its revenue and pr

265、ofitability at a decent level,even though the broader steel industry was declining.Upgrading of labour force:Not the overflow of demographic dividend,but the uplift of talents qualityIn the early stages of Chinas four-decade economic reform and opening-up,a large,low-cost labour force was a signific

266、ant driver of growth 37Foresight 2025and success.As the quality of the workforce improved,China transitioned into a global manufacturing hub,leveraging the skills of its engineers and senior technicians.In contrast,even though the United States has tried to lure back the manufacturing industries thr

267、ough tax breaks and other subsidies,the progress was minimal due to a shortage of domestic engineering talents and senior technicians.Looking forward,with the rise of new quality productive forces and Chinese companies going global,the next wave of labour force dividend will come from managerial and

268、 R&D talents.From a management perspective,Roland Berger has noticed that despite significant investments in new hardware and equipment upgrades,many companies have struggled to achieve optimal results.Ineffective management is one of the main culprits.For example,a chemical company invested 1 billi

269、on yuan(US$137.68 million)to build an automated production line for a high-end raw material used in photovoltaic industry.However,after the system had gone online,the sales fell short of production,leading to excessive inventory buildup.The company attempted a large-volume sales strategy for key acc

270、ounts,but its team lacked the necessary expertise to implement the new sales model.Additionally,Chinese companies have increasingly realized their management shortcomings during their global expansions.In these companies domestic operations,manufacturing facilities were geographically concentrated,s

271、taff members were culturally aligned,and top-down communication was efficient.By contrast,after they expanded into foreign markets,they realized that their once proud management system did not function at all in overseas markets due to the differences in culture,legal environment and mindsets.A majo

272、r challenge for Chinese companies expanding globally during this wave is developing a robust global talent system and standardized frameworks.To solve these issues,Chinese companies have to rebuild their talent management system,re-align business growth directions,and identify gaps in talent matchin

273、g and capability.It is also critical to balance the treatment of existing staff members who had once made huge contributions and the new hires who were responsible to explore the new frontiers.Companies should develop a core job data base and establish a dynamic talent system where best people are r

274、ecruited,developed and retained.Adoption of tools:Not cutting feet to fit shoes,but tailoring clothes to fit the bodyAs more new technologies are adopted,the scope of tools has surpassed the traditional physical tools and now includes network,intelligent and digital technologies.However,if companies

275、 just adopt new tools but couldnt embed them organically with their businesses and organizations,these technologies will not only fail to lift their efficiency,but also create more problems.It is imperative for business leaders to ensure that the introduction of new tools is not cutting feet to fit

276、shoes,but tailoring clothes to fit their bodies.We once worked for a client to solve the problems caused by the embedding of digitalization systems.It has installed various information and data management systems,covering manufacturing,warehousing,sales and financial management operations.However,th

277、ese systems were developed and implemented independently,often driven by a digitalization for digitalizations sake mindset.Since they werent closely integrated with the companys operational processes and organizational structure,these systems have inconsistencies in data sources,definitions,and the

278、formats of their final outputs.Employees must expend significant extra time and effort in verifying and reconciling data sets from disparate systems.This issue not only increased workload without generating any added value but 38Foresight 2025also created a more chaotic environment than before the i

279、mplementation of these systems.This is not a rare case in Chinese companies digitalization transformations.When addressing these problems,we would begin by conducting an in-depth analysis of the interdependencies between all processes and steps within the companys workflow.Subsequently,we would desi

280、gn customized technology solutions and application scenarios.Finally,we would optimize the organizations management,responsibilities,structure,and performance evaluation frameworks.Companies can meaningfully integrate new technologies into their workflow to create real business values.But it require

281、s a systematic approach that connects strategy,business processes,technology implementation,and organizational adaptation.The sophisticated use of tools transformed apes into humans.Todays workers should not become slaves of tools.The adoption of new tools should be a strategic action,not simply a f

282、ad.It should align with real business needs,not be a superficial demonstration.And most importantly,it shouldnt hinder the normal business or organizational operations.The future will undoubtedly bring about more advanced and powerful tools.The companies that can best leverage these tools will stand

283、 out as the winners.Evolution of subjects of labour:Not accumulation,but value discoveryIn the framework of new quality productive force,the subjects of labour are no longer limited to tangible objectives,but also include intangible items,such as information,data and knowledge.However,we have observ

284、ed that despite many companies amassing vast amounts of subjects,they have failed to effectively utilize this valuable resource.This neglect results in the waste of a significant volume of information,data,and valuable knowledge and skills,leading to an immeasurable amount of unrealized potential.Ac

285、cording to the National Data Resource Survey Report,China produced 32.85 ZB of data in 2023,equivalent to the amount of data source in more than 10 million National Library of China.Even on a daily basis,China creates 90 billion GB of data.In the next few years,the amount will keep an annual growth

286、rate of 20-25%.At the company level,vast amounts of data are generated,collected,transported,and stored daily.However,these data are often underutilized,failing to unlock their full potential value.To unleash the potential of these new subjects of labour,we must conduct further analysis and leverage

287、 these data to address real-world business challenges and generate meaningful outcomes.The primary bottleneck in data analysis and application lies not in the analytical process itself,as sophisticated algorithms and powerful computing resources are readily available.Instead,the true challenge resid

288、es in the companys core business model and its ability to effectively translate this model into actionable analytical frameworks.For example,calculators can dramatically enhance the speed and accuracy of calculation.But if they dont know the basic four arithmetic operation rules,or cannot translate

289、these rules for the embedded ICs,even the most powerful calculator cannot produce a correct answer.We have seen many similar cases in businesses operations.To maximize the value of data,companies must first adopt efficient management practices,like lean operations and excellent marketing.Then foster

290、 their translation capabilities to bridge the gap between algorithmic insights and operational realities.Finally,companies should leverage their rich data assets in conjunction with appropriate algorithms to derive valuable insights and achieve desired business outcomes.While accumulating data is es

291、sential,it 39Foresight 2025alone does not create value.Similarly,data analysis without a clear connection to business objectives is meaningless.The full potential of data applications can only be realized within the framework of a highly effective management system.40Foresight 2025New Stage for Corp

292、orate Sustainability Transition and Green InvestmentAs the global political and economic landscape becomes increasingly complex in 2025,businesses will face a more challenging competitive environment.At the same time,the progress of sustainability has raised expectations from clients,regulators,mark

293、ets,investors and other stakeholders on this issue,making ESG(Environmental,Social,and Governance)performance a key metric to measure a companys competitiveness.Roland Berger believes that,to capitalize on sustainability trends and ensure long-term success,businesses should adopt a systematic approa

294、ch to understand the intricate relationship between ESG and their own growth.Only by integrating ESG principles into their strategies and operations,and building robust ESG management capabilities,can businesses position themselves for a thriving future.Entering a new stage of mandatory ESG disclosu

295、re,companies should go beyond meeting compliance requirements to proactively embed ESG principles into business strategiesIn April 2024,the Shanghai,Shenzhen and Beijing stock exchanges successively issued their own sustainability reporting guidelines,requiring companies listed in the four main inde

296、xes,including the SSE 180 Index,as well as those listed both on domestic and international stock exchanges,to release sustainability reports for the calendar year of 2025 no later than 2026.This marks the beginning of mandatory ESG reporting in Chinas A-share market,compelling domestic public compan

297、ies to disclose ESG information in a more standardized and systematic way and setting examples for other market entities.Roland Berger believes that instead of aiming to meet the minimum compliance requirements,companies should proactively integrate ESG principles into their long-term strategies and

298、 daily operations to drive truly sustainable development.For example,on top of meeting environmental regulatory requirements,companies should explore business opportunities created by sustainable development trends,and invest in emerging green technologies and products to capture the green-premium v

299、alue,thus creating a new growth path.In regard to social topics,companies should focus on employee development,customer service and supplier management to foster collaborative success with stakeholders.To improve corporate governance and operational efficiency,companies should optimize organisationa

300、l structures,performance evaluation,as well as Hot Topic41Foresight 2025processes and mechanisms in line with business strategies and demands.To achieve global net zero is a daunting task.Companies should define decarbonisation targets and strategies base on their individual circumstancesClimate cha

301、nge remains one of the most critical issues in the environmental domain.According to the Emissions Gap Report 2024:No more hot airplease!by the United Nations Environment Programme,global greenhouse gas emissions set a new record of 57.1 gigatons of carbon dioxide in 2023,a 1.3%increase from 2022 le

302、vel and above the average growth rate of 0.8%per year in the decade preceding the COVID-19 pandemic(20102019).If we continue emitting greenhouse gases at the current rate,the world is on track to warm by 2.7C by the end of the century1,significantly exceeding the 1.5C target set by the Paris Agreeme

303、nt.This underscores the urgent need for countries to step up decarbonisation efforts.While global decarbonisation remains a widely accepted ambition in the long run,short-term challenges,such as the lingering energy crisis from the Russia-Ukraine conflict,the global economic slowdown,and Trumps anno

304、uncement of the US withdrawal from the Paris Agreement,have cast shadows over the global climate action,leading to a divergence in the pace of emission reduction among international companies.On one hand,some traditional energy multinationals have adjusted their interim carbon reduction targets to e

305、nsure short-term profitability.For example,BP has abandoned its plan to cut oil and gas output by 2030,refocusing on hydrocarbon to boost investor returns,though its 2050 net zero target remains unchanged.Shell has weakened its 2030 emissions reduction target from the original 20%to 1520%.Global com

306、modities giant Glencore has shelved plans to spin off its coal business.On the other hand,leading international chemical companies are doubling down on low-carbon transitions to build up green competitiveness.For example,in BASFs new Winning Ways strategy unveiled in September,transform is identifie

307、d as one of the four strategic levers,with green transformation at its core.BASF is taking a phased approach to achieve emission reduction goals by investing in energy,technology,products and raw materials.Transformation-related spending is expected to average EUR 600 million per year from 2025 to 2

308、028.Similarly,Evoniks new innovation strategy focuses on three key growth areas:bio-based solutions,energy transition and the circular economy,directing the majority of its R&D efforts toward driving green transformation and further stepping up its focus on sustainability.Zooming in on China,with mo

309、re industries being included in carbon trading markets and local companies increasingly competing internationally,it has become imperative for companies to push ahead with low-carbon transition in their operations.Businesses must base efforts on their individual circumstances,set science-based emiss

310、ion reduction targets,define clear decarbonisation roadmaps,and establish corresponding carbon management systems to enhance their capabilities.Technological innovation continues to drive corporate transition,with green investment emerging as a key market trendGlobally,the energy,industrial and tran

311、sportation sectors are the primary sources of greenhouse gas emissions.In China,eight key industries,1)World Economic Forum,The 1.5C climate threshold:What it means and why it matters42Foresight 2025including electricity generation,steel,building materials,non-ferrous metals,petrochemicals and chemi

312、cals,account for approximately 75%of total emissions.For these energy-intensive and carbon-intensive industries,it is essential to design a clear roadmap to achieve net zero emission,and continue to develop and scale up decarbonisation technologies.Looking forward to 2025 and beyond,decarbonisation

313、technologies such as clean energy,low-carbon transportation systems,circular economy models,synthetic biology,CCUS(carbon capture,utilisation and storage)and digitalization will play indispensable roles on the global journey to net zero and continue to attract great attention from both their respect

314、ive industries and capital markets.Companies must stay sensitive to latest technological advancements,closely monitor market trends,and strategically integrate green technologies into operations to achieve their business development goals.43Foresight 2025Looking back at Chinas automotive industry in

315、 2024,automakers in the market faced intensified local competitions amid a mega wave of transformation.Price wars emerged,new models proliferated at a dizzying pace,technologies underwent rapid iterations,and consumer segments grew increasingly diverse.These dynamics presented significant challenges

316、 for industry executives in decision-making efficiency and profitability concern.However,it is undeniable that this turbulent environment has also nurtured several milestone breakthroughs:the monthly penetration rate of new energy vehicles(NEVs)exceeded 50%for the first time,Chinese brands secured o

317、ver 60%of domestic market share,and China solidified its position as the worlds largest automobile exporter.These three record-breaking events manifested significant breakthroughs in the transformation of Chinas automotive industry.In retrospect,the global automotive landscape also underwent remarka

318、ble changes in 2024.The shifting international order posed major challenges to Chinese automakers globalization journey.The polarizing of power balance brought unprecedented uncertainties;the rise of trade protectionism created unexpected market access barriers;and regional divergence in technologic

319、al roadmaps led to different readiness to accept new technologies across various markets.Nevertheless,Chinese automakers and component suppliers,who have been toughened by the intensive domestic competition,accelerated their integration into global value chain by offering products and brand experien

320、ces that deliver superior quality,value,and innovation.Looking ahead,2025 is destined to be an even more extraordinary year.The domestic competition will continue to ruthlessly eliminate weaker players,while the global landscape remains intricate and volatile.Although the automotive industrys transf

321、ormation is a marathon in the long run,addressing the short-term uncertainties of 2025 is a pressing concern for every automotive industry leader.From the perspective of industry observers,Roland Berger automotive team has identified six key trends for 2025.These trends will not only impact individu

322、al sectors,but will also holistically influence all participants across the entire ecosystem.44Foresight 2025Industry TrendsAutomotive45Foresight 202546Foresight 2025Trend01Redefining the value systemIn 2024,the intense price war in Chinas passenger car market piled even more pressure on automakers

323、profitability.From January to September,the overall profit margin of automakers stood at just 4.6%,dropping further to 3.4%in September.This fierce competition has tightened the noose of traditional automakers and prompted many to do re-evaluate their strategy and business priority.Against the backd

324、rop of rapid development in NEVs and intelligent technologies,automakers are constantly adjusting their marketing and pricing strategies to better respond to swift market changes.At the core of these dynamics lies the new generation of Chinese consumers,whose diverse needs,behaviours,expectations on

325、 brands,and demands for more differentiated value propositions are shaping the new market reality.To re-establish their value system,automotive companies have to better understand and respond to the market,as well as adapt to the evolving value propositions of the next generation consumers.To respon

326、d to new consumer demands,solely relying on price wars is not a sustainable option,and may undermine a brands value as well as erode its long-term profitability.Therefore,automakers must resort to some key value-reshaping levers,such as localizing product value definition,differentiating brand marke

327、ting,vertically integrating core component value chain,and pursuing technological innovation.Localizing product value definition:The automotive industrys mega trends are accelerating the shift from traditional product-centric design model to user-centric approaches.The conventional focus on data acc

328、umulation and feature competition is no longer sufficient to create differentiated competitive edges.Automakers need to develop a deep understanding of users actual vehicle usage scenarios and,based on these varied needs,create a unique and irreplaceable user experiences through optimized holistic v

329、ehicle design and integrated flexible configurations.Differentiating brand marketing:The core objective of brand marketing extends far beyond creating a premium positioning.More importantly,it involves conveying value that extends beyond the product itself,such as aesthetic,experiential,social,and c

330、ultural values.By engaging consumers through these dimensions,brands can provide them with richer experiences,shape unique brand images in their minds,and strengthen the brands emotional value to users.These initiatives help create deeper emotional resonance with them,ultimately enhancing consumers

331、brand loyalty and willingness to pay price premium.Vertically integrating core component value chain and pursuing innovation:Vertical integration does not equate to full in-housing.In todays environment of rapid iteration and high investment,a blind pursuit of fully in-housing can lead to resource d

332、ispersion,reduced returns,and potential quality issues.47Foresight 2025Trend02Passing cost pressure across the whole value chainThe decline in automakers profitability poses significant challenges to their financial health,directly impacting their overall resource allocation in the Chinese market.Fa

333、cing such a huge pressure,automakers are forced to reduce medium-to long-term R&D and infrastructure investments,while also cut short-term budgets,particularly in marketing and new product launches.Moreover,to share costs and mitigate risks,automakers are expected to be more open to various joint venture and partnership model,hoping to leverage local companies resources and networks to maintain co