As the end of 2024 neared, I was fortunate to spend time in China, solidifying our market launch by meeting new customers, partners and helping build our team. Without doubt, the trip was an eye-opening experience - seeing the most advanced automotive ecosystem in the world (this coming from a former resident of car-crazy Southern California). There is so much to get excited about for Kognic.
Hefei, two hours west of Shanghai, is a modern city of 10MM inhabitants boasting major research and development centers for the Chinese automotive industry. Kognic was attending the AutoSens conference and trade expo, with Gary Overett, our Managing Director for Kognic China, joining me, Tom Dahlstrom and Jane Qian, our new Program Mgr. in Shanghai.
In addition to focused discussion at the conference, many observations came from the travel itself. What did I see on the roads in Hefei and Shanghai?
The marketing and sales model for these new OEM brands is now first delivered at shopping malls (traditional dealership locations, not so much)
The speed of the supply chain is outrageous with 4 weeks for the car you want!
And… automated and autonomous driving is live with robotaxis and long-haul trucking spearheading the growth.
It’s an amazing blend of industry trendlines that have aligned into pure market leadership. The upside for our industry is that smart and significant pressure is now clearly on the levers that matter - supply chain readiness, SDV adoption, resulting data-driven AI products and refactored customer experiences. In the short- to medium-term, this has meant a cratering of German, US and Japanese OEMs marketshare and profit. Are they ready to catch up? It’s unclear.
The fuzzy spot in the Chinese market is to understand what is really driving growth as government subsidies and “playing favorites” is part of the mixture. Additionally, the Chinese surveillance ecosystem is at a fever pitch - allowing for data capture everywhere with high fidelity and top-down control. Of course, there are workforce and labor considerations as well which pre-date the automotive manufacturing growth (fast fashion producers being a recent case in point).
Geopolitics aside, there are wonderful and highly competent solution providers - like Kognic - who are filling the gap between OEM and Tier 1/Tier 2 suppliers with platforms to capture, manage and label data. It is no longer a copy-cat software market. Chinese developers, particularly with regard to computer vision and perception stacks, are creating unique solutions feeding off of their own unique market requirements.
So... a thoroughly successful roadtrip. The Chinese market is something to behold and is moving fast. See you around the next corner!
苏世闻
Steven