Two German Seasoned Drivers Car Making Plan in China

(Chinese Version)

Daniel (left) & Breitfeld (right)

Early this year, former chief director of BMW i8 project Breitfeld and former Infiniti China’s general manager Daniel exited from their companies and brought up a big stir in the local automobile sector. The pair announced to establish a joint venture to build a China-based smart e-car company. However, months have passed there has been much follow-up news about Daniael, Breitfeld, and their company.

On July 1st however, Dr. Breitfeld announced to be the CEO of the company. This attention drawing company finally came out to the public with the name FMC.

FMC is short for Future Mobility Corporation and registered in Hong Kong. Originally this upcoming company attracted lots of attention for HFT, a foundation that focuses on future car concept projects, established by Foxconn, Tencent and Harmony Auto. Foxconn is a world-class OEM while Harmony Auto is a domestically renowned luxurious car distributor and Tencent is one of the largest internet companies in China.

This dream team covers almost every aspect you can think of in the future car business, such as R&D, production, sales channel, and Internet of Vehicles etc. It naturally makes people think that this might be an attempt for Tencent to deploy its force for future car business and new energy business’s layout.

However, Breitfeld and Daniel denied such speculation recently in an interview with TMTpost.

At present, FMC only has two founders and its team. The company doesn’t have a close connection with HFT. “The official Chinese name of FMC hasn’t come out yet. The current company structure doesn’t have a direct relation with HFT. Inn early phase this foundation gave us the register capital. We will seek financing publicly later in the capital market.”

Made in China, by an international team

Breitfeld and Daniel are two German doctors who are also “seasoned drivers” in the traditional automobile industry with engineering background. Breitfeld had worked for BMW for 20 years and was the vice president. Daniel on the other hand has been working in China for 15 years. The former has a deep understanding of the European and American market while the latter knows his way around the Chinese market, which is definitely an edge for them to build a dream team.

FMC has based its operation headquarter in Shenzhen and has R&D centers in the Silicon Valley AND Munich.

When established the company, the pair encountered quite a few challenges. “The first obstacle was from the making of the company’s organization structure. Building a brand new team and operation mechanism is not an easy thing. Besides that, we also needed to find a definition that can describe our products so that we could get them on the market sooner,” Breitfeld told TMTpost.

The director of the market department Mrs. Ding at FMC revealed to us that the senior management team is almost in place and that the members of the founding team all possess years of experience working in the traditional automobile industry. For example, the chief designer from BMW’s i8 project is in charge of the design process while Stephen Ivsan, Duchesne and Paul Thomas from Tesla are responsible for the supply chain, production and machine development respectively. Furthermore, Luca Delgrossi from Benz who was in charge of the self-driving technology development, is now directing the R&D center in the Silicon Valley.

Dr. Daniel introduced to TMTpost that the team has about 50 people and will expand and recruit talents from different professional areas. For a startup company that’s dedicated to e-cars, the architecture of the company is incredibly essential, a lesson learned from Breitfeld’ 20 years of experience managing BMW.

Some might ask why the startup chose three different regions to establish its footholds. According to Daniel, Shenzhen has a competitive advantage in manufacturing while the Silicon Valley has advanced driverless technology and Munich’s strength lies in traditional machine development. This clear kind of division of work is almost flawless. In the future, ensuring the effective collaboration of the three teams would be a great challenge for the company.

“Tesla is not FMC’s competitor.”

What kind of e-car is FMC trying to make with such a dream team? Breitfeld explained to TMTpost that FMC’s positioning is a high-end international automobile brand. “Our main competitors aren’t emerging e-car makers or Tesla, but traditional enterprises including Benz, Audi, and BMW etc,” he said.

In FMC’s blueprint for the future, the company might need at least five years to roll out an affordable car model that can be massively produced while it’s going to take ten years for the global e-car market to become fully mature. According to Breitfeld, FMC aims to build a product family instead of a single car model.

“FMC will first define a technological platform and then subsequently roll out a family concept and shorten the developmental period of products. Our goal is to give our audience a complete work.”

To make cars in China, FMC also has to solve the following issues: The technological path, brand strategy, and how to make mass production.

The automobile industry has around a century’s history and traditional giants such as BMW, Benz and Ford etc. are all the result of years of accumulation of technology. Even emerging star company like Tesla in the e-car area also took over a decade to make Model S, a massively produced car model, available for Chinese consumers. It all started with Tesla’s very first blueprint, the Roadster in 2003 when the company was established.

In accordance with the chronological order, Tesla first rolled out its race card Roadster, then its high-end model Model S and the more affordable Model 3. Tesla’s Asia pacific strategic director previously stated in an interview with TMTpost that Tesla’s inverted pyramid strategy aims to build a brand through building trust of the consumers with high-end car models, then lower the threshold, which is provide affordable models, to attract more consumers to try out e-cars.

Although Tesla is not a direct competition for FMC, Tesla’s development still sets an example to FMC. The market today is very different from that in ten years ago. Initiating an e-car company ten years ago required tremendous courage and Tesla’s achievement is beyond just making good e-cars. The company also educates people about e-cars and promote them to the market, which makes easier for emerging companies like FMC to thrive in the market.

Besides user recognition, Breitfeld believes that FMC is different from Tesla also in the fact that Tesla rolls out its models one by while FMC has a family of car models, which will lead the company to the market much faster.

The two doctors have mentioned in the interview with TMTpost for several times the Internet thinking and Xiaomi mode. “I think Xiaomi mode’s biggest advantage is that it reacts fast. Xiaomi really listens to its users and improve their products according to their needs. Our concept is similar,” said Breitfeld. “We aims to build a reacting feedback mechanism. To bring about satisfying products we would have to know their demands first.”

Based on traditional car making technologies

“Building a brand new Internet smart e-car doesn't necessarily mean everything has to start from scratch,” Breitfeld believes that the automobile industry is a very intensive and technology driven industry. Only basing on traditional car technologies can FMC innovate.

For instance, e-cars are different from fuel cars in structure. However, it’s not that complex. E-cars’ power transmission system, electrical machine, and thermal components are easier to deal with. From the aspect of technology, traditional machines are not the biggest challenge for FMC. What really presents an obstacle is the electrical architecture and software architecture, which are entirely different.

Automatic drive, as the core competiveness of the future smart cars, is also in FMC’s blueprint. However, Breitfeld stated that FMC doesn't aim to invent something in automatic drive either, but would choose some collaborative partners who will provide downstream technical support such as sensors and algorithm etc. to FMC. In other words, FMC will integrate what’s out in the market and reinvent.

In Breitfeld’s opinion, to fully achieve automatic drive two issues will have to be solved first:

Accurate data on the road condition, which will determine the safety of the ride.

The legal framework. If the matter of legal framework is not solved from a global perspective, then it’s impossible to fully achieve automatic driving.

The developmental process of traditional car brands is extremely slow. From concept to production, the process might take 60 to 70 months. Breitfeld illustrates this issue with the example of BMW i8, which took around 38 months. FMC sets a time node for itself, which is make its products available in the market by 2020.

Basing in China, how much of a chance of winning does FMC have?

Even though these two German “seasoned drivers” have chosen China as their startup base, the conditions in the country, whether it’s looking from the driving pattern, the construction of roads, or fundamental infrastructure, China is still not the best test field in the world.

However, Breitfeld thinks differently. From his knowledge, the startup scene, policies, and government influence in China on new energy industry are advantages that are hard to come by. Additionally, China is the largest e-car market, then it’s the American and European market.

Foreign-invested companies that come to China to seek long term development all face the challenges of localization. To over come such obstacles, the company must truly respect and understand the needs of the market and local consumers, take social responsibility, recruit local talents and produce locally. For that FMC chose China as its base directly.

It’s reported that FMC’s products will be produced in China, but they are currently considering two directions. One direction is build their own factories and produce independently, which has intrigued many governments who are willing to provide subsidies for the company. The other is seek cooperation and utilize China’s manufacturing power, finding collaborative manufacturers to help produce. It remains unknown which direction FMC will decide on.

The Internet’s penetration into the car industry is unprecedented. Unlike traditional companies like Tesla and BMW that are based upon the needs of western consumers, FMC is founded to meet Chinese consumers’ demand. In this sense, Breitfeld and Daniel have definitely jumped out of the box and are thinking differently in this wave of Internet car making.

Furthermore, China’s Internet giant Baidu is bringing up its driverless technology fast and Alibaba has recently announced its ROEWE Internet cars with SAIC MOTOR.

Meanwhile, FMC is also facing the competition from powerful local car makers such as NEXTEV founded by YICHE’s board chairman and CEO Li Bin. After two years of team building and factory building, up till now NEXTEV possesses a team of over one thousand people and has Maserati’s former CEO Martin Leach as a joint president. NEXTEV’s goal is also to build a global automobile brand.

FMC’s developmental logic is very clear as a whole, but to realize those goals requires great execution power and enough time for the company to find its rhythm.

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[The article is published and edited with authorization from the author @Li Yupeng, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.