On March 13, 2010, the Press Center of the Third Session of the 11th National People's Congress held a collective interview on the subject of "Remanufacturing and Sustainable Development of the Automotive Industry." National People's Congress Deputies, President of Shanghai Automotive Group Corporation Chen Hong, National People's Congress Deputies, Chairman of China National Heavy Duty Truck Group Ma Chunji, National People's Congress Deputies, Yulin Diesel Engine Group Co., Ltd. Yu Ping, National People's Congress, Chairman of Shaanxi Fast Group Li Dakai, He Bingguang, inspector of the National Development and Reform Commission’s Central Intelligence Department, attended a group interview and answered questions.
Reporter: Toyota Motor International has encountered a crisis of recall due to quality problems. We know that remanufacturing is based on the processing of old parts, as described, and how can we guarantee the quality standards of parts and components? Thank you. This question would like to be referred to Ma Chunji.
Ma Chunji: Thank you. I think that remanufacturing is an important part of China's circular economy, especially the "Circular Economy Promotion Law" implemented on January 1, 2009. Remanufacturing is the use of old and old materials to improve their own performance, fully meet the required standards, and is processed through special processes. Therefore, its quality should be completely up to the technical standard before leaving the factory. At the same time, some indicators have been further strengthened in certain indicators, especially in the “consumption†part. Therefore, its own performance is able to meet consumer demand. Automobiles are a large industry for consumables and consumables. By retrieving this part, it should be said that improving its quality and performance can be achieved.
At the same time, as after-sales and new products, we must strengthen after-sales service. In the process of use, there is still a three-guarantee claim issue. In particular, in order to allow ordinary people and consumers to rest assured and have the right to know, our country has stipulated that remanufactured products must have special marks, and the National Development and Reform Commission has clearly announced the Component remanufacturing mark.
"Toyota incident" is a very good negative material for our country's auto industry. As automakers, we attach great importance to the profound lesson of the Toyota incident. Not only do we have to further strengthen our management and service, but more importantly, we must further improve the quality control during the entire process of design and manufacturing, and make Toyota's negative event become our country. A lesson for the automotive industry to promote development and improve quality. In the past few years, Sinotruk has further strengthened its efforts in remanufacturing, particularly engine remanufacturing. On the one hand, it strengthened the measures for the remanufacturing of this engine. In addition to the entire company, we conducted in-depth research and carried out all-round promotion. We formulated a series of measures centering on key work and key issues. I believe that this is not only the action of China National Heavy Duty Truck, but the action of the national automakers.
Reporter: On behalf of Li Dakai, the Shaanxi Fast Company is one of the 14 auto parts remanufacturing enterprises approved by the National Development and Reform Commission. After more than a year of development and practice, what are the current market reflections and what are the difficulties or opportunities and how to solve them? Thank you.
Li Dakai: Our Fast Group, as the reporter just said, is one of the 14 remanufactured enterprises established by the country. The main products we produce at Fast are automotive transmissions and various gears. Our output It is very large. We now have a market share of over 70% in domestic heavy vehicles, which is almost 80%. Every year, in terms of absolute quantity, we have produced more than 500,000 units, which exceeds the total of the world’s second- and third-generation multinational companies in this field. Our Fast Company has a market holding of more than 2 million (at home and abroad). Because of our possession, we have included us in one of the pilot companies for remanufacturing. We are assuming that if the 1% of the company can be remanufactured each year and can be put back into use, we will save thousands of tons of steel annually. Because the production of a transmission to hundreds of kilograms of steel raw materials.
After the National Development and Reform Commission listed us as a pilot enterprise for remanufacturing, we invested nearly 100 million yuan, including the construction of factories, including the purchase of equipment, because our company has a foundation for remanufacturing, so now our new remanufactured factory This year will be completed and put into production. After it is put into production, the annual production of transmissions will reach 16,000 units. This is the first phase of the project. With the further development of our remanufacturing in the future, I think this number will increase.
Reporter: The production and sales volume of Fast Auto Parts has been ranked among the top in the industry. It has a large market share in the domestic market and exports to more than a dozen countries and regions such as the United States and Australia. This shows that companies are technologically innovative. , product upgrades willing to work hard. Russia is an industrialized country. The equipment manufacturing technology has its own advantages. Will Li have the idea of ​​cooperation with Russia in terms of technological innovation? In addition, the Russian auto market is huge. What is the status of Fast in the Russian market? What are the initiatives to develop the Russian market this year and beyond? Thank you.
Li Dakai: First of all, as the reporter has said, Fast has now ranked first in the world for four consecutive years in terms of output and sales volume of heavy-duty transmission products. However, frankly speaking, we still have a certain gap between the performance and quality of our products and the products of foreign advanced multinational companies. We also need to step up our efforts to catch up. To this end, R&D is our most important link. In the past few years, we invested RMB 600 million to build a national-level automotive transmission research center with advanced domestic standards. We have purchased a large number of advanced experiments from home and abroad. The equipment, including our construction of a two-kilometre test track with various road surfaces, we have also built a research and development building, and our R&D team has now expanded to nearly 500 people. All these have laid a relatively good foundation for us to further strengthen independent innovation.
We can see that our products have such a high market share in China because these products are the result of our own independent innovation. We have more than 40 patents, and we now have a complete transmission gearbox. It is no longer the type of gearbox that we introduced abroad 20 years ago. For example, we have produced 12-speed and 16-speed transmission full synchronizer shafts, such as the 6DS double countershafts we produce specifically for passenger cars. Synchro transmission, there are many more professional internal advanced technologies, our R & D personnel are innovative in the circumstances of adapting to China's national conditions. This is what I introduce about innovation.
Secondly, I would like to talk about the Eastern European market mentioned by the reporter. It can be said that many of the Fast Truck companies currently operating in Eastern Europe have already used our transmissions with the same products. For example, the Kamas Automobile Factory, the familiar Marx Motor Plant, the Graz of Ukraine, and Russia’s Namz and so on, we export tens of thousands of transmissions each year and use them for loading. But this is not our end. I personally think that being able to export to Eastern Europe is just a starting point for us. I remember when I first arrived in Beijing on March 4th, People’s Network asked me to do a live interview and mentioned a problem to me. The question of becoming bigger and stronger, what is called big and what is called strong? I thought for a moment, I said, from my understanding, five aspects must be strong, this company can really be called strong. First, R&D should be strong; secondly, manufacturing should be strong; third, service must be strong; fourth, financial and financial should be strong; Fifth, management must be strong. If we do these five aspects, our company can truly be strong. Because of the time, I do not want to explain one by one. The journalists are all insiders and are easy to understand. However, there is a standard to consider here. I said at the time that there are five areas of strength. How can we call it strong? I personally think that there is only one standard, not only for our automotive industry, but also for other industries. That is to say, we only sell our products to Eastern Europe and sell them to Africa. This is not a powerful performance. Only after a while will our products be sold to Europe, to the United States, to Japan, and to be able to transnationally. Companies are competing on the same platform and occupying a place. This is how our company is truly powerful. Just now this reporter was very concerned about the Eastern European market. I have just explained that we have made great progress in the Eastern European market, but this is only our first step. We know that our gap is still relatively large. We hope that in the near future, our company can truly be strong. Our company can truly make our products occupy a place in the world and has strong competitiveness. Thank you.
Reporter: This question would like to be addressed to Director Ho. You have explained the definition of remanufacturing to us very clearly. Actually, it is a relatively unfamiliar concept for our media and the general public. I would like to ask Mr. Ho. Does the country have any special policies and attitudes towards remanufacturing? What kind of policies have already been introduced or introduced in the future to support this industry? Thank you.
He Bingguang: Remanufacturing China's development, to say positioning, is now in its infancy, starting with the remanufacturing of 14 auto parts. Through pilot projects, through project support, through policy research, we have a good start. In the next stage, we consider taking the development of the remanufacturing industry as an important part of our country's promotion of recycling economy, and also taking into account the characteristics of the development stage of remanufacturing in our country, as well as China’s national conditions, we believe that the remanufacturing industry To be able to develop in a healthy and orderly manner, we must adopt a multi-pronged approach, that is, we must comprehensively use legal, economic and necessary administrative means to promote it. The National Development and Reform Commission, as the comprehensive management department of the national circular economy, is working with the relevant departments to promote the development of our country's remanufacturing industry in accordance with the requirements of the State Council. It mainly considers such nine aspects. I summed it up into 36 words, the first macro-level guidance. We are already drafting, and we have already solicited opinions on the development of remanufacturing industry. We will jointly publish it with related departments to promote the healthy, orderly and rapid development of the nationwide remanufacturing industry. The second planning guideline is to formulate a national remanufacturing industry development plan to clarify goals, identify key points, and strengthen measures. In the third trial, we need to deepen the pilot demonstration and study the scope of expanding the pilot, that is, from the pilot remanufacturing of auto parts, to the construction machinery, mining machinery products and related office supplies, such as toner cartridges for copiers. In the field of remanufacturing to explore the development model of remanufacturing industry with Chinese characteristics. With the fourth policy support, we are studying the relevant fiscal and taxation policies and providing necessary support for funding and project arrangements. The fifth supervisory guarantee is to improve the auto parts mark management system and standardize the recycling system. This supervision focuses on remanufacturing. Where does the old piece come from and where does the remanufactured product go? This kind of channel needs to be able to be unimpeded, and the quality should be guaranteed so that it can be put into operation in an orderly manner.
Sixth, self-innovation. Just now Ma has actually mentioned that the technology of China's remanufacturing industry, although it is not too early for us to start, but our level is not low, we can say without exaggeration that many of our remanufacturing Technology is at the leading level in the world. In this section, we must continue to promote the combination of production, education and research, and in particular, we must demonstrate and promote the remanufacturing technology with Chinese characteristics with independent intellectual property rights. Seventh, standard access. That is, by accelerating the development of relevant standards for remanufacturing, including technical standards, including basic standards, etc., we can truly make our remanufacturing industry develop in compliance with regulations. Eighth, regulations and regulations. Really solve the obstacles and problems related to remanufacturing, and gradually establish a corresponding system of laws and regulations. Ninth, raising awareness, mobilizing the whole people, and truly raising public acceptance through publicity can create a social atmosphere in which our society is willing to use, dare to use, and use remanufactured products. Only in this way, we believe that with the joint efforts of the whole society and the development of the remanufacturing industry, the spring of the development of circular economy will not be far away. thank you all.
Reporter: I would like to ask the Secretary a question. Just now you mentioned that our remanufacturing industry is still in its infancy. I have learned from the data that other European and American countries have gone through decades of history. Compared with other European countries, where is the gap in the remanufacturing industry? Mr. Li Dakai mentioned just now that he encountered many difficulties in the development process. One of them is that consumers are very worried about the quality of remanufactured products. He may not be able to convince people that we can use related policies including some publicity. Remanufactured products can be assured in quality? Thank you.
He Bingguang: With regard to remanufactured goods, I just mentioned its concept in the opening remarks. Actually, the biggest difference between remanufacturing and what we generally call repair or second-hand goods lies in my last sentence, that is, after remediation through specialized technology, remanufactured products are the same in quality and performance as new products, at least not Lower than new products. This is one of the most important signs. That is, the people believe you, first of all, he is to manage according to the requirements of new products. The same quality performance, the same safety performance, the same warranty requirements must be achieved, if we can not reach this, we can not say you It is remanufacturing. This is the first one.
Secondly, an obstacle faced by our country in the development of remanufacturing is that the people’s awareness is relatively low and the whole society is actually remanufacturing. I started by saying, “A friend said that if you put this word wrong, it’s really right. The concept of manufacturing can be said that starting from 2005, the State Council proposed to support the remanufacturing of electromechanical products. The term remanufacturing is gradually introduced into our country, from technology to management, but the people are indeed comparing this one. unfamiliar. Therefore, we also hope that through the presence of friends in the press and using the power of our media, we can increase propaganda, which is very important. Its premise is of course our quality.
Third, many people asked how to distinguish between remanufactured products and remanufactured products. Article 40 of the “Promotion Law of the People’s Republic of China on Recycling Economy†stipulates that remanufactured enterprises must be identified as “remanufactured products†in the prominent position of the product. This is stipulated by law, which means that the remanufactured products must be marked and managed, that is, all remanufactured products must be marked on the prominent position as "remanufactured products", which is actually the passage of European and American countries. The purpose of the practice is to safeguard consumers’ right to know and choose. In other words, consumers see the product mark. We recently issued a joint auto parts remanufacturing mark with the State Administration for Industry and Commerce. This sign has just been released. It was first implemented among our 14 pilot companies. Seeing this sign, we Knowing that this is the remanufacturing of auto parts, this is regulated by laws and regulations, that is, letting the people know what kind of remanufactured products are, they must have a corresponding sign. At the same time, let people have a choice. For example, if you drive a car to a repair shop and go to a 4S shop, the 4S shop may ask you. For example, the 4S shop of Fuqiang and the corresponding brand may have an agreement, and my remanufactured engine 4S shop to go, 4S shop people ask you whether you want to use remanufactured engine, or after repair to restore performance. This is the labeling of remanufactured products. One is to let the people have the right to know. I know that remanufacturing products. He knows that he has used the ones that have been repaired after high-tech means to achieve new standards. Second, I have an option. I still use remanufactured products. This is what we consider. Therefore, we believe that remanufactured products have good economic performance and cost savings of 50%. After a period of promotion, consumers will be willing to choose to remanufacture products. When it comes to logos, there are common practice in foreign countries. There are corresponding legal provisions in the United States. There are three points specifically stipulating the content of remanufactured products: First, it is not allowed to mislead consumers about the nature of products that have been used before. Remanufactured products must be clearly and prominently marked as remanufactured in advertising, in sales invoices, in product packaging, and in the product itself. Second, it is not allowed to deliberately conceal the remanufacturers' related information. Third, it is not allowed to improperly use repair, remanufacturing, and other special terms. It should be said that it is very strict and there are laws and regulations. I believe that with the establishment of such a mechanism in our country, the soundness of this legal system, and the overall atmosphere of the development of our remanufacturing industry will gradually improve. I believe this market is also It will gradually increase. Thank you.
Reporter: Taiwan also has a lot of auto parts manufacturers. We know that the remanufacturing plan is very good and is considered as a part of energy-saving economy. May I ask you, how can we guide so many auto parts manufacturers in Taiwan to enter the remanufacturing industry? Let the two sides profit together in the remanufacturing industry? There is another problem. I know that the cost of remanufacturing can not be reduced. If the cost of remanufacturing is still higher than the cost of new products, if the cost cannot be reduced, I, as a consumer, will have a hard time accepting the remanufactured goods. I would like to ask if there is any way to really press down on this cost. Only if the cost is really depressed can we expand the market.
Ma Chunji: Sinotruk Fuqiang Power Engine has been put into production since 2005. This is our country's first to enter this remanufacturing field. We want to make this first pilot company that remanufactures auto parts not only to be big, but also to strengthen it. In fact, this matter was started in 1989. The most important ones are: First, in cooperation with several academicians such as the Chinese Armored Forces Engineering Academy Xu Binshi, and applying the world’s most advanced remanufacturing technology to make this technology available in China. Heavy truck (realization) industrialization. Second, to stabilize a certain market within a certain range, this market area is relatively stable. Thirdly, it in turn provides further convenience to our entire vehicle and our daily after-sales service. Because China National Heavy Duty Truck is the largest heavy-duty automobile manufacturer in our country, it is also the world's leading manufacturer of heavy-duty vehicles. Therefore, after-sales service needs this one. Last year, 15,000 remanufactured engines have been produced and sold, and more than 30,000 units have been produced and sold. Now, what is sold out, it should be said that users are still convenient to use. Everyone is still satisfied. In terms of cost, the Secretary for Security has just spoken, This cost savings of about 50% to 60%, the benefits are also very good. The current problem is that the poor social awareness is what Mr. Li just said. The procedures for the consumption process must further clarify the procedures. I think that we first cooperated with the British “Lissutet†company, not to mention that Taiwan compatriots are involved, and that European companies are welcome to participate. I think this is a very good thing. This market has great potential. This is our experience. We believe that through the development of the remanufacturing industry, our country's circular economy will achieve brilliant results in this breakthrough. We also think that this industry is a sunrise industry. Although it is a remanufacturing industry, it is a sunrise industry. This is about 100 billion US dollars worth of sales in the world. China has just started and there are such good conditions. I think this is a good opportunity. Thank you.
Luan Ping: Just now the reporter’s friend mentioned the cost and quality of spare parts. From the engine manufacturer's point of view, he said several sets of data. First, the number of American remanufacturing workers is 480,000, of which 338,000 are used in auto parts, and the entire US metallurgical industry employs less than 250,000 people. In addition, they have done a very long history.
Second, in the United States, the scale of remanufacturing reached 100 billion in 2005. Last year's figures were not yet available. We did not find out that it may have exceeded 200 billion yuan. It accounts for 70 billion in the automotive industry, of which more than 85% are engine-related.
Thirdly, the Secretary for He said just now that all the users may be most concerned about is the cost issue. I have used a popular phrase to describe this and everyone knows that our current manufacturing process and process are iron-based After the iron is finished, it will be returned to the furnace of the factory, and the blank will be processed and processed again. The most characteristic of the remanufacturing is that the old parts will not be returned to the furnace, but will be processed through advanced technologies and chemicals, and then the original standard will be reached. Directly into the consumer market. This process, transportation, logistics, electricity, coal, processing, and industrial waste in the entire process, we have calculated that a ton of remanufactured products can produce 4 tons of industrial waste, as well as a large amount of fixed waste. Just now the Director-General said energy saving. I would like to stress again that energy saving can reach 60% and material savings can reach 70%. The cost is actually less than 50%. This economic benefit, especially for the social circular economy, is huge. Just now a reporter’s friend asked about its quality. We are manufacturing products. We can absolutely tell everyone that this quality is absolutely free from problems. It has been used in advanced advanced countries in the world for decades. The key point here is that It is in our implementation of this in China. What Director Ho has just mentioned is that the first is the matching of laws and regulations, the second is the threshold for entry, and the third is indeed the need of a large number of news media friends to pay attention and propaganda to the country and to humanity. In fact, it is the best for all our users. Thank you.
Reporter: I have a question I would like to ask, there is a prerequisite for remanufacturing, that is, the problem of product recycling. Before I learned about some recycling of home appliance companies, home appliance recycling companies said that their business status is still a bit difficult, one of which is difficult. This is the problem of product recycling prices, as well as fiscal and taxation policies. I would like to ask what kind of situation is the recycling industry in the auto industry? Is there any difficulty? I would like to ask Director Ho again. Does the country have any new fiscal policies in this regard? Thank you.
Ma Chunji: The auto parts recycling has its own characteristics. First, the parts and components of the automobile industry, the disposal of used cars, and national laws and regulations have dismantled the car and disassembled it into parts and components. The state has also stipulated that it is relatively orderly relative to the household electrical appliance industry.
Secondly, spare parts for after-sales service are generally used by various automobile factories. For example, all parts and components that we produce, out of the car, quality problems, including the collision of the car, traffic accidents in the two cars, and a recovery System, that is to say the parts, I have to personally verify that who produced it, of course, I was joking, our general manager's gearbox is very good, and our total engine is also very good. Whether this part is part of Lee or that part of the total, I want to recover his responsibility, that is, I want to indemnify the user, and then I will go and recover him. This is a process. Therefore, parts recovery is relatively conditional. This is the first. Second, but there are also problems. There are also problems in the current recycling of parts and components because our country still has a relatively confusing problem in the disposal of waste materials after the disposal of waste products, the acquisition of scrap products, and the dismantling of used cars. What we need to solve is that, besides the enterprises in the remanufacturing industry, it is necessary to seriously do this industry. One end is to make the market bigger, that is, to make customers willing to recognize the remanufactured products, and at the other end, to make this part timely. Recover, and the lowest cost recovery, the most orderly recovery. The two issues have been solved. I think that our industry has solved a considerable problem. The development of this industry will develop well and quickly. Thank you.
Fuping: I added that just now he talked about how to recycle. This recycling is indeed a very important part. From the recycling of engine parts, we recently signed a cooperation agreement with Caterpillar in the United States. Actually we and Caterpillar It is also very difficult during the negotiations, but it is optimistic about our most important network. I have more than 2,000 service systems in the country. There are hundreds of companies that specialize in spare parts. All are with me. When the car has problems, it belongs to me. When the engine was used, it was overhauled, tested and replaced by my service station. At this time, all this information and these resources were actually controlled in the network of our manufacturing company. We can negotiate successfully with Caterpillar's globally strong companies. In addition to the country's current need to vigorously develop the remanufacturing industry, it is optimistic about the outside of the Chinese market. I think it is very important to us. It must rely on a very strong Chinese company and the network is very strong. A strong company, or else, relying on one family to recycle this component, the process is very, very low efficiency. Thank you.
Li Dakai: I will add more. I first talked about a problem of recognition. The reporter just talked about it. First of all, I would like to add that the NDRC as the competent authority of this work is very cautious. It allows us 14 companies to carry out pilot remanufacturing of auto parts. It does not mean that, for example, I produce transmissions. I can produce them. I can manufacture FAW transmissions, 2nd steam transmissions, or others. No, I I can only make the transmission I produced again or get someone's authorization. That's always the case. He re-manufactured the engine. He can't just go and remanufacture either Weichai or Xichai. This is very prudent. This is the first point. . The second point is when it comes to recycling. Just now General Manager Ma and Mr. Yu have said that all of our large companies have a very sound sales and service network. For example, we, the Fast Company, have more than 1,000 sales and service outlets in the country, and these are our franchise. In addition to Tibet and Xinjiang, there is an outlet within 50 kilometers on average. This brings us a very convenient condition for recycling. It can not only discriminate between our products, but also Identify the value of this recovery.
Third, just now I mentioned that our greatest difficulty is the question of recognition. It does exist. How do we eliminate these? In addition to hoping that our media and friends from all walks of life can correctly promote and guide our users, we also hope that the state can give us some tax and policy support. We use the lever of economic benefits to attract our users to use more. Remanufacturing products can make our country's circular economy develop healthily and quickly. Before there is no trust, economic benefits can often play a greater role.
Ma Chunji: I would add that actually, the National Development and Reform Commission has already done a lot of work. From the pilot of our company, the state has given great support. In terms of pilot policy, in terms of technical guidance, it also manages manufacturing. A considerable portion of funding subsidies. Now that the National Development and Reform Commission is investigating, the relevant units of the National Development and Reform Commission, the Ministry of Science and Technology, and the Ministry of Industry and Information Technology are investigating how the industry has developed faster and better.
In addition, I hope that friends of the news media can publicize that in addition to the quality assurance we have mentioned, the country is still developing remanufacturing standards because our company has participated in the formulation of this standard. At present, the drafting of these standards is number one. The round has come to an end. At present, we are quite a part of the technical, technological, and design aspects and international standards are in line with similar standards.
In addition, I know that the country is also studying how this industry can further regulate and develop. I believe that these measures, together with the help of friends in the news media, will surely make our industry bigger and stronger. Thank you.
He Bingguang: I'll add it again. I just had a question for me. Regarding policies, just a few CEOs mentioned that the development of the remanufacturing industry needs policy support. I have just discussed and are studying it. One thing to say here is that the European and American countries are advancing the development of the remanufacturing industry. They really support policies that are relatively small, mainly relying on the market. One of its prerequisites is that because it costs less, I say that it can save costs by 50% if theoretically, from In theory, such a low, there are no more favorable policies. Based on the fact that our country's remanufacturing industry is still in its infancy, there are also some countries that really need support. For instance, President Li did not elaborate on just now. You are recycling old parts and it is basically difficult to obtain VAT invoices for products. Some of them are recycled from 4S stores. From this point of view, the tax burden is relatively high. In addition, policy support, in addition to fiscal policies, may have other policies, such as the R&D phase, support for the research and development of remanufacturing technologies, and support for demonstration projects. In recent years, the National Development and Reform Commission has invested from the central budget to remanufacturing. Nearly 80 million people supported, reformed, and demonstrated the pilot enterprises. It is indeed necessary to support the policies. There needs to be a good policy plan, and we are also studying with related departments.
Concerning the first question before you, just a few representatives have rushed to answer, stating that your question is very good, and that it is a key issue in our remanufacturing industry. That is where the old part comes from. There is no problem in manufacturing new products. Raw materials can be made from steel mills. We can make products. First, where do the raw materials and old parts come from? Just now, several representatives said that we now consider that the development characteristics of our country's remanufacturing industry belong to the starting stage and the pilot stage. At the same time, there is a market cultivation stage, from the viewpoint of protecting consumer rights and safety, our current regulations. This is the case: Remanufacturers must obtain the authorization of the original manufacturer, or your own sales channel, your own brand, to carry out remanufacturing. Just now President Li, General Ma, and General Manager Zong talked about this issue. At present, 14 pilot companies in China have followed this requirement. This is just one way to recycle old parts of the world's remanufacturing industry. In the United States, there is also a way for third parties to buy old parts for remanufacturing. This actually involves a deep-seated problem, that is, the protection of intellectual property rights, and the rights and interests of consumers, and for remanufactured products. The issue of protection of intellectual property rights and original products is indeed a very important issue that we must consider when we study policies. From the perspective of foreign practice, the United States believes that both the original manufacturer and the remanufacturer enjoy equal protection of intellectual property rights, and that new processes and new features used in remanufactured products can be patented separately. Enterprises can obtain the authorization from the original manufacturer. To carry out remanufacturing, it is also the starting stage for us to adopt an authorized way to obtain such intellectual property to carry out remanufacturing. For example, the engine of SAIC-VW is to be remanufactured in the VW brand. Another way is that some remanufacturers do not obtain authorization. However, after remanufacturing, the two methods of identifying their products and their own brands are permitted in the United States and are concurrent. Its essence lies in the fact that remanufactured products are managed according to new products and are carried out according to the new product warranty requirements. Of course, we consider the special circumstances of our country. Now it belongs to the initial stage of cultivation. We must standardize at the beginning to advance this matter. The day after tomorrow is 3.15. Everyone knows that it is the Consumer Rights Protection Day. Everyone is more concerned about this. Therefore, the issue raised just now is very good.
Reporter: Just now, you also mentioned that there are still some difficulties for consumers in recognition of remanufacturing. I would like to ask: How much price advantage does the remanufactured product have in the market and in new products? The three companies, as companies, must be profitable to do remanufacturing. I would like to ask how large the profitability of remanufactured products is. Thank you.
Luan Ping: Just now, it has been said repeatedly that from the mere fact that one component does not count logistics or other costs, it should have a 50% cost. However, we started with the recovery of parts and returned to the primary market after the completion of the process. This process should also have a large cost. From our current parts and components, gross margins are generally around 20%, and the space is very large. We predict that with the scale and with the soundness of the entire market, the Secretary mentioned just now that the current remanufactured engine has been re-registered, especially after reaching a certain market size, the gross profit margin of the old remanufacturing industry is much higher. The current gross margin of new engine manufacturing, from what we have obtained, including what we are now doing, may be much higher than the manufacturing of new products.
Reporter: The users of ChinaNet.com are concerned about the great contradiction in our economic development. On the one hand, the development of the automobile industry has brought huge benefits to the country's economy. On the other hand, as a boss of the auto industry, how do you face such contradictions? Is there any solution to the contradiction? Thank you.
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