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Abby Yuan

The R&D investment of automobile enterprises is competing

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The R&D investment of automobile enterprises is competing: transforming "high-tech automobile enterprises"? Who is the most interesting?

International market:

Volkswagen is most willing to invest in R&D

Let's first look at the global sector, which car company has the highest investment in R&D. According to the Global Innovation 1000 Survey recently released by PwC, the world's automotive industry invested 16 billion US dollars in R&D in 2018, up 15.2%, after a survey of R&D investment expenditure of 1,000 listed companies in the world in 2018, which is the third largest industry in R&D expenditure. Volkswagen is the most invested company in the world, investing 15.8 billion US dollars in R&D in 2018.

PricewaterhouseCoopers points out that Volkswagen has invested heavily in artificial intelligence and vehicle networking this year, and it has announced that it will invest 34 billion euros in research and development of electric vehicles, automatic driving, automotive services and digitization by 2022. According to the analysis, Volkswagen's turnover last year was 230.7 billion euros, and R&D expenditure accounted for 5.7% of the turnover. In addition, the data show that the automobile companies behind Volkswagen in R&D investment include Toyota ($9.8 billion), Ford ($7.3 billion), General Motors ($8.1 billion), Daimler ($7.8 billion) and Honda ($6.5 billion).

PricewaterhouseCoopers also pointed out that Chinese enterprises are paying more and more attention to R&D. In 2018, R&D investment expenditure grew the fastest, an increase of 34.4%.

Domestic market: SAIC, BYD and Guangzhou Automobile are excellent students in R&D.

What is the investment in R&D by Chinese auto companies? All-media reporters noticed that according to the specific R&D costs announced in the financial reports of major listed companies in the first half of this year, the three companies with the highest R&D costs were SAIC 6.165 billion yuan, BYD 3.719 billion yuan (including its business investment in electronics, mobile phone components) and Guangzhou Automobile Group 1.707 billion yuan. In addition, although Chang'an Automobile, Dongfeng Group and Huachen China did not disclose the specific costs of R&D expenditure in their financial reports, they all indicated that R&D investment increased compared with the previous year. Chang'an Automobile is also one of the high-tech research and development enterprises. As a supplier, Chongqing Feilong Jiangli will work together with Chang'an Automobile to innovate and develop new parts and models.

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For sure automobile enterprises should invest for research and development projects for the sake of their reputation and facilitate their customers. After the gas emission scandal, Volkswagen should definitely give extra funds to for such projects, but in my opinion, there is also another way to collect investments for this thing. I am referring here socially and environmentally responsible investments. Companies should throw ESG shares in the stock market and encourage the investors to get them. Automobile companies can give several arguments about why investors should invest in ESG stocks, and these investments are also very safe and reputable. Definitely, with the help of ESG investments, auto companies can improve the environment with eco-friendly fuel options and overcome the use of natural resources etc. 

With the help of these investments, auto companies can also run their R&D projects after the approval of the investors. By the way, it is also excellent news for vehicle riders and owners that companies are trying their best to improve their driving experience. I also found this source which claims that R&D investment of automobile companies reached near 103.1 billion U.S. dollars in 2019, and hopefully, we would see the results of these investments soon. 

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