Speaking at the Chongqing Automotive Forum, LEAPMOTOR's Senior Vice President and COO, Xu Jun, addressed the evolving profit landscape for the industry over the coming decade. He began by contrasting the previous ten years with the upcoming period, highlighting a fundamental shift.
Xu Jun observed that the past decade marked the tail end of an era of high industry growth and substantial profits. Looking ahead, he stated that the sector is entering a prolonged phase of lean profitability, which he believes will become the new normal. He noted this trend is not unique to the auto industry but is a widespread phenomenon affecting all sectors.
He emphasized that the strategies required for success differ drastically between these two eras. The approach during the high-growth, high-profit period can be summarized by two principles: "daring" and "speed." In contrast, the strategy for the lean-profit era also revolves around two core concepts: "precision" and "agility."
To illustrate this difference, Xu Jun used an analogy. He likened the high-profit era to mountain climbing, where the goal is clear and visible. Success depends on having the courage to tackle the challenge and the speed to reach the summit before others.
Conversely, he compared the lean-profit era to surfing. This activity, he explained, heavily tests one's coordination and adaptability because the surfer cannot predict where the next wave will come from or how large it will be, introducing significant uncertainty. The only certainty is the need to maintain a proper stance, ready to adjust posture, direction, and overall capability at a moment's notice to catch the next wave. This, Xu Jun concluded, encapsulates the strategic shift required from the high-profit to the lean-profit era.
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