BAIC Group Climb to New High in Fortune Global 500, Four Engines of Full Power

Date:21 Jul 17

7.30am on 20 July 2017 at US Eastern time, i.e. 7.30pm 20 July 2017at Beijinglocal time, the"Fortune" Magazineofficially announcedthe “Global 500 List for 2017”, in which the BAIC Group ranked number 137with its 61.13 billion US dollars in operating income,jumping over 23 places byprevious year.

BAIC Group held a press conference- "2017 BAICGroup Listed Again in Fortune Global 500 List"on 21Julyafternoon, in which Ms Zhang Dan, ChinaRepresentativeof Fortune Global 500 Ranking announced that BAIC rankedthe 137thplace and Mr Zhang Xiyong, General Manager of BAIC Group introduced the development of the group and answered questions from mediaas well. Dozenof domestic and foreignmainstream media, chief executives from related departmentsof the group headquarterand from main memberunits attended the press conference.

BAIC Group entered the Fortune Global 500 List for the first time in 2013by ranking the 336th. From then on, the group realizedfive appearances in the listconsecutively, climbingover 199 placestotally. Over the past five years, BAIC Group seizedthe opportunities, anchoring development goals, achieveda series of leapfrog developmentby itsclear development strategyand hard working. In 2012, the group sold 1.71 million vehicles, realizing the sales revenue of RMB 210 billionyuan. By 2016,the groupachieved largely-raised performance, when the sales revenue reaching RMB 400 billion yuan after selling 2.85 million cars.

By 2020, BAIC Groupwillrealizeto enter the first echelonof the automotive industryin China both in scale and strength, and to be one of the worldtop 12 automotivecompanies and climb at the top 100 in the Fortune Global 500 List as well.

In the past five years, BAIC Grouppresented a picture of fast growth, good quality and efficiency, strong comprehensive strengthand excellent brand image. Collectivization progress,international development, forward-looking innovative practicesand unique corporate culture composefour strong engines for the group’ssustainedand rapid rise.

Engine 1: Collectivization

Resource integration capacity will be the key to winthe future competition. BAIC Group's rapid and healthy development, first of all,benefits from the strong resource integration capabilitiesbrought out by its collectivization development strategy.

2017 is the 10thanniversary for the BAIC Group to implementthe "Collectivization"strategy. In2007, the groupestablished the "Go Collectivization, For Leapfrog Development" strategy. In 2010, the groupset forth the goal of creating a "Strong BAIC, ScaleBAIC, World BAIC, Harmonious BAIC"and formedthe fast grow model that took strategy as the guide, resourceintegrationas the core, capacity-buildingas the basis and group control as theimportant carrier. After continuous efforts, BAIC Group established the"Big BAIC" patternthat is unprecedentedin the group’s progress history and also completed the accumulationfrom small to largeas well.

Over the past decade, BAIC Group has been keeping integrating the internal and external resources, combiningthe international cooperation and independent development, adjustingand optimizing the product structure and industrial structure, and enhancingthe comprehensive competitiveness of the whole value chain. Comprehensivecompetitivenessalso formed in R&D system, manufacturing system, marketing system, service system, talent system, corporate governance, corporate culture and other aspects. Benefiting from the collectivization strategy, the domesticbrands of BAIC build up adifferentiated brand structure with the "BAIC Motor" and "Changhe Motor"as its two-wheeldriver. Meanwhile Beijing Benz, Beijing Hyundai and other joint venturesmaintain healthy development, and new highlights constantly emerge from new energy vehicles, automobile components, automobile service trade, automobile finance, general aviation, travel service platform and other emerging industries as well as overseas businessand other business segments.

Engine 2: Internationalization

Toenhance international competitiveness and influence, BAIC Group firmly implementsthe internationalization strategyand persists in combinationof "Bringing In" and "Going Out". The group continues to deepen its cooperation with international partnersDaimlerAG from Germanyand Hyundaifrom Korea, and the joint venturesBeijing Benzand Beijing Hyundai contributed an important force for the group’s sustained growth and upgrade. Deeply plowing in theChina market for fifteen years, Beijing Hyundai gainedrecognition from8 million users. Beijing Benz, by its profound accumulation, achieved outstanding success, becominga model of Sino-German industrial cooperation. In 2017, witnessed by the national leaders of China and Germany, BAIC Group and Daimler Groupsigned a new cooperation agreement, and the two sides will have deepercollaboration in thenew energy vehiclesector.

(BAIC Group and Daimler Groupsigned framework agreementfor deeper cooperationon 5 July)

The internationalization strategy brings the global high quality resourcesupportto BAIC Group’s comprehensive development ofmulti-typeoperation. Besides overseasR&D centers already set up in "Six placesof four countries", BAIC Group also starts its cooperation with Italy Leonardo Group and New Zealand Pacific Aerospace Co., Ltd., entering the aircraft manufacturing, sales, operation and servicebusiness, and actively exploringthe development blue oceanfor the general aviation industry chain. In 2017, BAIC Group set up aircraft route maintenance companywith Air France-KLM Group, aggressively marching into the high-end aviation serviceindustry.

BAIC Group also regularly held overseas recruitmentfor high-level talents, aiming at appealing globalelitists. Currently BAIC Group has gathered experts both from the national "Recruitment Program of Global Experts" and the Beijing "Overseas Talent Pooling Program", of which the total number accounts 85% among the overseas high-level stafffrom state-owned enterprisesin Beijing, facilitating the group to become a benchmark for innovation in the capital city.

The internationalization strategy pushes the brands of BAICGroup to the world.BAIC Grouppositively responds to the nation’s"Belt and Road" Initiativeand actively expands itsoverseas layout. In the field of commercial vehicles, Foton Motoris a complete car enterpriseto early layoutthe foreignmarkets within the group and now the group’s passenger car business has alsofullyexpandoverseas. The overseas layoutof BAICGroupthat focuses on South Africa, Southeast Asia, Egypt, Mexico and other placeshighlycorrespondstothe panning direction of the "Belt and Road" Initiative, of which the advantages have already started to appear.

Engine 3: Forward-looking Innovation Practices

Innovation is the source ofpower for enterprise development. BAIC Groupuses forward-looking innovationpracticesto promote transformation and upgrade. In 2016, 4053 invention patentsand 2741 authorized patentswere born in the group. Facing the current and future changes and trends in the global innovation environment, BAIC Group upholdsthe "OpenInnovation, Integrated Innovation, Collaborative Innovation"concept andconstantlyachieve new breakthroughsboth in technology and business models through persistentexplorations and practices.

Withfar-ahead planningin strategy and real workin action ,BAIC Groupgraspsthe "Electric, Intelligent, Networking" trendto promote technological upgrade. The group continues its leading edgein the field of new energy vehicles, whose pure electric vehicle sales rank the first place in China four consecutive years. Besides, the group vigorously builds up the charging security system, developsthe "Wisdom Hui Housekeeper"- an all-weather exclusive service pure electric vehicle service system, promotesthe smart exchange model, gains the first new energy vehicle production qualificationin China and establishes thenew energy automotive industry development fund. The "C30 pure electric passenger car key technology’sintegrated development and application" project got the first prizeof the "China Automotive Industry Science and Technology Award".

In the fieldsof intelligent driving, Internet of Vehicle, forward-looking technology, BAIC Group actively makes cross-industry cooperationwiththe Internet technology giants. Basedon thecooperation, the group formulates the"NOVA-PLS" intelligent development strategyto build a comprehensive car-centeredintelligencesystem, creating systematizedintelligent toolsfortravelsand urban life.

(Family portraitof BAIC new energy models)

Keeping the same pace with technology innovation, BAIC Group has also been strengthening the innovationpractices ofnew business models. Relying on the technology achievements from new energyand intelligentfields, as well as the accumulationfrom the innovative operationof the time-sharing leasing businessfor many years, BAIC Group innovates its business modelby establishinganintelligentplatformfor integrating travelservices and focuses on two major businesssegments- traveland service- to mainly conduct core businesses including car rental, finance leasing, taxi, online car-hailing and etc. The group is also expanding to other more services, sets upa full-rangetravel business clustergradually, forms the closed-loop development for the BAIC-featured industrial chainconsistingof people, cars, roads, networks and commerce. All of these will become a new force for BAIC Group to proceed with its transformation and upgrade.

Engine 4: Corporate Culture

Corporate culture is one of the determining factors for enterprise’s destinyin the long run. BAIC Group, with its historyof nearly sixdecadesin creating and manufacturing cars, accumulates deep BAIC-characteristicculture gene, on which the group makes itsachievements today. The futurecompetitionwill also be decided by how the group to keep pace with the times toenrichits own new cultural connotations.

BAIC Group establishes its "Quality BAIC" corporate imageby the "Quality IsThe Soul"qualityconceptand the "Quality First, Excellent Operation" qualityculture. Meanwhile, the "Tough, Persistent, Dedicated, Supreme"BAIC craftsman spirit has been infiltrated in all aspects of the group. Mr Xu Heyi, Party Secretaryand Chairman of BAIC Groups pointed out: "We shallforge the BAIC craftsman spirit that is of BAIC Group characteristics, and let it be inherited from generation to generationso that it canbe the cultural gene and spiritual supportfor the group’s long-accumulated foundationand achievements."

(An aerial photoof Beijing HyundaiCangzhou Factory)

Asthe backbone automotiveenterprise inChinaand the largest state-owned enterprisein Beijing, BAIC regards its own missions and responsibility to implementthe national strategiesand to promote the coordinated development of economyand society. Actively respondingto the "Beijing-Tianjin-Hebei Coordinated Development"strategy,BAIC Groupimplements the requirementsof the Beijing"Four Centers" constructionto adjustits industrial layout. Apart from vigorously developinghigh-tech manufacturing and serviceindustries in Beijing, the group also sets upthe Beijing Hyundai 4thfactoryin Cangzhou of Hebei Province to drive the logisticsfor vehiclesand parts,service trade, automobile finance and related industriesofthe localmarket. This achievesthe "1+1>2"collaborative development effectbetween Beijing and Hebei, and makesan important contributionto creatingthenew win-winphase for the regional coordinateddevelopmentfor Beijing, Tianjin and Hebei .

It is the essential requirement of the Socialism with Chinese characteristicsthat the results of developmentshall be shared by the people, which is also the responsibilityfor the state-owned enterprisesin China. BAIC Group concerns about public welfare work, always caresforpeople's livelihoodclosely, and in adherenceto the "BAIC · Sunflower" public welfare brandconceptcontinuouslycarriesout student supportand disaster relief and other public welfareprogramto repay the society. On the basis of development, BAIC Group also continues to increase its investment in culture and sportsand other socialprojects. The Beijing volleyballmade a good recordwith the supportfrom BAIC Group. The group reached strategic cooperationwith China Open (Tennis), the Beijing International Marathon and the National Parachute Team. The champions of the China EV Rally, Qinghai Lake and the China Around Taklimakan (International)Rallywere also won by BAIC Group. In 2017,BAIC Groupplunges its concentrated force intothe culturefield. The group launched"The Readers", an outstanding cultural and emotional TV show, in collaboration with CCTV, leadingthe cultural trend, and also createdthe "BAIC BlueOlympic Park Summer Music Season", a performancebrand,enrichingthe cultural lifefor citizensin the capitalcity.

To lead with collectivization and internationalization strategies, to drive with innovation and to move stably and furtherwith cultural taste. BAIC Group will continue to advance the collectivization strategy at a higher standing level, continue to baseon forward-looking innovation and practices, keep vigilant in current peace times(repeated 3times), enhance the sense of crisis andurgency, deepen the transformation, make all efforts and endeavors, and constantly improve international competitiveness and influence, make new contributions to boostthe the local automotive industry"FromLargeToStrong"andfor the economic and social developmentof the capital city.