Today, China’s manufacturing industry is in a critical stage of transitioning from “quantitative accumulation” to “qualitative leap.” Especially in the automotive industry—a representative sector—alongside expanding market scale, accelerated technological upgrades, and a maturing supply chain, the question of how to shift from high-speed growth to high-quality development has become a common challenge.

Within the entire automotive industry chain, the governance level of the aftermarket often serves as an important indicator of overall industry maturity. Over the years, while China’s automotive glass aftermarket has experienced vigorous growth, it has also faced challenges brought by unfair competition such as counterfeiting and shoddy products. These problems not only erode brand and consumer trust but also waste social resources and hinder the realization of service value and the deepening of industry division of labor.

Building a healthy and sustainable industrial ecosystem has become an urgent task. As a global leader in the automotive glass industry, Fuyao Group is offering important insights through a series of exploratory practices.

Through long-term practice, Fuyao has chosen not to focus solely on its own interests but to take a more difficult yet correct path: leveraging its leading position to work with partners in establishing standards and building an ecosystem. Its solution is clear and firm: on the one hand, relying on more than three decades of data accumulation, Fuyao took the lead in building China’s automotive glass standard coding system—CARG—to create a “common language” for the market, fundamentally improving efficiency and combating counterfeits; on the other hand, by co-constructing standards with downstream partners, Fuyao is working to strengthen the “last mile” of standard implementation.

This combination of “standard empowerment” and “ecosystem co-construction” reflects a profound shift in management thinking: extending the enterprise’s boundaries from “inside the walls” of internal excellence to “outside the walls” of full supply chain management, and building a value-coexisting industry ecosystem.

“Promoting the upgrading of China’s manufacturing industry requires the joint participation of all parties in the industrial chain, not just the efforts of individual enterprises,” said Curie Chen, President of Fuyao Group’s Global Automotive Replacement Glass Business. When all parties work together to build an ecosystem with clear rules and shared value, China’s manufacturing industry will take more solid steps toward high-quality development.

Fuyao's OEM-equivalent glass for the replacement market

The Path to High-Quality Development in a New Era of Competition

In the automotive industry, there is a thought-provoking contrast: in terms of scale alone, China’s automotive industry already leads the world—with annual new car production exceeding 30 million units in 2024 and vehicle ownership surpassing 350 million. However, in segmented aftermarket areas such as VGRRR (Vehicle Glass Repair, Replacement, and Recalibration), China’s overall revenue level still lags significantly behind more mature European and American markets.

This gap reveals a core challenge in the market’s transformation from “quantity” to “quality”: after establishing scale advantages, the logic of value creation must also upgrade. For example, in the auto parts market, some non-compliant players have long relied excessively on price competition, ignoring differentiation in quality and service. Coupled with irregularities such as counterfeiting, this has made it difficult for law-abiding enterprises to receive reasonable returns for their advantages, trapping the market in low-level competition and hindering the formation of a healthy upward cycle.

Take counterfeiting as an example. Automotive glass trademarks should serve as carriers of information such as automakers, glass manufacturers, and national quality standards, and also as important tools for consumers to identify product authenticity and quality. According to regulations, such markings must be permanently and indelibly affixed to the glass to prevent forgery.

However, driven by profit, illegal operators detected by market regulators have developed low-cost printing methods to produce markings that resemble legitimate trademarks. Though relatively crude to professionals, these counterfeit marks can easily mislead ordinary consumers, allowing low-quality products to be passed off as high-premium alternatives.

Even more hidden are the environmental and resource costs of such products. Due to poor quality and short lifespans, they are often discarded and replaced more quickly, resulting in exponentially amplified waste over their full life cycle. This invisible pollution is not easily seen, but it truly increases the burden on the industry and society.

At the same time, service value is continuously compressed amid such unfair competition. When low prices and shoddy products dominate the market, manufacturing profit margins shrink, which may lead to reduced investment in supply chain links and services. For automotive glass installers and replacement professionals, it becomes harder to achieve reasonable premiums through professional capabilities and quality service, weakening the entire industry’s ability to create value.

In fact, such unfair competition is not an isolated problem in a single market segment but a common challenge faced by China’s manufacturing industry in its pursuit of high-quality development. To achieve the leap from quantity to quality, every manufacturing sector must gradually abandon trust-depleting, value-consuming competition and shift toward collaborative, win-win-oriented division of labor. When all parties in the industrial chain form a healthier, more sustainable ecosystem that supports upward competition, high-quality products and services can receive commensurate market returns, and China’s manufacturing transformation will gain a steady stream of endogenous momentum.

Curie Chen (left) and his team discuss ways to further address pain points in the automotive glass aftermarket

Breaking Through with Standards, Going Far with Ecosystems

To shift the industry from low-level competition to high-quality development, emphasizing quality and service alone is not enough. What is more critical is rebuilding an enforceable, verifiable, and shareable set of rules at the industry level—which is why Fuyao chose to start with “standards” to break the deadlock.

The CARG data system was born in this context. According to Curie Chen, “C” stands for China, and “ARG”refers to replacement automotive glass. This system integrates key information for each piece of glass, including applicable vehicle models, dimensions, and functions, essentially creating a “digital ID” for every glass unit. “It relies on the precise data accumulated by Fuyao through 35 years of deep market participation, with the goal of establishing a unified and authoritative standard coding system for China’s automotive glass supply chain,” Chen explained.

In the past, the industry lacked a unified coding standard. Different manufacturers and channels followed their own naming and management methods, leading to frequent problems in model identification, selection, and circulation. Once an identification error occurs, installation fails and glass must be reordered; distributors face returns and new orders, bearing additional operational pressure and inventory risks; ultimately, most of these inconveniences and losses are passed on to consumers—increasing their time and communication costs. According to Chen, industry estimates suggest that losses caused by identification errors in the automotive glass sector account for more than 20% of procurement value.

With the rapid development of China’s automotive industry, a matching standardized coding system is no longer an enhancement but a prerequisite for internet-based and digital operations. The launch of CARG is building a professional and transparent common language for this large and increasingly complex market.

Of course, standards alone are not enough. To truly make standards effective, it is necessary to solve the problem of their implementation across complex circulation and installation processes—which is the significance of ecosystem co-construction emphasized by Fuyao. Coding is the infrastructure, and the ecosystem is the key to making that infrastructure “come alive.”

On the one hand, Fuyao has established in-depth cooperation with downstream supply chain partner Edows to jointly build national installation service standards covering the selection of qualified glass, correct processes, and use of compliant materials. By setting benchmark stores nationwide and continuously providing training and operational support, Fuyao is driving improvements in service quality—offering consumers cost-effective yet reliable solutions, and providing insurance companies and other partners with more controllable claims costs and higher service consistency.

On the other hand, through hosting the CARG&AGTSS National Competition, Fuyao is transforming standards from “paper rules” into “practical benchmarks.” Now in its third year, the competition evaluates not only speed but also operational standards，mastery of new processes and configurations, visualizing and evaluating invisible professional capabilities, and providing frontline technicians with a sense of professional honor and clear growth paths.

Thus, both the upstream standardization based on CARG and the downstream ecosystem co-construction with partners have gradually formed a sustainable industry foundation. Supporting this long-term investment and iteration is Fuyao’s consistent commitment to long-termism and integrity: rather than engaging in short-term price competition, Fuyao chooses to invest in solidifying rules, connecting the entire chain, and building trust into a system that the entire industry can share.

According to Chen, the results of this “standards + ecosystem” combination are gradually becoming evident. Fuyao has established a “one product, one code” traceability system for all products. As long as the glass is not damaged and the vehicle not scrapped, each piece can be traced throughout its entire life cycle, and the company takes responsibility for issues caused by manufacturing defects. Through the CARG system, practitioners can identify the correct product in one stop with an accuracy rate of over 95%, effectively breaking the information monopoly held by some OEMs over repair data.

More importantly, standardization is reshaping the value chain: high-quality stores connected to the CARG system have generally seen improvements in customer unit price and profit margins because car owners are willing to pay for peace of mind. Store owners no longer need to spend excessive time on model confirmation and multi-party communication but can instead focus on enhancing service experience and optimizing operational management. A standardized, transparent, and traceable system is becoming tangible business value.

Technicians perform ADAS calibration for front windshield cameras at the 2nd CARG&AGTSS National Competition

Technicians perform ADAS calibration for front windshield cameras at the 2nd National Automotive Glass Skills Competition

If “standards” and “ecosystems” are Fuyao’s strategic approaches at the business level, then what supports these explorations is its renewed understanding of the enterprise’s role and management boundaries.

For a long time, some enterprises have simplified competition into a price war. Lacking confidence and patience, they use rock-bottom or even loss-making prices as a shortcut to enter the market, supplemented by short-sighted practices such as passing off inferior goods as high-quality products. This approach may seem fast, but it is actually eroding industry trust and the enterprise’s own future.

To drive manufacturing toward high-quality development, enterprises need a broader perspective and a longer-term vision, winning the market through superior product quality and service. When more participants focus on expanding the market “cake” rather than fighting over a small slice, each can share in healthier and more sustainable returns.

This aligns with Fuyao’s proactive upgrade in management philosophy—from traditional “inside the walls” thinking to an “outside the walls” full-chain perspective. Chen admitted: “We need to redefine the scope of management and break away from wall-bound thinking. Even after a product leaves the factory, we are still responsible for it.” Under this approach, management is no longer seen as merely fine-tuning internal costs and efficiency but as comprehensively overseeing the entire supply chain’s operational efficiency, the customer’s full-life-cycle experience, and even the overall health of the industry ecosystem.

This shift in role reflects a larger industry proposition. On the one hand, it means leading enterprises must not only be leaders in scale and technology but also take responsibility for rule-making, standard-setting, and ecosystem building. On the other hand, it provides a new development direction for numerous small and medium-sized enterprises—how to collaborate with leaders and find their own value space within the ecosystem.

Over the past decades, China’s manufacturing industry has quickly taken the global stage through scale advantages and development speed. But to move forward more steadily and further, it cannot rely solely on these strengths. What is more crucial is that the industry gradually forms a mechanism of common evolution based on trust, rules, and long-term vision.

At a time when competitive logic continues to evolve, this way of thinking beyond enterprise boundaries may be the true starting point for China’s manufacturing industry to enter a higher stage of high-quality development.

Text | Zhou Qiang
Editor | Ma Zhenmin

Reprinted from: Havard Business Review