Editor's note: Over 10,000 local components are at the low end. Where are their strengths going upstream? Self-innovation, market ups and downs, policy tilt, or relying on vehicle partners? Their choice to a certain extent determines the auto brands The realization of strategy.
Occupy more than 80% of domestic parts and components companies, while sales only have 20%, and 90% are concentrated at the low end;
Local components that have always been backed by prices are under pressure from the “sandwich effectâ€, that is, high-end product development is subject to technical pressure from developed countries, and product cost advantage is subject to low price pressure from emerging countries;
A variety of parts and components supply, the supply chain is not strong, parts factory is in a disadvantageous position, the vehicle manufacturer and parts factory lack of a sense of responsibility for a win-win situation;
In the context of the global auto parts industry's difficulties in 2009, foreign-owned parts and components companies have accelerated their strong expansion in China and are inclined to develop independently. Their strategy in China is gradually changing from a relatively equal "cooperative type" between China and foreign countries to " Control type."
- This is the dilemma of nearly 20,000 domestic parts and components companies in China described in a recent report.
The 200-page "China's Automobile Industry Status Quo, Problems, and Policy Suggestions" report was prepared by the Ministry of Industry and Information Technology of China in 2009 and was organized and written by dozens of companies and scholars. It took eight months. In early 2010 it was delivered to executives of various companies.
The rise of foreign investment
According to the forecast data released by Roland Berger International Management Consulting Co. in March this year, the profit rate of global auto parts suppliers will drop sharply in 2009, and the pre-EBIT margin may be zero.
This cruel reality has accelerated the strong expansion of foreign-owned component suppliers in China, and along with China's accession to the WTO, the restrictions on the ratio of foreign shares of China’s auto parts and components have been fully liberalized, from the fourth quarter of last year to the present, including GKN, BorgWarner, Globally renowned parts and components companies such as Johnson Controls have established wholly foreign-owned or joint venture factories in China.
Only the Bosch family invested 18 companies in China in a wholly-owned or controlled manner. Of the 19 new foreign-invested parts and components companies that were established in 2007, 74% of them chose sole proprietorship. Timken, the world’s third largest and largest bearing company in the United States, has successively acquired the Chinese shares of the original Yantai joint venture plant and the Chinese partner of the Wuxi joint venture plant since 2001, and has gradually taken over the joint venture’s shares. The reporter learned that SAIC, FAW, Dongfeng, Chang'an and other large auto companies are also facing the challenge of foreign capital to expand the shares of joint venture parts companies.
According to 2005 surveys by relevant domestic research institutions, 46% of multinational automotive companies’ R&D investment in China tends to establish independent R&D centers, and 33% of companies tend to introduce more advanced technologies, with 25% of companies. Plans to expand the number of existing R&D staff in China, and 24% of companies choose to cooperate in R&D.
According to the "Report," because the "Automotive Industry Development Policy" has removed the restrictions on the ratio of investment in auto parts companies, it has not paid enough attention to the tendency of foreign investment holding or sole proprietorship. The transnational capital has a "profit-driven" nature. , Foreign-invested holdings and sole proprietorships will bring about stability problems in China's domestic deep-seated and long-term development, and will become important issues affecting the sustained and healthy development of the auto industry.
Low-end "sandwich effect"
According to the data, in China, 72% of the auto industry’s auto parts companies accounted for 72% of the entire industry. Of these foreign suppliers, 55% owned foreign-owned enterprises and 45% of Sino-foreign joint ventures, meanwhile, foreign capital also controlled Most of the market share, the sales revenue of domestic-funded parts and components only accounted for 20% to 25% of the entire industry.
In addition, the key technology market is also almost monopolized by foreign companies. The data shows that in the production of key components such as automotive EFI systems, engine management systems, ABS and airbags, the proportion of foreign-funded enterprises is 100%, 100%, 91% and 69% respectively. Imported automatic transmissions are The share on the domestic market is also as high as 78%. At present, the key technology market for auto parts is also almost monopolized by foreign companies. “In the vehicle control system part, ABS is still not developed by Chinese suppliers. At the same time, common rail systems and EPS (Automobile Power Steering System) are all technical thresholds.†The members of the China Automobile Industry Advisory Committee and the automotive industry are well-known. In an interview with the media, expert Chen Guangzu said that in the past two years, the market share of domestic suppliers in this sector has dropped from 30% to 20%.
Although the national industrial policy sets a standard for the localization rate of foreign-made brands, the foreign investment in the domestic core components such as parts and components and high-end products occupies a monopoly position, and foreign investment in the supply of domestic OEMs Obviously prevailed. On the contrary, domestic parts and components companies face low-tech and relatively low profitability. "At present, there are about 1,000 automotive filter manufacturers in China, but basically they are all working for foreign brands." Chen Guangzu said that 100% of the filter paper used in automotive filters needs to be imported. If it is The European and European papers with higher density and breathability are more demanding, and domestic manufacturers can only do more after-sales service.
In the implementation of State III's technical route, foreign-funded high-voltage common-rail technology has occupied an absolute “overlord†status. Almost all domestic heavy-duty truck manufacturers adopt the technology in the process of implementing State III, and almost All in all, choose a joint venture and cooperation with foreign countries, or directly introduce it for my own use.
For the industry in the past, it is generally believed that new energy vehicles may become a breakthrough point for China's auto industry to achieve leapfrog development. However, since 2008, China has begun to adopt more and more imported key components and parts in new energy vehicles.
It is precisely because of the above-mentioned major factors that, according to the investigation of the National Information Center, it is very difficult for a complete Chinese-funded enterprise to enter the first-tier suppliers of joint venture products, of which 100% of the component suppliers selected by the US-based models in China have a foreign capital background. Enterprises, while the German, Japanese and domestic self-owned brand models also accounted for 88.9%, 89.5% and 52.8%, respectively.
“The long-term development model based on 'price' eating has also determined that it is difficult to change the profit share of Chinese-owned parts and components companies,†said Chen Wenkai, CEO of Gasgoo.com. It is understood that in 2008 China's parts and components industry scale was 950 billion yuan, of which 39.4% was concentrated in foreign-funded parts and components companies, and the average individual company’s output value was 310 million yuan, while the average production value of the vast majority of private-sector companies in the parts and components industry was only 30 million yuan.
This situation is very worrying. On the one hand, joint ventures or sole proprietorships, after achieving the advantages of scale in advance, are also moving to the lower end. For example, Bosch has developed parts and components specifically for low-end vehicles to cater to the matching requirements of self-owned branded auto companies that are increasingly moving toward the high-end market. In addition, China's own brands have gone up collectively. This is likely to make China's local parts and components companies, which previously had their cost advantages, face a new round of market crisis.
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Insecure supply chain
At present, Chinese parts and components do not seem to have gone out of industrialization. “Wanxiang, Fuyao Glass and other companies are really making big scales and profits are very impressive, but in this round of parts information technology revolution, they haven’t transformed into new grade companies and are still doing Traditional low-end accessory projects, said Chen Wenkai.
According to the report, there are about 20,000 auto parts enterprises in the country. Due to the lack of a well-structured and rationally-divided industrial structure, the market is fragmented, the capital is dispersed, the talent is lacking, the product level is not up, and the competitiveness of the company is lacking. The state had taken key support and concentrated investment measures and played an active role, but under the tide of large inflows of foreign capital and diversified investment, regulation and control weakened, resulting in an irrational situation in the production of dozens of parts and components. .
The vehicle development of China's self-owned brand companies is still in its infancy, and its product R&D capabilities are relatively weak. The training of component R&D capabilities and the improvement of technology are still not obvious. Parts Factory and OEM have not established long-term cooperation, common development and mutual benefit and strategic cooperation. At present, there is often an unstable supply and demand relationship, and there is a supply of parts and components. The supply chain is not strong. The parts factory is in a disadvantageous position, with large market risks, poor economic returns, product upgrades, and slow development of the company. The vehicle manufacturer lacks management guidance and technical support for parts and components factories; lacks the system requirements for simultaneous development and joint design; and lacks a sense of responsibility for mutual benefit.
The development of parts and components is affected by the main body of capital, supporting systems and administrative regions, and the industry is severely divided. Corresponding to foreign investment holding and sole proprietorship, with the entry of major automobile manufacturers in Europe, the United States, Japan, and Korea into China, under the constraints of different standards systems and driven by different interest targets, a new closed supporting system has been formed. The fundamental differences in the interest objectives of different capital entities and different supporting systems have resulted in the decentralized development of China's auto parts industry and severe fragmentation, which has greatly limited the formation and release of parts industry clustering and scale effects. At the same time, the combination of a foreign-funded closed supporting system and foreign-controlled and wholly-owned parts and components enterprises also provides facilities for foreign companies to transfer profits to foreign companies.
The most important policy support
The report suggests that in the current financial crisis, the state must give policy encouragement and strong support to the auto parts industry, especially key spare parts and automotive electronics industry.
Including the development of a special development plan for the automotive electronics industry. Automotive electronics technology is the core technology of the automobile. 70% of the technological progress and innovation of the automobile industry originate from the development of automotive electronics technology;
Formulate supportive policies to cultivate key domestic spare parts enterprises to improve their level of technological research and development and their core competitiveness. At present, the average R&D investment of Chinese parts and components companies only accounts for 1.4% of sales revenue, far below the international average of 6.6%. Therefore, it is recommended that relevant state departments put forward key catalogues of key components and parts that support R&D, and give policy support to domestic companies in R&D investment in fiscal, taxation, and finance.
To establish a state-of-the-art front-end, basic R&D platform for the core technology of parts and components. The state gives support to R&D investment, contracts with vehicle companies, research institutes, and parts and components companies to achieve the tripartite benefit of R&D results;
Further strengthen the construction of auto parts export bases. It not only has great significance in promoting the sustainable development of the auto industry, but also helps ease the domestic overcapacity and accelerates the structural adjustment of the auto industry; it also helps enterprises to improve their independent innovation capabilities and develop their own brands; helps regulate export order and protects knowledge. property;
Focus on encouraging domestic-funded enterprises to acquire overseas key advanced technology and spare parts enterprises and overseas R&D institutions to provide support and assistance in terms of policies and funds.
Local Minority Parts
Domestically owned parts and components companies have competitive advantages in some key components and most non-key components. Traditional products such as car stereos, automobile tires, engine parts, etc., with the continuous improvement of the technical level and product quality, and the continuous enrichment of varieties, have great export potential in the international market.
Some domestic auto parts companies started from imitating foreign products, actively introduced and digested international advanced technology and management experience, and their independent innovation capability continued to increase, and they entered the international first-class host supporting market.
Wanxiang Group: It is currently one of the largest professional production bases for auto parts and components in China. Wanxiang has grown into a modern enterprise group with four listed companies and an annual output value of over 30 billion yuan, and has entered the United States General Motors and other host market. It is a successful move of Wanxiang Group to expand the development space through overseas M&A. In August 2001, Wanxiang Group acquired UAI, a U.S. listed company. "UAI" is one of the major suppliers of brakes in the US automotive repair market. In 2003, Wanxiang acquired a 33.5% stake in Rockford, a US-level component supplier, and became the largest shareholder.
Huayu Automotive Systems: Shanghai Bus Industry (Group) Co., Ltd. officially changed its name to Huayu Automotive Systems Co., Ltd. in April 2009. The overall transformation from the bus business to the independent supply of auto parts business has been achieved. The total capital stock has increased from 1.47 billion shares to 2.58 billion shares. It is the listed auto parts company with the largest market value in the A-share market. A total of 23 parts and components companies were injected into Huayu Automotive through asset replacement, all of which were first- and second-tier component suppliers.
Fu Ao Auto Parts and Components: With a total assets of RMB 3 billion, the company mainly manufactures auto parts products such as environmental control systems, chassis systems, steering and transmission systems, safety systems, and engine attachment systems, and its supporting capacity exceeds 1 million vehicles. Mainly for FAW Group, Shanghai Volkswagen, Shanghai General Motors, Dongfeng Shenlong, Shenyang Huachen, Guangzhou Fengshen, Chery Automobile, China National Heavy Duty Truck, North Mercedes-Benz and more than 40 vehicle manufacturers, OEM support. The company's annual sales revenue exceeds 10 billion yuan.
Dongfeng Electronic Technology: It is a listed company that focuses on R&D, manufacturing, and sales of auto parts. The controlling shareholder is Dongfeng Motor Co., Ltd., which accounts for 75% of the company's total share capital. In 2008, the operating income was 1.168 billion yuan. Divided into three bases: Shanghai, Hubei, and Guangdong.
Wan'an Group: Founded in 1973, it is a joint-stock company that integrates science, industry, trade and industry. The headquarters of the company is located in Zhuji City, Zhejiang Province. In 2007, it had sales of RMB 102.991 million. The main products of the company are: automotive electronic control systems; automotive brake systems; automotive steering assist systems; automotive clutch control systems; automotive engineering plastics and other products. And in the Americas, Australia, Western Europe and Southeast Asia and other countries and regions set up marketing outlets.
Hangsheng Automotive Electronics: As the only domestic-funded company that was shortlisted for the top 10 manufacturers in the Chinese automotive electronics market, Hangsheng has maintained a rapid development momentum in recent years. From the product point of view, audio and video entertainment system products are still the main products of Hangsheng. Hangsheng is currently the largest manufacturer of car audio and video entertainment products in China. Its own brand products have established a firm foothold in the Chinese market. At the same time, Hangsheng also There are a large number of automotive audio and video entertainment products exported to foreign countries.
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Cross-country component companies occupy the core market
Most of the world’s leading auto parts companies have set up joint ventures or wholly-owned auto parts enterprises in China, gradually occupying the mainstream of the domestic auto parts market. The core competitiveness of these foreign and joint ventures is a strong financial and technological advantage. At present, joint ventures and wholly foreign-owned spare parts enterprises account for more than half of the production of some key components and some non-key components. In some components (such as anti-collision radar, light bulbs, air suspension, torque converters, The proportion of production in engine management systems has even reached 100%.
Joint ventures and wholly foreign-owned spare parts enterprises have also established a number of technology centers in China while investing and setting up factories in China. They have carried out localized R&D activities and have created “spillover effectsâ€, which have promoted the improvement of China’s auto parts industry’s ability for independent innovation. The gap between China's auto parts level and foreign countries has been shortened. In the past two years, the change in the strategy of multinational companies in China has tended to monopolize technology and brands. In the auto parts sector, the proportion of capital-control methods and even sole proprietorship is increasing.
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