Top 100 Global Parts List Rings China's Car Company

In the past three years, only one Chinese company has entered the top 20 global auto parts suppliers.

From January to May of this year, domestic automobile production and sales reached 8.003 million and 802.35 million, which was a year-on-year increase of 3.2% and 1.7% respectively. Despite the low growth rate, China is still the undisputed world's largest auto market. However, what does not match this “status of the rivers and lakes” is that the technological hollowing of the Chinese auto industry has not only failed to improve but has become more serious.

Recently, the "Global Top 100 Auto Parts Suppliers in 2012" list compiled by the industry media shows that China's spare parts suppliers who are fortunate to be on the list are only CITIC Daycare Wheels Manufacturing Co., Ltd.

There is a consensus in the automotive industry that without the strength of the parts and components industry, the prosperity of the auto industry can only be on the surface; without the leading technology components, the research and development of the main engine plant will be hollow. Nowadays, the development of auto parts in China is worrying. The problems are far greater than those of the main engine factories. It can even be said that this has become the weakest link in the entire auto industry.

In the author's opinion, there are two common drawbacks in the parts and components industry: First, China's auto parts companies are mostly small-scale, with low quality awareness and lack of competitiveness. At present, the domestic auto parts market has remained in the early stage of development, the situation is not standardized, the “three non-existent” products are full, the proliferation of counterfeit and inferior products, and the low degree of creditability have all constrained the healthy and stable development of the market.

Another big problem is the high production energy consumption and low value-added products. Most auto parts companies in China rely on vehicle manufacturers. They are in a passive service position and have relatively weak independent research and development capabilities. Although it has certain development capabilities in some low-value-added products, it is basically a blank in the development of key components.

At this stage, auto parts and components exported by China are still dominated by low value-added products (that is, “low gold content”) and sold abroad at low prices in exchange for sales growth. As a result, the export prices of the various parts and components companies have been piling over each other, resulting in a continuous increase in the number of exports, but the benefits have not been significantly improved, and it is difficult to truly open the international market.

According to relevant statistics, as of June 19, a total of 28 listed auto parts companies issued interim results announcements, and the sum of net profit of 28 companies fell by 22.42% year-on-year.

For parts and components companies, there is an image metaphor called "sandwich", which means that upstream raw material suppliers and downstream OEMs continue to shift cost pressures, making it difficult for parts and components companies to take a step. As profits have continued to shrink, parts companies have invested less in R&D and expansion of production capacity, and the gap with foreign rivals has increased. Even so, international anti-dumping complaints against China's parts and components companies are still increasing, further increasing the operating risks of parts and components companies.

"Best capital procurement with the best quality, the most advanced technology, the shortest delivery time, the best service parts" is the best procurement principle that global car companies follow, and is also being widely accepted by domestic OEMs. In recent years, many self-owned brand auto companies in China have started purchasing large quantities of foreign parts and components, further squeezing the survival space of China's spare parts companies.

All these things have made it clear that the overall improvement of the overall strength of China's parts and components companies is a matter of no delay. If there is a lack of countermeasures, the active support and correct guidance of the local parts and components industry may lead to the influx of foreign parts and components, making China a mere automotive assembly base. From the list of top 100 parts that have just been released, it is time to sound the alarm.

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