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Domestic auto parts companies both opportunities and challenges

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2010 China's auto parts sales grew about 44%, 37% higher than the growth rate of vehicle sales reached 1.644 trillion yuan in 2011, total sales will reach 2 trillion yuan. Broad market space and industry high profits attract a large number of foreign influx, the world's top 20 auto parts suppliers many of whom have entered the Chinese market, China parts enterprises are facing major parts companies from around the world between the domestic industry challenges and brutal competition.

Domestic parts and components enterprises are more concentrated in the low end products

At present, Chinese auto parts companies a total of 2 million more than the auto parts enterprises above designated size was nearly 8000. However, very few actually achieve economies of scale, industry is very fragmented, competition is mainly reflected in the cost of cheap labor and resources. Local parts enterprises generally lag behind their own R & D and production capacity, operation and management level is not high, and low-tech, product convergence, in particular the lack of major car assembly and key components of the core technology. Local parts enterprises accounted for 80% of the total number of parts manufacturers, while sales only has 20% and 90% concentrated in the low-end. The rapid development of the market, we do not establish a scientifically sound supporting procurement standards, lack of core technologies, standardization is not high, and lower prices from OEMs and transfer risk, and many other issues restricting the pace of development of the domestic parts companies, especially small and medium enterprise development, the situation is more serious parts, is worrying.

It should be noted, the current pattern of international auto parts industry pyramid-shaped, the spire is a system supplier, the tower is a module supplier, parts supplier base is the corresponding distribution of profits from high to low, China's auto parts industry as a whole in the bottom position, low profit margins, survival pressure. Components in the production of domestic brand consistency and reliability, and the gap is very obvious compared to foreign companies, industry standards are inadequate. Although the mechanical parts we have developed the ability, but the reliability is poor, material technology, heat treatment not as foreign brands, quality management needs to be improved. Meanwhile, in the fuel system and braking system technologies are not yet a breakthrough, the production level of less than vehicle equipment requirements, the basic control in foreign hands. Even if the shape of the domestic market more than 60 parts manufacturers, manufacturing technology, and there are also a wide gap between the industry as a whole still lags behind the international advanced level in at least 10 years. At this stage, the average R & D investment in China parts enterprises accounted for only 1.4% of sales revenue, far below the international average of 6.6%. Therefore, only relying on the existing level of technology, really wants into multinational global procurement and supply chain system, there are no small difficulty.

Second, the price of the vehicle parts business down auto parts suppliers shift to market risk is more prevalent. Zero in the car the whole package, the OEMs have the absolute right to speak, for some technical content, low barriers to entry lower prices of parts enterprises wanton delay payment of the settlement was particularly serious. auto parts enterprises have to face rising raw material prices and labor costs rise, but also by the vehicle manufacturer's price pressure, the majority of enterprises in the smokeless "delay war" has been the suffering, but unfortunately had to abandon the R & D investment struggling to support. Slowdown in the domestic auto market this year sales decline in sales, vehicle prices down accessories trend intensified. As for the financing of small and medium parts of the business has been difficult to even worse.

Vehicle parts business enterprises should strengthen exchanges and cooperation with 

The future of China's auto industry, is likely to moderate from the rapid growth into a period of growth or even stagnation, which means that structural changes in China's auto industry is about to come, auto parts industry will also begin within the survival of the fittest.

2007 to 2008, when China's auto industry is capable of producing 128 qualified companies, to 79 in 2010 to become last year. Two to three years time, China has a number of companies qualified automobile production decreased by 30%. In the new energy vehicle development boom, the corporate restructuring will be further strengthened. Restructuring of the automotive industry has a strong demand. Industrial restructuring is much more than the government's call, but our businesses, particularly enterprises with a resource area occupied by a very good way.

Currently, the car companies and auto parts manufacturers have not formed a strategic relationship, if the formation of this relationship, the vehicle research and development car, and parts enterprises to make technical requirements for a simultaneous development, can achieve an unexpected effect, But now look at the domestic parts manufacturers and car companies almost no cases of synchronous development.

Thus, the domestic car companies to assume responsibility for the development of business cooperation with the auto parts, only the interaction in the model developed parts enterprises in order to improve R & D capability. Therefore, the proposed vehicle companies and R & D capabilities to parts enterprises to establish strategic partnership to form a win-win situation.

News from ET Power Machinery Co.,Ltd
Edited by Siren

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