This year marks the 30th anniversary of China’s reform and opening up. China’s auto industry has made remarkable achievements in the spring breeze of reform and opening up. As the basis of the automotive industry, China's auto parts industry has accumulated considerable strength in the course of 30 years of development, and it is currently supporting the production support of nearly 10 million vehicles in China.
In today's economic globalization, especially as the world economy is facing a recession and China’s economic growth is slowing down, it is necessary for the auto parts industry to calm down, review the roads that have been adopted in the past 30 years, summarize successful experiences, and draw lessons from failures. Clearly understand the situation, clarify the thinking, clarify the direction of future efforts, and meet new challenges.
Review and Thinking of Thirty Years of Reform and Opening up
After 30 years of development, the overall strength of China's auto parts industry has been greatly enhanced. Around the complete vehicle support and international markets, the country has formed six large parts and components production bases in the three provinces of East China, Beijing and Tianjin, the Yangtze River Delta, the Pearl River Delta, Central China, and the Southwest. And 11 national auto parts export bases. As of the end of 2007, China had 7,975 auto parts enterprises above designated size. The company's main business revenue was 799.4 billion yuan, and its exports were 109.2 billion yuan. Almost all parts and components can be manufactured in China and can meet China's commercial vehicles and high-grade passenger cars. More than 80% of parts and components of the car need to be localized. All these achievements have benefited from our country’s policy of reform and opening up, benefiting from our conformity with the historical trend.
However, while seeing achievements, we should also sum up the issues and learn lessons.
- The competitiveness of local enterprises is weak, the added value of product technology is low, and the price is low. The matching market for car parts and components is basically monopolized by foreign-funded enterprises. In the increasingly fierce market competition, foreign-funded enterprises have also started to implement low-cost strategies and their products have developed to low-end markets. The original price advantage of local companies gradually lost, the pressure increases, the market status has a declining trend, and survival will be more difficult.
- The cooperation relationship between the vehicle and parts needs to be adjusted. In a nutshell, there are currently three types of matching relationships in China's auto industry: European and American models, Japan and South Korea models, and China models. In the European and American model, there are a large number of multinational parts and components, and the overall strength is strong. Although it has strong independence, it maintains a close strategic cooperation relationship with the vehicle company. In the Japan-Korea model, the parts and components companies have almost no independence, and they maintain a close relationship with a single vehicle company. Although there are differences between these two models, there is one thing that is common: there is a very close strategic cooperation relationship between parts and vehicle companies. In the so-called China model, the supporting relationship between the vehicle and the spare parts is not stable. Both parties are often in a game state and have not yet formed a stable strategic partnership. The parts and components companies have always been in a weak position.
——Since the new automobile industry policy in 2004 abolished the restrictions on the ratio of investment shares of auto parts companies, the tendency of foreign ownership or sole proprietorship in the auto parts industry in China is relatively serious. We should have a correct understanding of this.
—— China's auto parts industry has no access threshold and is the industry with the highest level of openness and marketization.
-- China's spare parts companies are not making enough efforts to build brands.
Current situation and challenges facing China's auto parts industry
In 2007, China’s macro economy maintained a steady and rapid growth, and the auto industry maintained a good momentum of development. The total output value of the automotive industry for the year was approximately 2.18 trillion yuan, an increase of 32.68% year-on-year; of this, the output value of auto parts (including engines) reached 808.08 billion yuan, an increase of 39.24% year-on-year. The national auto industry's export delivery value was 203.524 billion yuan, an increase of 37.87% year-on-year; auto parts were 107.214 billion yuan, an increase of 22.19% year-on-year. The industry achieved a profit of 132.833 billion yuan, an increase of 64.49% year-on-year, of which parts and components had a profit of 57.633 billion yuan, a year-on-year increase of 64.36%.
The decline in the growth rate of the entire vehicle market will inevitably have an impact on the parts and components industry. The current situation is that many parts and components companies are under-employed and there is an increase in inventories and the situation that the purchase price cannot be recovered in time.
In general, from 2007 to the first half of 2008, while the Chinese auto industry maintained a relatively rapid development, the market competition became more fierce. The operating environment of local parts and components companies deteriorated and they faced tremendous pressure for industrial upgrading. Since the second half of 2008, due to the impact of the international financial crisis, China's auto industry has ended its rapid growth in the past decade, and its growth rate has begun to decline, indicating that China's auto industry will enter a period of steady development from rapid growth.
Implement scientific development concept and explore the healthy development of China's spare parts industry
In order to maintain sustained, stable, and healthy development, China's auto parts industry must implement the spirit of the 17th National Congress of the Communist Party of China and implement the scientific concept of development with parts and components companies as the carrier of practice. We must base ourselves on the reality that we are still at an early stage and take the scientific outlook on development as a guide to analyze the opportunities and challenges faced by China's spare parts industry in the context of economic globalization, and develop a situation that suits the national conditions and meets the needs of the industry. Chinese characteristics of auto parts industry development.
——According to the trend of history, find its place in the trend of economic globalization. The CEOs of our parts and components companies should establish a global perspective, objectively examine their own product levels, target markets, and the overall strength of the company to identify their own advantages and disadvantages.
- Open up to the outside world, strengthen cooperation with foreign small and medium-sized parts and components companies, and increase basic technical strength. For parts and components enterprises with certain economic strength in China, we should review the situation, seize the opportunity, and actively cooperate with foreign parts and components companies in technology, purchase products, process technology and key process equipment; for China's comprehensive strength of the parts enterprises group, Should be timely acquisitions or shares in foreign companies in troubled small and medium-sized parts and components, access to product brand, technology, lengthen the industrial chain, to achieve leapfrog development.
- Establish a common technical platform for key components. The current focus should be on electronic control technology and strive for breakthroughs in key technologies. At the industry level, the organization focuses on key enterprises, encourages scientific research institutions to participate in joint research, and at the enterprise level, actively cooperates with foreign research institutes to introduce technical talents including overseas Chinese and make good use of foreign companies in innovation and industry. Upgrade advantages.
-- Build a new type of zero relationship. Taking advantage of the upgrading of commercial vehicles in China, we will organize key component companies to participate in the synchronized development of the entire vehicle and rebuild a new strategic partnership between the vehicle and its components.
—— Improve the company’s own R&D capabilities. As an auto parts company, whether it is production parts or maintenance parts of the aftermarket, it should have a certain research and development capabilities.
——Improve the management level and lay a solid foundation for the company. In the current situation of slowing economic growth, we should look inwards, do our own thing, improve management levels, train personnel, lay a solid foundation, and prepare for the next round of economic growth.
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