Internal and external problems
Although 4 months have passed, many people still vividly remember the 12th Beijing International Automobile Industry Exhibition. In this exhibition, Bosch , Continental , Alpine, Hoffman, Hankook and other international parts companies once again appeared in a glamorous manner. In contrast, domestic auto parts companies have no choice but to take advantage of this. Because, similar to past exhibitions, the domestic auto parts exhibition area is still not the protagonist.
According to the reporter's understanding, these international parts and components companies are not only full of enthusiasm in the exhibition, but also are favored in the domestic vehicle market and mainframe manufacturers. For example, the Bosch ESP system has become the first choice for BYD's many cars, and the selection of Michelin tires is an important bargaining chip for many car companies.
Not only that, most of these international brand companies have already achieved localization in China. Relevant information shows that at present, the world’s top 20 auto parts companies have all set up offices or investment holding institutions in China. For example, Delphi has established 15 joint ventures in China and produced 100 auto parts and related systems. It has become the strongest auto parts manufacturer in China's market. When domestic parts and components companies compete with foreign companies on the same stage, they are currently in a weak position because of difficulties in their technology, management, and other aspects.
Not only is there an outside trouble, there is also internal misery
For parts and components manufacturers, many companies suffered heavy losses in 2012 due to heavy losses caused by price cuts in OEMs and rising prices of raw materials and labor costs. According to data compiled by Gasgoo.com on auto parts companies, among the 67 auto parts companies listed on the Shanghai and Shenzhen stock exchanges, there were 41 companies with a drop in net profit, and another 6 parts companies suffered losses.
“The entire vehicle market has been 'reversed', and it is certain that the cost will be partly passed on to the accessories companies. If the accessory companies do not have the exit door, then who will sell the products for production?†said a BYD Auto sales manager reluctantly told reporters. "Even if it is a domestic vehicle company, basically only mid-range and low-end cars choose domestic-made parts, which everyone in the industry knows well."
“In addition, local auto parts companies are mainly engaged in the production of labor-intensive and processing-type products. The current labor cost increases by nearly 30% every year. What is the profit rate of the company?†The downturn in the entire vehicle market, coupled with the weaknesses of the parts companies themselves, is a sure thing.
Vicious circle
Are domestic parts only available for low-end vehicles? the answer is negative.
“Taking our ASIMCO as an example, we produce car parts and also produce truck parts. Some of these products are joint ventures, some of which are for local companies. Our suppliers include some well-known international companies. This shows that our Chinese company is entirely possible to supply world-class companies, not us." Ni Wei, president of ASIMCO International, stressed: "But we also recognize that we supply foreign goods compared with domestic ones." The quality may not be the same."
For example, Ni Wei said that ASIMCO has a factory that is a domestic crane and motor factory. This factory supplies both joint venture brands and local companies. However, the parameters of the same motor, domestic and international companies are not the same. Foreign companies require the number of start-ups to be about 100,000, while the Chinese enterprises require 50,000. "So we are the same factory, the same people, we supply different companies, the price of the product is different, which leads to the quality of our products are not exactly the same."
According to Ni Wei, not only ASIMCO Corporation has such a problem. The reason why such a problem arises is because domestic companies have entered a vicious cycle.
“As an example, we can see from last year’s report that China probably exported 850,000 cars last year and it could reach 1 million this year. The average selling price of these export vehicles is US$20,000, but the average selling price of the vehicles we import is. It's about US$40,000, and it's easy to see that our export prices are very low, and whether it's for our own-brand sedan or commercial vehicle, this price is down, which has led us from the OEM. The profit to the engine plant is very low, so that the amount of funds that can be invested by the company's R&D is very small, and it is very difficult to make the product quality meet the required level due to insufficient R&D.†Ni Wei said: “This leads to a vicious cycle, vehicle and Parts are of poor quality and low prices, and low prices have led to low levels of research and development."
In Ni Wei's view, in terms of the current status of the domestic parts and components industry, parts and components companies must accelerate their entry into overseas markets, especially the host market. “Because the ability of a country’s spare parts to sell abroad is a direct indicator of the degree of development of the country’s parts and components industry. The degree of development of the parts and components industry is an important indicator of whether a country is a car power. ."
"But at present, about 20% of our China's parts and components exports are likely to go through the after-sale market. There are also joint venture brands that are sold to their branches around the world. The proportion of Chinese local companies exporting to overseas host markets is very low."
R&D breakout
“The weakness of the core technology of domestic auto parts has already led to the hollowing out of the industry.†According to Jun Ping, chairman of Yuchai International, to break the hollowing out of the industry, the industry needs to strengthen its own key technologies and core components. R&D also requires the state to give high priority to traditional manufacturing.
In fact, as early as the beginning of February of this year when participating in the 2011 State Work Report convened by the State Council to ask entrepreneurs for a forum, Zi Ping made a statement to Premier Wen Jiabao: The state must further increase its attention, support, and guidance for the internal combustion engine industry. It is the development of core components that should be included in the national strategy and change the current situation monopolized by Western countries as soon as possible.
"The core components restrict the overall level of China's engine industry. If it does not develop, it will always be controlled by people. This is already a safety issue for the national industry. We must master the core component technology and move from a manufacturing country to a manufacturing powerhouse." Ping said that in recent years, Yuchai International has been adhering to the concept of R&D and simultaneous quality development in a down-to-earth manner. This has provided Yuchai with an opportunity to negotiate a new round of restructuring with an international super group. "And, in the restructuring and cooperation with the International Super Group, Yuchai has always had the right to speak. This has never happened before."
In fact, people in the industry all know that raising the level of research and development and ensuring technical support are the inevitable paths for domestic parts and components companies to break through. However, the problem of whether or not to continue to survive has been even more severely faced in the case of parts and components manufacturing companies that are poorly embroiled in poverty.
"Compared with previous years, the parts and components market is not very good this year, but I personally think that this is not a bad thing. Parts manufacturers can use this time to devote more energy to research and development, so as to adjust the product structure for the next year. It will lay a good foundation for the development of the automobile industry in the following year. In the medium and long term, China's parts and components industry can develop."
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