The characteristics of the global procurement of the automotive industry have enabled the battlefield of the industry to expand from a single market to an entire region. The competitors of the industry interface are not only domestic counterparts, but also counterparts in countries in Asia such as Japan, South Korea and Malaysia.
Relatively speaking, the auto parts companies in the Mainland are small in scale, and they only supply parts and components to a single depot. It is difficult to reduce the cost of enterprises through scale production. In addition, the technical content of products in the Mainland is low, and manufacturers are mainly concentrated in the secondary or lower scope of the supply chain, and product quality has not been guaranteed.
Although there are no shortages of scientific research personnel in the Mainland, R&D costs are relatively low, but companies are not adequately investing in R&D resources, accounting for an average of only 2% of turnover. R&D capabilities are mainly concentrated on basic mechanical components, and the development capabilities of electronic components still need to be strengthened.
At present, most auto parts manufacturers in the Mainland are still not ready to enter the global procurement system, and there is still no cooperation with the international automotive parts standard TS16949 quality system certification. However, individual large-scale manufacturers in the Mainland have already realized the relevant issues and launched overseas mergers and acquisitions, and have directly become part suppliers for major brands of automobiles. At present, the country has also set development goals and plans to raise the proportion of domestic vehicle-to-electronics cost-to-cost ratios to 40% next year, and increase the share of auto parts exports to the global auto trade volume within 10 years, from less than 1% at present to 10%.
In Hong Kong, there is no complete automobile industry, but the export of spare parts has been for decades. The scale of manufacturers covers a wide range. Large-scale manufacturers have specialized design and development departments to cooperate with their own brands to develop and develop high-value-added products. Small and medium-sized manufacturers play the roles of second-tier and third-tier suppliers and manufacture components such as signal lamps, security systems, audio equipment, and automotive molds. Overall, it can be said to cover all aspects of the entire auto parts supply chain.
The customers of Hong Kong manufacturers mainly come from the all-round supporting production of major car manufacturers in Europe, the United States, Japan and South Korea, and bring together the world's major automotive technologies. Since the manufacturer and the depot have established a tacit understanding, they can develop the required components according to the customer's technical requirements.
The Hong Kong SAR Government also actively supports the development of the local auto parts industry. In addition to assisting the industry through the Innovation and Technology Fund, it also supports various technologies, including the establishment of the “Hong Kong Auto Parts Research and Development Center†to assist SMEs. Transformation to meet the needs of the international market.
In view of the fact that global depots need to increase their cost-effectiveness, manufacturers in the cheaper Asian regions are pursuing non-core parts; auto parts suppliers in various regions are also paying more and more attention to R&D investment. In the face of increasingly fierce competition, the cooperation between relevant enterprises in the Mainland and Hong Kong will become an important direction for the development of the automobile industry in the future.
Due to the large number of scientific research personnel in the Mainland, the R&D capability is high, and there is ample and cheap labor force; the international acceptance of Hong Kong products is relatively high, and it has already become a member of the supply chain of the global automotive industry, and an international sales network has existed for a long time. Coupled with Hong Kong's advantage of free information, it will help us grasp the latest trends in the international market. By complementing each other's advantages and fighting against regional competition, the two companies will achieve a win-win result.