This year, China was among the first countries to sell 10 million cars annually. However, the development of auto parts has fallen far behind. Xu Changming, director of the Resource Development Department of the National Information Center, recently stated at a forum held in Chongqing that the main problems that have been plagued include industrial concentration. Low, no independent research and development capabilities, no brand advantage, high-end market is not competitive and so on. He appealed that the current situation of China's auto parts and components system is grim, and the integration is imminent. The state's policy of guiding mergers and reorganizations should be introduced as soon as possible.

Foreign companies exclusive high-end

Xu Changming pointed out that 82% of China’s auto parts companies’ sales revenue is below 100 million yuan (renminbi, the same below), 15% of the company’s sales revenue is between 1 and 500 million yuan, and only 2% of the company’s sales revenue range from 5 Up to 1 billion yuan, there are very few companies with sales revenue exceeding 1 billion yuan, and most of them are foreign-funded or joint-venture companies. Compared with world auto parts giants such as Visteon, Bosch, Magna, and Delphi, Chinese companies are too weak. Currently, 75% of China's passenger car companies are joint ventures. Basically, high-end parts and components are not produced in China. Chinese companies can only do low-end products.

At the same meeting, Dong Jianping, deputy secretary-general of the China Association of Automobile Manufacturers, said that because the current Chinese auto market is very good, many multinational companies will increase their competitiveness. Domestic Chinese-funded enterprises' weak R&D capabilities and small scale will restrict the development of China's auto industry. Countries such as energy conservation, environmental protection and safety regulations will be further stricter and their standards will be higher and higher.

The higher the pressure the higher the standard

He added that the strict implementation of relevant laws and regulations in various countries has exacerbated the urgency of technological progress in the auto parts industry in China's auto industry. These laws and regulations are on the surface of cars and are actually parts and components. China's spare parts technology has not progressed and the pressure is very great.

“In 2007, 8,000 automobile parts and components companies above designated size invested a total of 4.97 billion yuan in research and development, while auto parts giant Bosch in Germany invested more than 2 billion pounds in research and development, almost seven times the total investment in China. It is enough to see China's backwardness in independent research and development.” Xu Changming announced this group of data. Low industry concentration, lack of independent research and development capabilities, and no brand advantages are major problems that plague the development of auto parts in China.

National guidance mergers and reorganizations

In this year's series of plans for the revitalization of the automobile industry, the state has successively introduced relevant supporting policies for the merger and reorganization of vehicle companies and support for the merger and reorganization of automobile circulation enterprises, but there is no guidance policy for the integration of auto parts industry. "The current situation is grave and integration is imminent. If the parts and components system fails to grow during the rapid growth of vehicle sales, it will no longer be able to grow." Xu Changming said that the vehicle technology is relatively simple. Parts companies should also merge and reorganize.

Xu Changming suggested that the central and local governments can encourage some enterprises to integrate in the form of industrial alliances. For example, there are dozens of gear companies in Ganjiang, a western city of gears, and they can be integrated into several large-scale enterprises and share complementary resources. The government may also consider introducing policies to support mergers and acquisitions, such as giving preferential treatment in taxes and land use. On the whole, China's auto parts products have more opportunities than challenges. The most favorable key factor is the high growth of the market, which is not available in all countries. In terms of the Chinese market, it can produce and sell 13 million vehicles this year.