The auto parts industry is full of Chinese manufacturing charm

Five years, hard work; five years, accumulate. The high-fidelity Chinese auto parts industry has met the arrival of the "Nineteenth National Congress" with practical achievements.

China’s auto industry is on the path of becoming stronger and stronger. Despite the thorny land ahead, despite the vertical and horizontal roads, we cannot stop our progress. Behind the expansion of China's auto industry and the improvement of stability, there is support from China's auto parts companies.

The auto parts company is strong and Chinese brand cars can be strong. This is the Chinese dream of every Chinese automaker. For five years, this dream has become clearer and closer. In 2012, the number of parts and components companies above the designated size for the automotive industry in the country was 9,341, and the cumulative operating income for the year was 222.6 billion yuan, an increase of 11.97% over the previous year. By 2016, the number of auto parts enterprises above designated size has reached 12,757, and the cumulative revenue is 3.7020 trillion yuan, an increase of 14.23% over the previous year. Judging from the profit rate, the auto parts industry in 2016 was 7.68%, an increase of 0.84 percentage points from 2012.

Since the "18th National Congress", not only has China's total automobile production and sales achieved rapid growth, but the profitability of the auto parts industry has also been significantly improved. China’s auto parts companies, with their independent research and development capabilities as their core, continue to break the monopoly position of foreign-funded enterprises in key auto parts and components, and the marks of Chinese manufacturing and Chinese brands are particularly clear.

International status and brand power continue to improve

“If you don't go global, you can't lead the country. China's auto parts companies must develop globally if they want to be at the forefront of the world.” Zhao Guibin, chairman of China Aviation Automotive Systems Holdings Co., Ltd., entered the 2016 list of the top 50 global business leaders. A reporter of China Automotive News said. After CNAC acquired Nexteer, an internationally renowned steering system supplier, Zhao Guibin was promoted to Nexteer’s CEO and led Nexteer’s 71% revenue growth. AVIC Motor is therefore well known in the international market, and the integration capabilities and management capabilities of Chinese companies have also been recognized. Subsequently, AVIC Motor successfully acquired the United States Chad to realize the coordinated development of domestic and foreign markets in the field of steering systems and body accessories.

Since the "18th National Congress of the Communist Party of China," China's spare parts enterprises have completed dozens of large-scale overseas mergers and acquisitions under the situation that the international economy is fluctuating and China's economy is gradually strengthening. The world's second largest automotive sunroof company, Innafa, Pirelli, the world's fifth-largest tire manufacturer, e-Traction, Europe’s largest in-wheel motor company, the world’s leading Johnson Controls automotive interior business, global leader in active and passive safety, KSS, etc. It has been included in the capsule by Chinese companies Hainachuan, China Chemical Industry, Tianhai Group, Huayu Automotive, and Junsheng Electronics, and has effectively integrated with its related businesses or upstream and downstream resources.

"Every merger and acquisition is an extension of the globalization of existing businesses. Every time the layout is an upgrade of the industry chain." Wang Jianfeng, Chairman of Johnson Electronics, said that China's auto parts have achieved internationalization through overseas mergers and acquisitions. The essence of development.

At the same time, some companies with advanced technology and investment capabilities have chosen to build plants overseas. In October 2014, the Fast Thai plant was completed and put into production. Now it has become the preferred transmission supplier for Volvo's commercial vehicles in Southeast Asia. At the beginning of August this year, Fuyao Glass invested RMB 3 billion and established Fuyao International Holdings in China. In order to fully integrate Fuyao Glass's overseas business. With the advancement of international status and brand awareness, China’s leading independent parts and components companies have entered a new stage of internationalization that integrates global resources.

Industrial policies intensively issued regulations, standards have been improved

Since the "18th National Congress", China's auto parts industry policy has been upgraded to the national level, especially related to green environmental protection, energy-saving emission reduction and promote the healthy development of auto parts industry related policies. The "Opinions of the General Office of the State Council on Strengthening Energy-saving and Emission Reduction of the Internal-combustion Engine Industry" was released in February 2013. This is the first time that the State Council issued a document specifically for the internal combustion engine industry. It has raised the energy-saving and emission-reduction of internal-combustion engines to the national level, and proposed 11 passenger car engines, etc. Field energy-saving and emission reduction targets for internal combustion engines and six key demonstration projects.

The implementation of the fourth national emission standard for diesel engines was postponed from the first few months to the fifth national era, fully embodying the country’s determination to reduce the emissions of commercial vehicles and promoting the upgrading of industrial technologies, and promoted the promotion and popularization of advanced technologies for diesel engine and components of intake and exhaust systems. National standards for vehicle urea solutions, production technical specifications, and quality supervision and management regulations have also been introduced.

In the past five years, the auto parts industry policy has been intensively released to promote the healthy development of the industry. In September 2014, the Ministry of Transport and other 10 ministries and commissions jointly issued the "Guidance Opinion on Soliciting and Promoting the Transformation and Upgrading of the Automobile Maintenance Industry and Improving the Quality of Service", demanding that the monopoly of repair parts channels be eliminated and the original parts companies and manufacturers be encouraged to sell to the automobile aftermarket. Providing original accessories and independent aftermarket accessories with independent trademarks; on September 29, 2015, the “Measures for the Implementation of Open Implementation of Automobile Maintenance Technical Information” jointly formulated by the Ministry of Transport, the Ministry of Environmental Protection, and the Ministry of Commerce was officially released. Pave the way for the marketization of automobile maintenance and repair; on January 1, 2016, the "Rules for the Implementation of Recall Management Regulations for Defective Automotive Products" was formally implemented, further clarifying the obligations of auto product producers as the main body of recall, and increasing the production of auto parts and components. This is also the first time that China has incorporated component producers into the vehicle recall system.

A series of national standards and regulations concerning the safety promotion of automotive products have also been implemented, including passenger vehicle tire pressure detection systems, in-vehicle air quality standards, and child safety seats.

For a long time, China's auto parts standards are still mainly followed by European and American markets. In the future, we hope to lead the global market. Breakthroughs have already occurred in the intelligent power grid, new energy vehicle power systems and charging fields.

In March of this year, China Automotive Technology and Research Center and Zhejiang Asia-Pacific Mechanical & Electrical Co., Ltd. jointly established the “Intelligent Net Alliance Automotive Independent Innovation Standards Research Base”. Both parties will work on the construction of the smart gridlink automotive common basic technology, test evaluation and standards system. Joint research and in-depth cooperation were carried out to fill the gaps in the standards of the domestic automotive intelligent networking technology.

â–  Deepening supply-side reform and accelerating industrial restructuring

"Supply-side reform cannot be separated from the demand side." According to Tan Xuguang, deputy to the National People's Congress and chairman of Weichai Group, this is the key to accelerating industrial restructuring in the auto parts industry.

Since the 18th National Congress of the People's Republic of China, auto parts enterprises, especially diversified large-scale enterprise groups, have made outstanding achievements in promoting the adjustment of industrial structure and realizing the adjustment of the company's product structure. Tan Xuguang said: "Weichai is no longer a simple engine company, but a multi-industry group related to the engine." Weichai has driven strategic deployment around "supply-side reforms" with innovation, and achieved "after the market downturn" V-type reversal, as a multi-industry group with a scale of 100 billion yuan, has embarked on a path of transformation from a traditional manufacturing enterprise to a technological innovation-oriented group.

The diesel engine industry is the most prominent auto parts market that deepens supply-side reforms and accelerates industrial restructuring. After a period of rapid progress, the diesel engine industry began to adjust to shocks and reached the bottom twice in 2012 and 2015, resulting in adjustments in both the total market volume and the industry structure, as well as in the layout of the company's products. This has caused large fluctuations in the sales rankings of companies. However, during this period, the Chinese diesel engine industry followed the three major development laws of industry, economy, and technology.

Wei Anli, deputy secretary-general of the China Internal Combustion Engine Industry Association, believes that, like other auto parts industry segments, the reshuffling and structural adjustment of the diesel engine industry are also conducted under the economic environment of the supply-side structural reform advocated by the state, with excess capacity and resources. Problems such as repeated waste, low-end products, and insufficient motivation for transformation are being solved.

In the past five years, the development of auto parts companies has kept pace with the times, closely following the direction and pace of national policies. The research and industrialization of energy-saving and new-energy automotive technologies have received support from various countries. Pure electric vehicles and hybrid vehicles have entered a period of rapid development, and the proportion of energy-saving and lightweight auto parts in the product structure has begun to increase significantly. At this stage, Shaanxi Fast Automobile's traditional commercial vehicle transmission business accounted for more than 70% of the revenue. On this basis, Fast has embarked on the road to the “5221” strategic goal, and the future traditional mechanical transmission and domestic aftermarket sales. The proportion of revenue will be adjusted to 50%, sales revenue of intelligent and new energy products market will rise to 20%, international market sales revenue will rise to 20%, capital market and new business income will rise to 10%.

â–  Quality awareness, crisis awareness, global awareness, and win-win awareness have been fully enhanced

“Innovation, coordination, green, openness, and sharing”, the five major development concepts proposed by the Fifth Plenary Session of the 18th CPC Central Committee have been deeply implemented in the development of the auto parts industry. With innovation as the guide, Chinese auto parts companies have begun to raise their awareness of quality, to mark new stages in the development of global advanced technologies and advanced products; to meet the challenges of competitors in the global market with strong crisis awareness and global awareness, and to achieve global resource integration. It has developed together with independent R&D and innovation; with a win-win situation, it has strengthened the simultaneous R&D and technology reserves with suppliers and downstream customers in the upstream of the industrial chain, launched new business models, and built a community of interests to achieve a win-win situation.

Since the "18th National Congress of the Communist Party of China," China's auto parts and components have achieved a change from "quantity" to "quality". At the beginning of 2016, the Ministry of Industry and Information Technology released the “13th Five-Year Plan for Quality Management of Mechanical Industry”, implementing the national recommendations on quality planning, and accelerating the building of a manufacturing powerhouse. As a result, the state will upgrade the goals and requirements of “quality management” for machinery industry enterprises. To a new height. The auto parts industry is an important part of the machinery industry. The improvement of quality is the long-term strategy and goal of Chinese brand auto parts companies, and is the most important step for Chinese brand cars to become a global leader.

At the end of last year, Qian Hengrong, Secretary of the Party Committee and Director of FAW Jiexie Chai, won the "2016 China Outstanding Quality Person" honorary title. This was the fifth time since 2015 that Xichai had once again reached the peak of China's quality management field. Qian Hengrong said: "Quality is the life and life of an enterprise only once." The establishment of the three quality systems of quality and technology standards, quality management standards, and quality work standards has led to the improvement of the quality of Xichai. At the same time, the automation of production lines and intelligent production are important upgrade directions for auto parts companies such as Xichai since the 18th National Congress.

In the past five years, products such as Shengrui Automatic Transmission 8AT, Fast Retarder, ESC Electronics Stability Control System, etc., have challenged foreign brands in the process of industrialization. The autonomous parts and components companies have risen completely in automotive electronics control, advanced driver assistance technologies, engine and transmission source code development, and even the BeiDou navigation market. They have made breakthroughs time and time again and have demonstrated to the world the charm of Chinese manufacturing.

At present, China's auto parts system still has deficiencies, and there are still many problems in key parts and components technology fields that need to be broken. "With less complaints and more practical work," we believe that under the utmost efforts of independent auto parts companies, we will greet the "Nineteenth Congress" with more outstanding achievements and move toward a more brilliant future.