After years of rapid growth, China’s auto market has experienced abrupt changes in 2011, and the situation has turned sharply. Sales volume has hit a record low in the past decade.
When the auto market entered a turning year, when the growth rate was attributed to rationality, the auto parts industry in the upper reaches of the industrial chain also felt the chill of the market: the profit space was squeezed, the export volume declined, and the industry competition became increasingly fierce. The difficulties of small and medium-sized enterprises' survival... All kinds of internal and external pressures have caused the domestic parts and components industry to experience an unprecedented challenge in the beginning of the “Twelfth Five-Year Planâ€. Under this background, China's spare parts industry, which has developed for decades, has also had to start facing a new round of transformation and upgrading.
For many companies in the company, how to adjust the development strategy and operation mode and enhance the overall competitiveness in the face of challenges has also become the most important issue to be considered. Some companies have also carried out a series of useful attempts for this purpose. This also brought some new changes and trends for the parts and components market in 2011.
Profit space squeezed
In recent years, thanks to the rapid growth of the domestic auto market, the average profit margin of China's auto parts industry has remained at a relatively high level, and the ability to attract gold is second to none in the world. However, in 2011, due to the slowdown in macroeconomic growth, the withdrawal of stimulative policies, and restrictions on purchasing policies, domestic automobile demand was weak. On the other hand, due to the generally high expectations of the entire vehicle company before the market, many spare parts enterprises have prepared for expansion, and the continuous increase in the cost of raw materials, energy, and human resources has kept the profits of these companies at all levels. Hovering in the low post. At the same time, the decline in car sales has kept the price war among auto companies escalating. In order to ease their own cost pressures, many auto companies require parts and components companies to continue to cut prices, which also makes the company's already small profit margins were eroded again.
As a result, under the double pressure of internal and external factors, the average profit rate of the domestic parts and components industry began to decline. Data show that in the first three quarters of 2011, the average net interest rate of 68 listed companies with A-share parts and components was 6.3%, a decrease of 0.7% compared with the previous year. Of the 68 companies, there were only 20 companies with a year-on-year rising net rate, and 2 remained unchanged. The remaining 46 net interest rates all fell, accounting for 67.7% of the total number of listed parts and components companies. The listed companies are still the case. Small and medium-sized parts and components enterprises that are small in scale and lacking core competitiveness have encountered unprecedented operational difficulties. Some companies have even faced the dilemma of bankruptcy and restructuring.
Mergers and reorganizations are surging
For these small, weak and poor auto parts companies, the difficult life in 2011 kept them on the verge of being eliminated. However, for those large-scale enterprises with core competitiveness, 2011 has become a rare opportunity for development. These companies rely on their own technology, talents, scale, and capital advantages to start the industry's banner of mergers and acquisitions in the industry, and look forward to the formation of large-scale parts and enterprise groups in order to continuously grow their own strength in the new A round of industrial changes became bigger and stronger.
In this wave of mergers and reorganizations, it can be seen that major auto companies will separate their parts and components companies and form core component enterprise groups; they can also see some independent-scale parts and components companies that are eating small fish. Fish, fast fish eat slow fish, strong fish eat weak fish, etc., to grow as a system component supplier. As a result, when the tide of mergers and acquisitions of vehicle companies surged, the domestic parts and components industry ushered in a shuffle. With this process, the trend of the development of the auto parts industry in China is becoming clearer. According to relevant sources, the number of parts and components companies in China will be reduced by more than 70% in the future, and 20 to 30 first-tier suppliers with strong competitiveness and 250 to 300 second-tier suppliers will be formed. As well as 1300 to 1500 three-tier suppliers, the concentration of the entire parts and components industry will be further improved.
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