The development of auto parts in China faces five challenges

Time:2023-03-07
Category:Industry News

 "Weichai, Yuchai, Xichai and Fast, Fuyao Glass, Dicasta Wheels, Wanxiang, Ningbo Huaxiang and AVIC Parts, Hangsheng and Joyson Automotive Electronics and a large number of rising enterprises, as well as Changan, Brilliance, JAC, Chery, Sinotruk and other major automobile companies independently developed powertrain system parts, etc., these will be the backbone and foundation for the future development of China's auto parts." Recently, Ye Shengji, deputy secretary-general of the China Association of Automobile Manufacturers, said at the 2014 China Auto Parts Industry Annual Conference that the basic development trend of our country's auto parts is good, but the continuous expansion of the industrial scale will cause changes in the competitive pattern, and the development of Chinese brand parts enterprises will become more and more difficult in the future.

90% of Chinese brand parts are concentrated in the middle and low end

"The market share of Chinese brand parts companies is on a downward trend." Ye Shengji said at the meeting that according to incomplete statistics, the number of parts enterprises exceeds 10,000 (less than 6,000 large-scale enterprises). Foreign-funded enterprises (45% wholly-owned and 55% Sino-foreign joint ventures) account for 20% of the number of large-scale enterprises, and their market share reaches more than 70%. The market share of Chinese brand parts companies is less than 30%, of which 90% of their products are concentrated in the middle and low end.

Ye Shengji believes that in recent years, wholly foreign-owned and Sino-foreign joint venture parts have emerged rapidly, basically monopolizing key and core technologies, and Chinese brand parts have a tendency to be marginalized. Among the parts companies that master key and core technologies, more than 3/4 of the enterprises with foreign background account for more than 3/4 of the entire industry (40% are wholly foreign-owned enterprises and about 35% are Sino-foreign joint ventures), and non-core components are concentrated in Chinese brand parts enterprises. "The technical content of automobiles is mainly reflected in key and core components, and the development of parts enterprises has become the key to China's automobile industry becoming bigger and stronger." Ye Shengji said that in high-tech fields such as automotive electronics and key engine components, the market share of foreign capital is as high as 90%, of which the proportion of foreign-funded enterprises is more than 95% and 90% respectively for core components such as engine management systems (including electric injection) and ABS.

The development of the parts industry urgently needs top-level design

Due to insufficient R&D investment, lack of talents, poor technological innovation, and lack of original products, it is difficult for Chinese brand parts enterprises to compete with foreign advanced enterprises in terms of independent innovation ability and core competitiveness.

At present, the development of parts in China is facing many challenges.

First, at present, the country lacks systematic planning for the strategic transformation and upgrading of the auto parts industry, and lacks relevant supporting policies to encourage and support the R&D and production of key core components.

Second, in the face of increasingly strict national requirements for energy conservation, environmental protection, safety regulations, etc., and in the face of the continuous strengthening of quality requirements from vehicle enterprises, Chinese auto parts companies are facing the pressure to comprehensively improve quality.

Third, parts enterprises have the ability to develop synchronously with vehicle enterprises, which has become a basic requirement for entering the vehicle supporting system. In the face of the future, parts companies are required to have basic development capabilities as well as advanced technology development capabilities.

Fourth, some Chinese brand auto parts enterprises have insufficient understanding of the industry, lack of strategic planning, insufficient actual investment, the pursuit of short-term benefits, coupled with the lack of R&D, production, management and talents, etc., resulting in an increasingly large gap between the development of Chinese brand parts enterprises and foreign-funded enterprises.

Fifth, all parts companies have implemented ISO9000 and ISO/TS16949 certification to meet the requirements of automobile enterprises, but some enterprises have insufficient understanding of the purpose of obtaining certification, insufficient management system execution, poor system operation performance, and difficulty in ensuring the continuous stability of product quality.

In addition, the cooperative relationship between vehicles and parts companies has been discordant for a long time, and the cooperation between whole enterprises needs to be improved urgently. At the same time, the cooperation between parts companies and upstream industries also needs to be strengthened.

Under the new normal, China's auto parts industry must be transformed and upgraded to have a way out. Ye Shengji believes that in order to lead the healthy development of the auto parts industry, the future development direction of parts should be studied and determined as soon as possible, and the future development plans and goals of the parts industry should be formulated. By 2025, establish and improve the supporting supply system of parts with strong international competitiveness, form a basically complete product research and development system, and basically realize the strategic transformation of China's parts industry from manufacturing to creation.

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