New changes in the living environment of parts and components companies in 2010

In November 2009, the sales of automobiles exceeded 1.3 million. From January to November, the growth rate of the Chinese auto market was 42.4%, which was 4.7 percentage points higher than the 37.7% in January-October. These figures make the parts and components entrepreneurs who are fighting in the Chinese market feel good.

In fact, since the accession to the WTO, the assets of the auto parts industry have been increasing year by year, and the proportion of the total assets of the entire auto industry has increased year by year. In the subdivision industry, engines, chassis, tires, automotive electronics and other industries have maintained rapid growth over the long term. The situation. A large number of auto parts production and R&D bases have been established. Around the complete vehicle support and international markets, the Group has initially formed six auto parts industrial clusters in the three provinces of East China, Beijing, Tianjin, Yangtze River Delta, Pearl River Delta, Central China, and Southwest China.

The parts and components industry is closely related to the development of the automotive industry and occupies an increasingly important position. When the production and sales of automobiles went blowout in 2009, what are the challenges and opportunities faced by the parts and components industry in 2010?

Policy Beginess Hosting Market Will Continue to Grow

Purchase tax >> The policy to reduce the purchase tax for passenger vehicles with small displacements of 1.6 liters or less was extended to the end of 2010, with a reduction of 7.5%. The standard for subsidy for bicycle replacement for cars was raised from 5,000 yuan to 18,000 yuan;

Cars go to the countryside >> Extending the automobile to the countryside policy implementation to the end of next year, the motorcycle going to the countryside policy that has been included in the subsidy channels for vehicles to the countryside will be implemented until January 31, 2013;

Automobile trade-in replacements: The standard for subsidized bicycles for trade-in vehicles has been increased to RMB 5,000 to RMB 18,000.

The automobile purchase tax policy, which has contributed greatly to the production and sales of automobiles in 2009, was determined to continue in 2010. With the support of purchase tax preferential policies next year, it is basically no problem to achieve a 10% increase in output. The purchase tax concessions continue to exist, which can effectively control the sharp decline in car enthusiasm, avoid the ups and downs of the auto market, and have a certain role in helping the stable development of the national economy. In addition, 1.6L and below displacement cars are encouraged to fight high-emission cars with high fuel consumption, which is beneficial to adjusting the automobile consumption structure.

At the same time, the implementation of the automobile to the countryside and the increase of the old-for-new subsidies will further promote the increase in the production and sales of new vehicles.

From this point of view, the continuous increase in the production, sales, and quantity of vehicles will provide a certain degree of growth for the component suppliers' host market.

From the perspective of market segments, the support of medium and low-grade cars, cars with a displacement of 1.6L or less, and a small number of light trucks, micro-fabricators, etc. will continue to improve. The matching of passenger cars and trucks is basically in a stable stage.

From the information that the reporter understands from the market, at present, many orders for parts and components companies that focus on supporting markets have extended to 2010.

Merger and reorganization of entire vehicles temporarily does not result in large-scale supply chain changes

(The merger and reorganization here includes both vehicle and component manufacturers.)

As early as the introduction of the automobile industry revitalization rules, some experts predicted that the merger and reorganization of domestic automobile enterprise groups will become one of the most frequent phenomena in one year. In early 2009, after the concept of the "Four Big Four" structure was proposed, China's existing auto enterprise groups have begun to rush to try. Whether it is GAC restructuring of Changfeng, or the merger of Changan Group and AVIC, the government’s strength has played the most important role. According to the planning requirements, through mergers and reorganizations, 2-3 large-scale enterprise groups with production and sales scale of more than 2 million vehicles will be formed, 4-5 automobile enterprise groups with production and sales scale of over 1 million vehicles will be fostered, and vehicles with a production and sales scale of more than 90% of the market share will be cultivated. The number of enterprise groups has been reduced from the current 14 to less than 10.

The mergers and reorganizations that occur between complete vehicles and component manufacturers and between them will not cause significant changes in the supply chain of parts and components within 1-2 years as a whole.

There are two reasons:

First, the concentration of the vehicle market. Some media have analyzed the current composition and growth situation of China's vehicle companies. It is believed that the true scale integration between vehicle manufacturers still needs at least about 5 years.

Therefore, due to the large number of mergers and acquisitions of automakers and their integration of supply systems, the number of suppliers has been greatly reduced, which is not currently occurring on a large scale.

Second, local parts and components companies do not have the conditions for large-scale mergers and acquisitions. At present, domestic parts and components companies have basically completed their initial accumulation, and more companies are expanding their market share by establishing new plants to expand production capacity, increasing R&D strength, improving product structure, and acquiring or establishing raw material suppliers (plants) to reduce production costs. This stage requires a longer period of time. From a short-term perspective, it does not rule out the exclusion or merger of non-performing assets, but the parts and components industry will not undergo large-scale reorganization among enterprises.

From this point of view, there will be no large-scale changes in the parts supply chain in the domestic market for the time being. Due to the considerable market potential, there will even be a new increase in the number of parts and components companies.

Global purchasing China parts procurement advantages are losing

In the cross-border procurement of the automotive industry, China is the most important low-cost target country. Initially, the three major OEMs in North America were under pressure from their domestic markets to increase their procurement efforts in China, followed by their first and second-tier component suppliers, as well as large OEMs and first-tier suppliers from Europe. Invested into the army of China's procurement, the next commercial vehicle company and construction machinery company also joined the ranks. Of course, there are also some companies that have strong strategic capabilities. They started their global procurement strategy ten years ago and they have achieved extraordinary results, such as the German Bosch company.

However, with the rise in the price of raw materials, the increase in the cost of personnel, and the exchange rate of imports and exports, China’s low-cost advantage is losing its dominant role in the past. At present, international buyers are increasingly rational and practical in China's procurement by selecting and cultivating potential core suppliers; increasing their own logistics integration; strengthening communication with foreign-funded factories in China; and increasing the latter's enthusiasm for exports; dispersing procurement destinations, Contrast with other emerging markets to determine the purchase location and other methods to promote the process of China's procurement.

Summary: Although China's spare parts industry has made great progress in recent years, but from the perspective of the global market, China's spare parts industry is scattered, the degree of industrial concentration is not high, the vast majority of small-scale enterprises neither sufficient operating funds, and lack of R & D Ability, simply can not develop advanced products to meet market demand. These problems, such as inefficient structurality, have not only hindered the healthy development of China's parts and components industry, but also caused considerable restraints on the vehicle manufacturing industry.

Overall, China's spare parts manufacturing technology still belongs to the low-tech level. Some high-tech and core technologies are still in the hands of foreign manufacturers. The production of products such as shock absorbers, power steering, airbags, global positioning systems, and automatic transmissions is in an initial stage of development, and some are even in the starting stages.

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