Luo Baihui: Auto parts industry will steadily advance in competition

Since the end of 2008, policies to stimulate automobile consumption have been introduced one after another, and auto consumption has entered an upward channel. According to incomplete statistics, in 2009 China's auto production and sales exceeded 13 million vehicles, the highest year-on-year growth, and China became the world's first automobile production and consumption country. Among them, under the influence of policy preferences, a total of 7,195,500 small-displacement passenger vehicles with a capacity of 1.6 liters or less were sold, an increase of 71.28% year-on-year, accounting for 69.65% of the total passenger car sales, and the growth rate and market share was a record high. In the following two years, car sales increased year after year, ranking first in the world in 2010. In 2011, the auto market was consolidating at a high level of 18 million vehicles. It is estimated that in 2012, the auto market sales will pass 20 million vehicles. This is mainly due to the government's response to the global financial crisis, such as the introduction of small-displacement vehicle purchase tax relief, car to the countryside, trade-in subsidies, and other policies "combination boxing", which contributed at least 10% increase for the auto market.

With the introduction of policies to restrict purchases and blockades in various cities, many people began to question the development of the auto industry. The sustainable development of the auto industry and maintaining a high growth rate have become the focus of attention of all parties. According to Luo Baihui, secretary-general of the International Mould, Hardware and Plastic Industry Suppliers Association, China’s auto production and sales in 2009 ranks first in the world for the following reasons: First, China’s economic growth is relatively small compared to other countries’ financial crisis; The strong measures taken by the State Council, that is, relying on domestic demand and consumption to stimulate the economy, made the Chinese automobile industry grow steadily and rapidly in 2009. In the next two years, sales of Chinese cars have been steadily increasing. In 2011, due to the increase in rectification efforts, automobile production and sales have cooled, coupled with a series of unfavorable factors such as the difficulties of small and medium-sized enterprises, the consolidation of the property market, and the stock market tangled up, which led to the decline at the end of 2011. It is expected that the growth of car sales in 2012 may slow down, but the overall sales volume will still increase.

In addition to policy influences such as restrictions on purchase, there is also an inseparable relationship between economic operations and car sales. Based on past experience and data, the CPI in 2012 will continue to decline slightly compared to 2011, and sales of cars will increase. On the other hand, the "Twelfth Five-Year Plan" emphasizes the significant increase in the income of low- and middle-income earners. Rural family income growth is still the policy focus, and the growth rate of per capita household income in urban households will also be improved. In the process of the recovery of urban residents' income, the income of rural residents has grown rapidly, and the people’s willingness to consume has started to increase. With the relaxation of macroeconomic policies, it will bring another round of automobile consumption peaks.

The scale of domestic autos is already the first in the world, and the huge market size and car ownership have also led to the continuous expansion of the auto parts market. On the other hand, the huge after-sales market demand also brings greater market development space for domestic auto parts companies. It is believed that in the next few years, China's auto parts industry will have more investment opportunities. Judging from the relationship between the industry chain, the boom of auto parts should be in line with the growth of vehicle sales, but this situation mostly appears in the mature and tending to saturation of the auto market. China's auto and accessories market is still in a rapid growth period, especially in the auto parts industry, mergers and acquisitions integration has just begun, regional leading companies are breaking through regional restrictions, and growing into a national leader; some companies are seeking to develop internationally. In such a process, successful breakthrough parts companies can often achieve adverse market growth.

In the international market, contrary to the continued increase in China’s external trade surplus, the deficit in auto product trade has risen. In 2010, it reached a record high of US$25.5 billion, including a total vehicle deficit of US$24 billion and a component product deficit of US$1.5 billion. .

According to incomplete statistics, the total output value of automotive products in China is now over 400 billion yuan, of which exports account for 50%. In response, Luo Baihui, secretary-general of the International Mould and Hardware and Plastics Industry Suppliers Association, said that the overall situation of China's auto parts products exports is good, the global market share continues to increase, and there is a clear shift in the export of auto parts products to higher-tech products. .

Academy of Social Sciences, China Industrial Competitiveness Report (2012) No. According to the Blue Book, according to the standards of the World Bank, China has entered into upper-middle-income countries in 2011, and China’s industrial competitiveness ranks first in the world. However, the report also shows that since 2011, China's industrial competitiveness has further weakened, and the competitiveness structure has not been significantly optimized. According to Luo Baihui, secretary-general of the International Mould and Hardware and Plastics Industry Suppliers Association, at present, the imported parts and components in the Chinese auto market are mostly high-tech, high-value-added key components, gearboxes, engines and other key components, accounting for 60 percent of the total. %. China's auto parts exports are mainly labor-intensive machinery such as wheels, wheels, steering knuckles and some electromechanical products. In fact, apart from the passive situation in the export of parts and components, in the three key parts and components technologies of the automotive industry, including engine, transmission, and chassis technology, Chinese parts and components companies still lag behind in transmission and chassis technology.

At present, the sales volume of automatic transmissions in China is estimated at several million units, and that provided by China's local parts factories is less than 20,000 units. The automatic transmission developed by China is basically zero. The field of transmission in China is basically started in 2003 and 2004. In the past few years, the development of a truly systematic system has become very demanding for automatic transmissions and automatic transmissions. Suddenly everyone has discovered that the automatic transmission is the development of the Chinese automobile industry. The bottleneck. Basically, we can't see China's automatic transmission products. Everybody can't go this way. Now everybody is desperately doing a transmission.

The significance of core components for vehicle companies is particularly important. During the financial crisis, the issues exposed by GM, Ford, and Chrysler’s three major American auto companies were typical. General powertrain technology relies on Opel. Ford’s powertrain technology relies on Mazda. After the financial crisis, it has made strategic adjustments and reinvested in powertrains. On the contrary, the powertrain technology of European auto companies is very powerful. After the financial crisis, it has benefited from the past, such as Volkswagen, and Ford and GM follow-up are also pushing turbocharged engines.

It will take 5-10 years for China's automatic transmission industrialization. If we do not accelerate the pace now, the Chinese auto industry will be subject to control. On the road to the development of automatic transmissions, Chinese OEMs are currently digesting their own things through commissioning, technology transfer, and transfer of intellectual property rights. This really requires a process. On the contrary, in the case of manual transmissions, China has already been in the stage of improving quality, and in recent years, the effect of development has been obvious, and the technology has matured. Luo Baihui further pointed out that in addition to the lack of core parts and components technology, China's parts and components industry is also facing three major challenges: the weakening of the cost advantage of independent components and the tightening of the standard regulations and the dual pressures on the technology and cost of independent component development. The popularization of modular production and synchronous development has brought higher and higher technical barriers to independent components.

Parts companies are critical to the development of the Chinese auto industry. If the independent brands do not master the core components and technologies, the most direct result is a very low profit margin. According to Roland Berger’s statistics, the current brand’s share of sales in the Chinese market is roughly one-third, but the share of sales accounts for 20%, and the profit is only 10%.

The development of China's spare parts enterprises should strive for the greatest support from the government in conformity with WTO rules, such as supporting the listing of manufacturing companies through various channels. In addition, international acquisition is also a way out. Similarly in the transmission industry, for example, in 2009 Geely invested a total of 70 million Australian dollars in the acquisition of DSI, including core technologies and R&D centers. After the acquisition, DSI set up factories in Xiangtan, Jining and Tongling by virtue of its automatic transmission technology. Product assembly Geely Vision, Emgrand, Meng copper and SUV, EC8 and other new models.

According to the latest data from the Ministry of Commerce, foreign capital controls most of the market share of auto parts sales, domestic sales of parts and components only account for 20%-25% of the whole industry, auto parts manufacturers with foreign backgrounds account for 75% of the entire industry. In the above, among these foreign-invested suppliers, wholly-owned enterprises accounted for 55%, Sino-foreign joint ventures accounted for 45%, and local components were mainly used for self-owned brand vehicles, which had a low market share. Luo Baihui analyzed that the trend of the international spare parts industry in 2012 is that strategic investors from emerging countries, especially China, are increasingly active in the global M&A trading market for auto parts, and the growth has been particularly rapid. This is from German-speaking regions (Germany, Austria). (Switzerland) The development of the M&A market is clearly reflected. At present, at least one Chinese investor is involved in any major M&A transactions in auto parts. It is worth noting that although M&A is an important opportunity for development, from a global perspective, more than 75% of M&A cases are unsuccessful. The unsuccessful reasons include unclear strategic objectives, excessive bids causing unreasonably overvalued purchase prices, and lack of effective measures after mergers and acquisitions, resulting in the loss of important personnel.

Due to the lack of independent research and development capabilities and core technologies, Chinese self-owned brand components can only use the resources and cheap labor to win the market. According to a survey, the profit of bicycles for many Chinese auto companies is below RMB 1,000. In the process of breakthrough in the mid-to-high end market, they were suppressed by foreign brands. The lack of technology and lack of brand power have caused many companies to fail. What is more serious is that while foreign brands stick to high-end, they further explore the low-end car market, making the original brand's original price advantage no longer exist.

Taking brake pads as an example, at present, 85% of the domestic car brake pads are dependent on imports. The markets that can be competed by the domestic automobile brake pads industry mainly focus on commercial vehicle brake pads, brake pads for medium and low-grade cars, and brake pads for miniature cars. . The automobile brake lining market can be divided into two categories: the matching market for the automotive main engine (including the designated maintenance station for the automobile main engine plant) and the after-sales service market. The market for main engine brake pads accounts for about 25% of the overall brake market. The market share of foreign-funded enterprises and imported brake pad products accounts for about 80% of the total supporting market; domestic-funded enterprises account for about 20%. In addition, local auto parts companies need to build their own brands in addition to strengthening their investment in technology research and development. Brands are the lifeblood of the company's long-term development. However, domestic auto parts companies have not done enough to protect trademark ownership in the auto parts sales and auto parts production and circulation areas. Trademarks as an important part of intellectual property rights are directly related to the vital interests of producers, operators and consumers. , is an important carrier for independent innovation capabilities and other intellectual property rights. It is responsible for the important role of protecting intellectual achievements in successfully entering the market and distinguishing sources of goods, and is the source of life for the company. Trademarks are the carrier of corporate wealth and also the carrier of corporate reputation. The biggest advantage of many foreign auto parts companies entering the Chinese market is that they have a certain brand influence in the market. Local auto parts companies must also attach importance to brand names and lay a solid foundation for the future development of the company.

Luo Baihui pointed out that it is worth noting that the trend of China's auto parts exports to high-tech products is significant. Among them, the export of steering devices has increased by 37.96% year-on-year, with the highest increase; exports of transmissions, power-driven axles and other products have exceeded the same period last year. 20%. In the future, the country will continue to focus on improving the performance, reliability, and longevity of auto parts, and promote the technological level of auto-innovation parts. Exports and import substitution are the market opportunities for parts and components.

In recent years, the country has continuously introduced policies to promote the upgrading of industrial technology and localization of key components. On November 25, 2011, the Ministry of Industry and Information Technology issued the “12th Five-Year Development Plan for Machinery Basic Parts, Basic Manufacturing Process and Basic Materials Industry”, including the timing chain of auto engine and automatic transmission, the Hava chain, and continuously variable transmission. Special-purpose continuously variable transmission chain, engine fasteners, high-end suspension springs for automobile and construction machinery, valve springs and stabilizer bars, high-precision automotive powder metallurgy parts, powder metallurgy oil-retaining bearings and other mechanical basic parts as development priorities to improve performance, Reliability and life are the main directions of attack, and strive to make it reach or approach the international advanced level.

Luo Baihui said that at present, some parts and components companies in China have entered the global vehicle supporting system, and the export business has become a very important part of the main revenue. At the same time, due to the national requirements for the localization rate of joint venture vehicles, the trend of localization of parts and components has been promoted, and a small number of parts and components companies have also possessed certain high-tech product research and development capabilities, and they have acquired import substitution competitiveness. In 2012, with the return of raw material costs for parts and components companies, the gross profit margin will bottom out. If the export growth trend continues, it is expected that the growth rate of auto parts will be higher than the growth rate of the entire vehicle.

It can be seen that 2012 is still a good year for the auto industry to recover. The auto parts industry will steadily advance in the competition.

Looking ahead to 2012, the bottoming out of the global economy has already begun. The Chinese economy will also “stabilize gradually in the continuous decline”. How to increase competitiveness in 2012? "Adjusting the industrial structure and transforming the mode of development" is the goal. Enhancing the core competitiveness of enterprises is the key. "Technology leadership and online shopping to win" are the paths. In terms of methods, the first is to change the competition model and improve service standards; the second is to use network information technology to open up the marketing channels for automotive products. This is not only the objective requirements of the market and development environment for the industry, but also the actual needs of the sustainable development of the industry. It is also the historical mission and responsibility of the industry given by the national strategy. For the black horse with the most potential in the auto parts industry, HC Auto Parts Network is a long way to go, sincerely wishing all employees to win the “stride for progress” victory in the new year and achieve better and faster Development, to better contribute to the sustainable development of the country's social economy!