Global Sourcing Facilitates Our Country's Automotive Parts Industry

With the completion of the strategic layout of the international auto giants in the Chinese market, China’s auto industry, represented by FAW, FAW and SAIC’s three major auto groups, has basically completed joint ventures and restructuring with foreign partners, and has fully integrated into the international market competition. The parts and components industry that occupies half of China’s automobile industry has also accelerated its pace of entry into the international market and began to enter the global procurement platform. People in the industry believe that this development trend poses a severe challenge to China's auto parts industry, and it also brings a rare opportunity for development. In the long run, the benefits outweigh the disadvantages.

Miao Wei, general manager of Dongfeng Motor Co., Ltd., which recently completed a joint venture with Nissan, told reporters that, from a current point of view, China’s auto parts industry, with its comprehensive strength in technology, capital, scale, and self-development, at a disadvantage, is facing tremendous The competitive pressures, however, are not entirely without opportunities: At the same time that foreign parts and components are flooding into the domestic market, China’s auto parts and components with labor cost advantages have also obtained a large number of export opportunities. Through competition and cooperation with international auto parts companies, we can also promote the joint reorganization of China's parts and components companies, make them bigger and stronger, change the current situation of small, scattered, chaotic and disorderly competition, and enhance the overall competitiveness of the industry.

Global procurement will facilitate the expansion of exports of parts and components in China, increase the visibility and market share in the international market. Taking Dongfeng and Nissan as joint ventures as an example, according to the development plan of the joint venture company, by 2006, the annual sales of the company's automobiles will reach 550,000, of which the parts and components market will reach 32 billion yuan. If Nissan’s global auto production and sales volume is 5 million units, the parts market will have a larger capacity. Entering the global procurement platform, China’s auto parts products will gain more market opportunities and have great potential. Miao Miao said that due to the low cost of labor in the country, it has greater competitive advantages in labor-intensive and energy-consumption component products such as seats, bumpers, wire harnesses, aluminum wheels, glass, brake pads, clutches, and radiators. , mufflers, universal joints, etc., domestic products are often lower than the import price, not only can meet the needs of the domestic market, some can also be exported. For example, China's leading enterprises in the spare parts industry and Wanxiang Group have exported 1/3 of their total sales. The listed company's Hunan Torch has 80% of its products in the international market, and has achieved 15% of the US auto parts import market in terms of automotive brake systems, ignition systems, interior systems, car lights and other "auto parts". Its share enjoys high popularity in the U.S. market.

Global procurement is beneficial to China's spare parts enterprises to get rid of the past single, closed supporting system, and to integrate with the international market, and establish a product quality certification system in line with international standards. For a long time, China's spare parts enterprises have been supporting with domestic automakers, and their product sales channels have been single and closed, and they are highly dependent on automakers. When Santana first came to China, there wasn’t even a single component company in the country that could support it. Only tires, radios, speakers, external antennas, and small signs were available, which accounted for only 2.7% of the total parts. When domestic automakers began a joint venture with foreign companies to introduce new foreign models and more and more imported parts and components from the original supporting factories were used, domestic parts and components lacking uniform quality standards clearly showed an inability to adapt to the market. After the joint venture between Dongfeng and Nissan, part of the parts and components companies that entered the joint venture company faced the dilemma that the products could not meet the Nissan quality standards and could not achieve global procurement. Industry insiders believe that the high standards of safety, durability, energy saving and environmental protection proposed by global procurement will accelerate the integration of China's spare parts with international standards, accelerate the internationalization of China's spare parts product quality certification system, and increase participation in international market competition. Ability.

Global procurement will also promote mergers and acquisitions of domestic parts and components companies and joint ventures with foreign companies. It will become bigger and bigger, increase production concentration, and form a group of large-scale component enterprise groups with international competitiveness. At present, there are many parts and components companies in China, which are small in size, low in concentration and serious in disorderly competition. Relevant statistics show that there are 15,000 auto parts manufacturers in the country, with only 130 annual operating incomes exceeding 100 million yuan, and up to 2,700 below 500,000 yuan. The production costs are high and the overall efficiency of the industry is low. Entering global procurement will force some domestic parts and components companies with certain strengths to seek joint reorganization and joint ventures with foreign companies, expand their scale, increase their size, upgrade their technology, and increase their ability to resist market risks; while those with small scale, low technological content and no products Parts companies in the market will inevitably face the fate of being eliminated. Taking Shiyan City where Dongfeng Company is located as an example, the city has a total of more than 200 professional parts manufacturing companies supporting Dongfeng Company. After a joint venture of Dongfeng and Nissan, it entered the global procurement system. Since the end of last year, the city has selected 20 companies. There are competitive parts and components companies and Japan, South Korea and other Nissan supporting manufacturers joint venture and cooperation, there are currently 12 to reach an agreement with foreign parties, 2 officially listed; more than 100 companies seeking domestic cooperation, supporting domestic vehicle manufacturers, has now There are 22 companies that have reached a cooperation intention; some of them are small-scale and poorly competitive. They adopt overall transfer, lease, and other methods to implement the conversion and free market elimination.

At the same time, global procurement will also contribute to the promotion of the development and production of domestic key components such as electronic control, the establishment of a sales network system adapted to the needs of the international and domestic markets, and a service system in line with international standards, as well as the promotion of petroleum closely related to the automotive industry. The simultaneous development of industries such as metallurgy, chemical industry, machinery and electronics has great market potential.

Experts believe that at present, China’s auto parts and components technologies are still at a low level. After integrating into the global procurement system, there is still a long way to go before they become internationally integrated. This requires the state to establish a strong component industry as a Implement a major strategic goal, support industrial policy formulation, key technology research and development, and macro-control management, mobilize all positive factors, cultivate and set up a batch of key leading companies with international competitiveness, and do a better job. Large, fully participate in the international market competition and occupy a place in the fierce international market competition.