Private-owned enterprises make cars to push China's auto parts companies into a “spirit”

The tide of private enterprises making cars that can be called the “Flying Fair” campaign has been vigorously launched throughout the country. This "car repair campaign" has pushed China's auto parts and accessories companies to the cusp of the storm.

For a long time, China's auto parts production has lagged behind. An expert from Changan Ford said that although some parts and components are provided by Chinese companies, major spare parts such as engines and transmissions must also be imported from abroad.

Take Chongqing as an example. According to the person in charge of the Chongqing Economic Commission’s Automobile Division, fewer than 10 enterprises that have passed the certification of international automotive product quality are currently qualified by the Chongqing automobile accessory enterprises, and the number is only 3% of Chongqing’s large-scale automobile accessory enterprises. More than 90% of Chongqing's automobile support enterprises are difficult to match with international automotive quality certification standards.

This means that the vast majority of automotive companies do not have access to the procurement system of GM, Ford, Chrysler and other auto giants. What we have lost is a large market with hundreds of billions of dollars.

China's auto industry is lagging behind in the insufficiency of vehicle production and the backwardness of supporting development. This embarrassing situation has greatly affected the development of the Chinese automotive industry.

According to expert analysis, the major reasons for the apparently low profitability of China's auto parts and components companies are the backwardness in the level of spare parts industry products and technological development capabilities, low industrial concentration, and generally low corporate scale benefits.

Most auto parts companies have weaker capabilities. Many of them are small-scale handwork processing plants. They have poor resilience, disperse manufacturers, low production capacity, low output, and the gap between quality and cost is still very large.

There are not many companies that have their own branded products. Many companies use electronically-controlled auto parts products such as EFI engines, transmissions, and ABS as selling points. Most of the core components are manufactured or matched by wholly foreign-owned or joint venture companies. There is basically no mastery of their own core technologies.

The low investment has also affected the strength and level of Chinese auto parts companies. Relevant statistics show that investment in the parts and components industry in the world is generally more than double that of vehicle manufacturers, while China is below 0.3 times; the annual development investment of auto parts companies in developed countries is generally 5 percent of sales revenue. X. In China, this percentage only accounts for 1%.

It is gratifying that some companies have already acted. This year, more than a hundred motorcycle and auto parts companies in Chongqing went to Detroit in the United States, signing more than 70 intentional cooperation projects with Ford, GM, and Chrysler. This is the first time that Chongqing companies have provided matching supplies for international auto giants.

According to the person in charge of the Chongqing Municipal Economic Commission, the three major automobile giants in the United States are seeking to transfer supporting manufacturers to China, and the western region has become the first choice. This is an excellent market opportunity for automotive accessory companies.

Experts from the All-China Federation of Automobile Manufacturers and Autonomists Association also stated that, under normal circumstances, multinational companies are purchasing matching products in the nearest regions of their vehicle manufacturers. Therefore, the world-renowned auto group invested and built factories in China, providing Chinese auto parts companies with a once-in-a-lifetime opportunity.

From this perspective, despite the difficulties, the prospects of China's auto parts and accessories enterprises are still infinitely exciting.