Under the background of global procurement of auto parts, China’s domestic parts and components companies are faced with the dual pressures of high-end products without competitiveness and higher labor costs for low-end products. In the future, those companies with technological advantages and scale advantages will establish a good brand. Greater room for development. Companies that acquire technology through overseas mergers and acquisitions and have a blood relationship with large automotive groups will achieve rapid growth.
The fundamental policy for China's spare parts enterprises to become bigger and stronger is to increase R&D and technology levels, and to upgrade the status of the industry chain, so as to effectively break through the industry bottlenecks and achieve rapid development. However, at present, China's parts and components manufacturing enterprises have fallen behind the international advanced level for at least ten years. In order to achieve a leap-forward development in the short term in the absence of talent and technology, it is necessary to rely on the power of capital. Therefore, in the future, there will be two types of enterprises that will achieve rapid growth. One is companies that acquire technology through overseas mergers and acquisitions, such as the recent acquisition of U.S. General Motors Nextee steering system by Beijing Pacific Century, and Weeping Power’s acquisition of French engine manufacturer Moteurs Baudouin. The other is a company that has a blood relationship with a large automobile group and uses its strength to achieve large-scale operations. The automobile industry adjustment and revitalization plan announced in 2009 also clearly stated that the entire automobile industry will be merged and restructured so that automobile enterprise groups with a production and sales scale of more than 90% of the market share will be consolidated within 10 companies. This trend will be transmitted to parts and components companies. Big auto group component manufacturers will achieve rapid development.
System and module suppliers and brands, technology manufacturers will stand out from the competition.
The structure of the international auto parts industry is pyramidal. The spire is the system supplier, the tower body is the module supplier, the base is the parts supplier, the corresponding profit distribution is from high to low, and China's auto parts industry is at the bottom of the tower. The profit rate is low and survival is under pressure. Therefore, those parts companies that actively expand their business to the top and move toward module suppliers or system suppliers, or those who focus on achieving technology upgrading or brand building in the spare parts sector, will stand out from the competition.
The fundamental policy for China's spare parts enterprises to become bigger and stronger is to increase R&D and technology levels, and to upgrade the status of the industry chain, so as to effectively break through the industry bottlenecks and achieve rapid development. However, at present, China's parts and components manufacturing enterprises have fallen behind the international advanced level for at least ten years. In order to achieve a leap-forward development in the short term in the absence of talent and technology, it is necessary to rely on the power of capital. Therefore, in the future, there will be two types of enterprises that will achieve rapid growth. One is companies that acquire technology through overseas mergers and acquisitions, such as the recent acquisition of U.S. General Motors Nextee steering system by Beijing Pacific Century, and Weeping Power’s acquisition of French engine manufacturer Moteurs Baudouin. The other is a company that has a blood relationship with a large automobile group and uses its strength to achieve large-scale operations. The automobile industry adjustment and revitalization plan announced in 2009 also clearly stated that the entire automobile industry will be merged and restructured so that automobile enterprise groups with a production and sales scale of more than 90% of the market share will be consolidated within 10 companies. This trend will be transmitted to parts and components companies. Big auto group component manufacturers will achieve rapid development.
System and module suppliers and brands, technology manufacturers will stand out from the competition.
The structure of the international auto parts industry is pyramidal. The spire is the system supplier, the tower body is the module supplier, the base is the parts supplier, the corresponding profit distribution is from high to low, and China's auto parts industry is at the bottom of the tower. The profit rate is low and survival is under pressure. Therefore, those parts companies that actively expand their business to the top and move toward module suppliers or system suppliers, or those who focus on achieving technology upgrading or brand building in the spare parts sector, will stand out from the competition.
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