China's auto parts industry overview and trend analysis


1. Automotive industry development

The automobile industry is one of the largest and most important industries in the world. It has a large proportion in the manufacturing industry and has a strong leading role in the development of related industries. It has high industrial correlation, wide coverage, high technical requirements, and comprehensive With strong characteristics, numerous parts and components, and large added value, the automobile industry has become a pillar industry of the national economy of developed countries such as the United States, Japan, Germany and France.

Over the past 50 years, especially since 2000, China's auto industry has achieved rapid development. Its position in the economy and its contribution to industrial growth have increased significantly. It has become one of the pillar industries of China's national economic development. By 2012, the national production and sales volume of automobiles were 19,218,800 and 19,306,400 respectively, an increase of 4.63% and 4.33% respectively over the same period of last year. Production and sales reached a record high, ranking first in the world for four consecutive years.

China's auto industry sales revenue growth


2. The development of auto parts industry

(1) Development of China's auto parts industry

Auto parts are the basis for the development of the auto industry and are an important part of the auto industry. According to the degree of specialization, the output value of auto parts accounts for 50%-70% of the total vehicle output value. Therefore, the sales and retention of the vehicle market determine the market demand for auto parts. China's auto parts industry has grown up with the development of the auto industry. In 1994, China formulated the "China Automobile Industry Industrial Policy," and the auto parts industry ushered in precious opportunities for development. After 2000, with the rapid development of China's macro economy and the increase in per capita purchasing power, cars have begun to enter the family in large numbers, and the auto parts industry has ushered in a period of great development.

The boom in the Chinese automotive market has driven the rapid development of the parts and components industry. According to the National Bureau of Statistics, from 2003 to 2009, the average growth rate of China's auto parts industry's total industrial output value remained at over 20%. From January to November of 2009, the sales revenue of China's auto parts industry reached 1.05 trillion yuan, an increase of 25.52% over the same period of last year. In 2010, China's auto and parts industry continued to maintain a good development trend. From January to November 2010, the auto parts industry realized sales revenue of 1.50 trillion yuan, a year-on-year increase of 42.25%. In 2011, the main business income of auto parts manufacturing increased by 10.35%. As of the end of October 2012, there were 9,260 auto parts manufacturers in China. Due to the slowdown in the growth of the entire vehicle in 2012, the development of auto parts slowed down. From January to October 2012, China’s auto parts sales revenue was 1,796.543 billion yuan. The year-on-year increase was 12.26%.

China's auto parts industry sales revenue growth


(2) Categories and Characteristics of Auto Parts Market

The auto parts market is generally divided into the vehicle market and after-sales service market.

Since entering the 21st century, vehicle manufacturers in the United States, Japan, Germany and other developed countries have shifted from the traditional vertical management and the pursuit of a large and complete production model to a specialized production model that focuses on streamlining institutions and developing complete vehicle projects. While expanding the scale of production, major auto companies have gradually reduced the auto parts production rate and implemented lean production methods. The needs of automakers for auto parts are increasingly dependent on external independent component suppliers, and they place higher demands on them. On the one hand, component suppliers must have a relatively large production scale to meet the requirements of large-scale production of the main engine plant; on the other hand, they must have a relatively high level of technology and work closely with the main engine plant to participate in and take part in the development and production of the main engine. The design, development, manufacturing inspection, and quality assurance of related parts and components; at the same time, it also bears full responsibility for timely delivery and after-sales market services. Driven by the implementation of “streamlined” policies in the main plant and promotion and promotion of stringent requirements of supporting suppliers, auto parts companies are rapidly separated from the mainframe manufacturers, and they are also grouping, technological advancement, systemization of supply and globalization of operations. The direction of development.

Component suppliers are usually divided into tier-one suppliers, tier-two suppliers, tier-three suppliers, and other multi-level relationships according to the supply relationship with the vehicle manufacturers. The first-tier suppliers directly supply products for the OEMs, and the two parties form long-term and stable cooperation relationships. The second-tier suppliers supply products to the OEMs through the Tier 1 suppliers, and so on, and the lower the level, the level of supply. The more quotients there are.

Due to the strict quality requirements of automotive products, some international organizations, national and regional automobile associations have set standards for auto parts product quality and its management system, and auto parts suppliers must pass the evaluation of these organizations (ie third-party certification). ), may be selected as a candidate supplier by the host plant, and the host plant further evaluates (that is, the second party certification), and the review will be accepted as a member of the host plant global procurement system, and finally the two parties sign the business contract to become supply. Business. As a host plant and a higher-level component supplier, under normal circumstances, only rarely choose the exclusive supporting supply strategy, but on the basis of selecting a major supplier, at the same time there are multiple suppliers to provide them with stable and reliable products. .

The after-sales service market is developed with the continuous growth of automobile consumption and consumers’ increasing awareness of the maintenance and maintenance of automobiles and parts. Users are consumers who already own automobiles and belong to the retail market. The products are mainly through chain stores, Stores and conversion plants are sold to consumers. This requires suppliers to have unique design capabilities, rapid response capabilities, able to adapt to multi-species, low-volume market demand, and have a good sales channel and after-sales service system.

China's after-sales service market is in its infancy, but it has great potential for growth.

(3) China's auto parts business classification and market matching model

1) Classification of China's auto parts enterprises

The organizational relationship between China's auto OEMs and parts and components companies is broadly divided into two types: one is that a parts and components company belongs to a whole vehicle company, and the company becomes a wholly-owned subsidiary after the enterprise is restructured; the other is an independent professional production company. In recent years, independent parts and components supporting companies have become a development trend, and their market share has rapidly expanded.

Classification of China's auto parts enterprises


2) China's auto parts market matching model

At present, the main categories of domestic cars are divided into self-owned brand cars, Japanese cars, U.S. cars, German cars, and Korean cars. Different car lines have their parts suppliers exhibiting different characteristics:

China's auto parts market matching model


From the perspective of whether or not to choose an independent supplier, almost 100% of American cars are supplied by independent suppliers, followed by European and Japanese. In independent models, the proportion of independent suppliers is about 80%, and the remaining 20% ​​are The host company has the capital relationship with the company.

From the perspective of the capital relationship between auto parts companies and automakers, the supporting suppliers of the joint-venture OEMs are mainly foreign-funded parts enterprises, especially Japanese cars. The supporting system of Japanese cars is extremely closed: Japanese suppliers are mainly Japanese suppliers, accounting for about 80% of the suppliers. However, in recent years, in order to further reduce procurement costs, many joint-venture vehicles, including Japanese cars, have started to use more reliable independent auto parts companies for support.

From the perspective of participating in the research and development of new products, joint ventures require component suppliers to participate in product design early in the development of models, and automakers have begun to attach importance to parts suppliers participating in the research and development process. In each sedan car series, Japanese cars valued the manufacturing capabilities, degree of cooperation, history of cooperation, and capital relationships of the component suppliers. The European-style cars paid more attention to product R&D and technological innovation capabilities; U.S. cars made more initial offers. Value; independent brand companies have less control over the production process of spare parts companies.

(4) Factors Influencing the Development of China's Auto Parts Industry

1) The favorable factors

1 National Industrial Policy Support

China has identified the automobile industry as a pillar industry of the national economy. Maintaining growth, adjusting the structure, and expanding domestic demand are also long-term policies to promote the sustainable development of the national economy. As a durable consumer goods, the automobile contributes more and more to the total social consumption. The automotive industry involves a wide range of industries, a long industrial chain, and large consumer spending. The rapid development of the automobile industry is of great significance to the promotion of the national economy.

2 Per Capita GDP Growth and Increase of Urbanization Rate

With the increase of per capita GDP and the increase of urbanization rate, more and more residents have joined the ranks of being able to purchase and consume cars, which has become an important factor in promoting China’s automobile consumption in the future.

3Relevance between the auto parts industry and the development of the entire vehicle industry

The development of the auto parts industry is closely related to the development prospects of auto vehicles. Judging from the mature automobile market development experience in Europe and the United States, the scale of the vehicle and parts scale in the auto industry is 1:1.7. As of the end of November 2010, the scale ratio of China's total vehicle and auto parts is approximately 1:0.76. Larger space.

4 Transfer of international procurement to China

In the cross-border procurement of auto parts, China is the most important low-cost target country. Due to the competitive pressures in the domestic market of the host country and the need to reduce costs, vehicle manufacturers in Europe, the United States, Japan and other mature automobile markets have increased their share of auto parts procurement in China every year, and multinational companies of auto parts have also shifted their orders to China. From 2003 to 2008, various types of procurement centers established by multinational automobile manufacturers in China were close to 500. The low-cost advantage makes the transfer of international procurement to China and brings new market opportunities for China's auto parts enterprises.

2) Unfavorable factors

1 The small size and low concentration of OEMs have limited the scale advantages of parts and components companies. Although the production capacity of China's OEMs has been greatly improved in recent years, the absolute number of production batches of various models is still limited, making parts and components companies more competitive. It is difficult to achieve economies of scale, reduce costs, and increase investment in R&D, which in turn leads to a reduction in the cost of the entire vehicle and a lack of competitiveness in the international market.

2 Late start, weak R&D capability, resulting in insufficient international competitiveness

Compared with advanced countries in the automotive industry, China’s auto parts industry has insufficient R&D investment and R&D capabilities, which limits the simultaneous development capabilities of parts and components companies and new models of automakers, resulting in weaker competitiveness in the international market.

3 The growth of the automotive industry slows down

The auto parts industry is highly dependent on the entire vehicle industry, and its development cycle is highly consistent with the entire vehicle industry. In order to respond to the international financial crisis, China has issued relevant industrial stimulus policies. Although the automobile industry has benefited greatly from this growth, the stimulating effect of the policy has been declining. A large number of consumers have been spending ahead of time to enjoy the relevant tax relief. At the same time, the international auto industry is relatively sluggish, and weak demand in overseas markets has placed pressure on the export of auto parts. Therefore, the auto parts industry may decline due to the slowdown in the vehicle market.

4 industry profit rate decline

Relative to the entire vehicle industry, the bargaining power of the auto parts industry is relatively weak, and the prices of most parts and components have a downward trend. However, the price of raw materials fluctuates frequently and the overall trend is upwards. Therefore, auto parts manufacturers are under heavy dual pressure. According to the statistics of wind information, in recent years, the overall sales gross margin of the Chinese auto parts industry has been less than 15%. It is predicted that in the future, with the maturation of production technology, market competition will be fiercer, and the profitability of parts and components companies will be further affected. Only by continuously developing new products with high added value, exerting economies of scale, and improving technological innovation capabilities and product levels can we maintain Higher sales prices and profit levels.

3. Related industrial policies

The auto parts industry, as the upstream industry of the auto industry, is the foundation for the development of the auto industry and is the industry that the country has long supported in its development.

The "Development Policy of the Automobile Industry" promulgated by the National Development and Reform Commission in 2004 clarified that "through the implementation of this policy, China's automobile industry will develop into a pillar industry of the national economy before 2010, and make greater contributions to the goal of building a well-off society in an all-round way. "This policy also makes the following requirements for parts and related industries:

“Auto parts companies must adapt to the development trend of international industries, actively participate in the product development work of the main engine plant, formulate special development plans for parts and components, provide classified guidance and support for auto parts products, and guide social capital to the auto parts production field, prompting The parts companies with comparative advantages form specialization, mass production and modular supply capabilities, which are synchronized with the automotive industry."

The "Eleventh Five-Year Plan Outline for the National Economic and Social Development of the People's Republic of China" puts forward: "Rejuvenate the equipment manufacturing industry, revitalize major technical equipment, raise the level of the automotive industry, and strengthen the strength of the shipping industry." In April 2005, the four ministries and commissions of the Ministry of Commerce formally promulgated and implemented the “Measures for the Administration of Imports of Auto Parts that Constitute the Characteristics of Complete Vehicles,” and strictly stipulate the procedures for importing auto parts that constitute the features of the entire vehicle and the features of the constituent assembly (system). It will help improve the localization rate of auto parts. In order to meet the needs of China's auto industry adjustment and development in the new situation, in August 2009, the State General Administration of Customs, the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Commerce jointly issued the Decree No. 185, “Administrative Measures for the Import of Auto Parts that Constitute the Characteristics of the Vehicles. "The announcement was abolished.

In December 2006, the “National Development and Reform Commission’s Notice on the Structural Adjustment of the Automobile Industry” issued by the National Development and Reform Commission pointed out: “In support of the accelerated development of parts and components industry, breaking the blockade between regions that are not conducive to auto parts and components or between enterprise groups. Gradually establish an open and competitive component system with different levels of technology.The state supports the development of auto parts industry clusters in regions with conditions; encourages auto manufacturers and parts and components companies to jointly develop vehicle products; The company’s leading companies are on a scale-to-scale level, carrying out cross-regional mergers, alliances, reorganizations, and forming large-scale component enterprise groups for both domestic and foreign markets, and local governments and relevant departments must formulate effective and effective measures to support domestic backbone component companies to improve their products. R & D capabilities".

On March 20, 2009, the State Council promulgated the “Regulations for the Adjustment and Revitalization of the Automobile Industry”, proposing the implementation of a proactive automobile consumption policy, stabilizing and expanding the automobile consumption demand, promoting the optimization and upgrading of the automobile industry structure, strengthening the goals of independent innovation, and adopting reductions. Passenger car purchase tax, carry out "cars to the countryside", accelerate the retirement of old cars, eliminate unreasonable regulations for canceling purchases of cars, promote the reorganization of the automobile industry, implement new energy vehicle strategies, and accelerate the construction of urban road traffic systems. Measures to achieve the revitalization and development of China's auto industry.

The executive meeting of the State Council held in December 2009 decided to extend the tax reduction policy for vehicles with low-emission passenger vehicles of 1.6 liters or less to the end of 2010, and reduce the collection by 7.5%. At the same time, the Ministry of Finance raised the trade-in replacement standard and issued a document in early 2010 stipulating that trade-in subsidies and 1.6-liter or less passenger vehicle purchase tax reduction policies can be enjoyed at the same time, which will further stimulate national car consumption, especially Consumption of economy cars.

The "Twelfth Five-Year Plan for National Economic and Social Development of the People's Republic of China" clearly states that it is necessary to rationally guide mergers and reorganizations of enterprises, increase industrial concentration, and develop large and medium-sized enterprises with internationally renowned brands and core competitiveness. This also means The reorganization and merger of the automobile industry will increase again.

The above major industry policies show that the national industrial policy has positioned the automobile industry as one of the pillar industries of the national economy, and the country has long encouraged the development of the automobile industry. As the foundation of the automotive industry's upstream industry and the development of the automobile industry, the auto parts industry is in a very important position in our national economy.

4. Auto Parts Industry Competition

Since the financial crisis, in order to promote consumption, in 2009 the state introduced a policy of halving the purchase tax for household appliances, cars to the countryside, trade-in replacements, and passenger cars with a displacement of 1.6 liters or less. Affected by the stimulating auto consumption policy, car consumption in 2009 ended in a downturn, and there have been “blowout” growth for the past two years. At the same time, it has played a significant role in the development of the auto parts industry. In the future, with the continuous expansion of the Chinese auto market and the effect of the gradient transfer of international industries, China's auto parts industry still has good room for development. As of October 2012, China’s auto parts sales revenue was 1,796.543 billion yuan, a year-on-year increase of 12.26%. China's auto parts production companies are generally small in scale, with large numbers and low industry concentration, which weakens the bargaining power of upstream and downstream industries. According to the standards of international operation, the output ratio of complete vehicles and parts in the automotive industry should be 1:1.7. From January to November 2010, the total sales revenue of the entire automobile industry in China was 1.97 trillion yuan. The sales revenue of the industry is 1.50 trillion yuan, and the scale ratio of the two is only 1:0.76. The overall size of China's auto parts and components is relatively small, which is a big gap with the international industry standards.

The self-sufficiency rate of auto parts production of China's large vehicle manufacturers is high (more than 70%). Parts supply mainly comes from its wholly-owned, controlled, or equity-owned subsidiaries, and it relies less on professional auto parts manufacturers. In recent years, with the formation of specialized supply systems for auto parts, specialized and large-scale auto parts companies have gradually become important strategic partners for vehicle manufacturers. At present, the major sales channels of Chinese auto parts enterprises include the complete vehicle market, maintenance market and export market. Among them, the matching market is the main target channel for large-scale auto parts manufacturers, through its own scale, technology, brand, capital, and management. In terms of advantages such as the establishment of a stable cooperative relationship with the vehicle manufacturers, the company will create competitive advantages. For manufacturers with weak scale, capital, and technical strength, they can only produce OEM products for large parts and components companies at home and abroad. The product sales are mainly based on the maintenance market, and the channel stability is poor.

In terms of international competition, the international transfer of the automotive industry and the formation of global parts procurement systems have provided a good environment for the growth of China's professional parts manufacturers. Due to the rapid development of China's auto industry and its significant low-cost advantages, China’s auto parts exports have continued to grow rapidly since 2000. However, the competitive advantages of China's auto parts manufacturers are mainly reflected in low-cost aspects. Currently, they do not have the ability to produce high-value-added, high-tech products. The dominant parts are mainly concentrated on traditional small parts, featured products and high value-added products. less.

On the whole, the development of China's auto industry provides a huge market space for the parts and components industry. However, due to the rising prices of raw materials and the intensified market competition during the rapid development of the industry, the profitability of the parts and components industry is limited. From a long-term perspective, given the upgrading of consumption by Chinese residents, the auto parts industry has a promising market.



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