The Development Status of China's Auto Parts Industry

In the past two decades, the development of China's Auto parts factory has driven the parts market. However, behind the total growth, the living environment of Chinese parts and components companies is not optimistic, which has affected the development stamina of the entire auto industry and has become the main obstacle facing the auto industry in the process of becoming stronger.

The total output value of the auto parts industry accounts for half of the total output value of the auto industry. However, under the condition of the same input cost, the net profit of foreign-funded enterprises is more than double that of domestic-funded enterprises. This is due to the "small and scattered" characteristics of domestic auto parts enterprises. The repetition of domestic auto parts companies, with many scattered plants, small scales, and lack of core technology. This is in contrast to the global procurement, system development, and modular supply trends adopted by the international auto industry, which also causes huge cost differences. , Coupled with the traditional domestic consumption concept of "foreign moons being rounder" and the repeated tightening of the national export tax rebate policy, make local auto parts manufacturers difficult.

Of course, the domestic automobile industry chain still has a relatively large room for improvement under the goal of being complete, independent, complete and controllable. However, the industry chain has shortcomings, the comprehensive strength of the enterprise is insufficient, the upstream and downstream support is insufficient, and the brand premium ability is poor. Although the scale of the domestic parts industry continues to expand, most of it is homogenized vicious competition and price competition, mainly due to insufficient investment in enterprise innovation and weak product core competitiveness. At present, domestic parts and components companies are basically at the low end of the "V"-shaped industrial chain, and key high-profit core parts and components are basically monopolized by foreign-funded enterprises, which has become a serious shortcoming in the automotive industry chain.

At the same time, these multinational parts and components companies have built a complete system in China from technology development, training, production, and sales, and they have begun to integrate their investment in China in accordance with the best division of labor and layout. And the current good development trend of China's auto industry has also allowed foreign component companies to accelerate their expansion in China.

Faced with the increasingly intensified contradiction between supply and demand, the development of the auto parts industry is in urgent need of transformation and upgrading, and the industry reshuffle is inevitable. Significant changes are taking place in the automobile industry. The growth rate of automobile demand has declined, consumption upgrades have accelerated, and independent brands have generally begun to develop positively. These put new requirements on component manufacturers.

Now, vigorously developing innovative products has become the consensus of many enterprises. The state should provide preferential policies for outstanding enterprises with development potential, and support these enterprises to improve their independent research and development capabilities and expand their production scale as soon as possible. In addition, Chinese auto parts companies need to rethink how to accelerate their expansion, focus on global resource integration and layout, integrate superior resources, merge duplicate assets, and get rid of excess and backward production capacity. It is urgent to establish a batch of large local parts enterprise groups that adapt to market demand, possess core technologies, value innovation, flexible mechanisms, and have international competitiveness, and use key enterprises to drive product upgrades and technological improvements in the auto parts industry.

In addition to improving quality and controlling costs, domestic Motorcycle parts factory companies will also need to go overseas, and thus grasp related technologies, open up new markets and increase profit margins.