China's auto market has formed a market driven mainly by cars. This would have been a good thing. However, since April, both the sales volume and the price of cars have been declining this year, causing a series of problems. The embarrassing situation in which the entire vehicle and auto parts industry faces “opposition†is one of the most important issues.
The auto parts industry is miserable
When some media reporters talked about the situation in the auto market this year, they were worried about the decline in the auto market and the decline in prices. They were also happy that "the price of auto parts has gone up." In fact, this is caused by the lack of understanding of the auto parts industry.
First of all, we must correct two concepts. Strictly speaking, "auto parts" and "parts" are not a concept. In the industry, “auto parts†generally refers to the parts that serve the automotive aftermarket, and “parts†refers to parts that are specifically designed for the entire vehicle. Saying that “the price of auto parts does not fall,†actually refers to the price trend of parts and components.
Recently made some understanding to some auto parts manufacturers. According to some friends, the price of some of the parts and components that are used to supply complete vehicles has indeed increased a bit this year. This increase is not a gift to OEMs from automakers. It is that the prices of raw materials for components have risen so much that component manufacturers cannot afford it. After repeated negotiations or “fighting†with OEMs Only realized.
The relationship between China's vehicle (mainframe) plant and its parts and components companies is not as formal as it is in foreign countries: OEMs only deal with a small number of Tier 1 auto parts suppliers, and Tier 2 parts suppliers do not directly relate to OEMs. Only supply to Tier 1 parts suppliers; Tier 3 parts suppliers do not have relationships with OEMs and Tier 1 parts suppliers, but only Tier 2 parts suppliers. With the entire car to support a meal. Under such circumstances, the automaker started the “A, B, and C fixed-point supply system†in the late 1980s, provoking competition between parts and components companies. In order to get the OEM's "happiness" and obtain more matching items, the parts and components companies have rushed to push their competitors. Although some parts and accessories industry associations later brought together related companies and held “self-discipline for priceâ€, after all, their own interests were above everything else, and “self-discipline vows†eventually became an empty word. As a result, the supporting department of the automaker became an “uncle†and parts and components companies gradually became “grandchildrenâ€. Once the automobile market has experienced a decline in the trend, the first action that the vehicle manufacturer first thinks of and takes is to shift the pressure on the entire vehicle to lower the price, and require the price of the matching parts and components to be reduced. At the end of the last century, the Nabo Automobile market slumped, some state-owned parts and components companies collapsed, and the OEMs were forced to scuttle the prices of spare parts and parts, and after a few months of spare parts supply, they did not pay, causing the company’s capital to fall. There is a direct relationship.
In the past two years, steel and other raw materials have risen in price worldwide, and some have even doubled, multiplied, and scored, and the entire vehicle has continued to cut prices and continue to transfer price pressures on parts and components, causing parts and components companies to suffer Extrusion on both sides is really breathless. As a result, they have found supporting vehicle manufacturers and demanded price increases. One party wants to reduce the price of the other party, and the other party needs to increase the price of the other party. The auto manufacturer and the parts and components companies have formed a very sharp opposition, and it is very difficult to reach consensus. A veteran of a parts and components company said: “Parts and parts can get a five-point price increase from a complete vehicle factory. I don’t know how much to thank. The price of raw materials rose by several times, and dozens of times. Compared with the later purchase price, it is almost a cup of tea.†It is also learned that an A-class supplier with a component selected by an auto manufacturer cannot afford such pressure, and not long ago they invariably went to the vehicle manufacturer. There was a "strike" - stopping the supply, causing the plant to stop production for three days.
From "partnership" to "grandfather relationship," and eventually to "opposite relations", this is the reason "the price of auto parts does not fall," and it is also whether the automaker or the parts and components companies or "outsiders". Do not want to see the dilemma of China's auto industry.
While the prices of some parts and accessories have risen, the price of accessories for the automotive aftermarket is now falling. A manager who specializes in car batteries said that the 60 batteries in his hands are exclusively for cars. Last year's retail price was 260-270 yuan, but now it can only sell 230-240 yuan, which is about 10%. While raw materials are rising and the price of similar parts and accessories is also rising, the prices of accessories are falling. What is this? The manager was very straightforward: due to competition. Now that the entire vehicle has reduced its price, consumers also hope that the price of accessories will fall. In order to win more customers, some auto parts dealers in the same industry will vote for the best. First of all, they will cut down their profit margins and force some small household auto parts makers to follow suit. “Now is the time for the auto parts industry to reshuffle, whoever wins the end, whoever is the winner; whoever is weak, who will eventually close the shop.†The manager made a big deal of emotion.
Poor prognosis
Domestic automakers and the auto parts industry are rushing too fast and will eventually allow multinational parts companies to take profits.
China is a large automobile market and a large market for auto parts. According to the Auto Industry and Commerce Association of the All-China Federation of Industry and Commerce, in the current situation of only 24.86 million vehicles in China, the sales revenue of auto parts in China totaled 300 billion yuan in 2003, and the auto parts sales market accounted for 68 billion yuan. It is predicted that by 2010, China's auto sales market alone will reach 190 billion yuan. This makes the multinational auto parts company particularly jealous, not only heart, but also action. At present, the vast majority of automotive multinational companies in the world have entered China through wholly-owned or joint ventures. For example, Delphi has set up its headquarters in Shanghai at the end of 2002. It has 13 wholly-owned companies, a joint venture and a training center in China. In July last year, it invested 50 million yuan to set up an R&D center in Pudong, Shanghai, and it will start operations next year. Bosch, which ranks first in the world, now has 10 representative offices, 5 trading companies and a trading office, and 9 joint ventures in China. It is expected that it will sell (including exports) 1.3 billion euros in China this year. Multinational companies such as Toyota, Volkswagen, and General Motors have also established wholly-owned or joint-venture parts companies. Not long ago, BMW also invited more than a dozen of its first-tier component suppliers to visit its new factory in China and tried to persuade them to enter the Chinese market. According to one document, of the 5,000 auto parts companies in China, 1,200 are foreign-invested enterprises.
The entry of these multinational auto parts companies into China will certainly provide us with funds to solve the current employment pressure. However, they will never come to run charitable causes. Their ultimate goal is to make money. It is to master the Chinese auto parts industry. High-end control.
The auto parts market is generally divided into three parts. The first is the OEM market for the complete vehicle, the second is the parts export market, and the third is the after-sales service market. According to the analysis, after a multinational auto parts company enters China, it is most likely to control the first market, that is, to supply complete vehicles produced in China. Something may be done for the second market, but it will be like the foreign party in the vehicle joint venture. It will not be unwilling to allow parts and components produced in China to go abroad to attack its existing market and pricing system. The action in this area will not be too great. For the third market, one and a half will not dare.
the reason is simple. The advantages of China's spare parts enterprises are low labor costs, low technical content of products, and low final product prices. The advantages of multinational auto parts companies are high technical content, high labor costs, and high prices. If parts are produced in China and China's low labor costs are fully utilized, a strong product price/performance ratio can be formed, and low-end domestically produced parts can be squeezed out of the vehicle manufacturer's supporting system. On the other hand, the OEM market for complete vehicles is relatively more formal, and any vehicle (whole machine) wants to increase the technical content of the entire vehicle by improving its own component technology content. The auto parts company will further strengthen the public relations for the relevant vehicle (machine) factory supporting personnel, and it is quite easy to enter inside.
This is not the case for the automotive aftermarket. After nearly a hundred years of development, the foreign auto aftermarket has become very standard, while the auto parts market in China is scattered, chaotic and poor. If a multinational auto parts company rushes into the land rashly, counterfeit goods alone will make it unrest. For so many years, the Chinese government has been persisting in cracking down on counterfeit auto parts. However, the effect is always unsatisfactory. Multinational car companies are also aware of how difficult it is.
Zhao Ying, of the Chinese Academy of Social Sciences, said: "We originally hoped that after the (foreign) vehicle companies came in, we wished to support it again and the desire to transform our existing parts and components system was lost." We are trying to enter China into a multinational auto parts company. The desire to transform our parts and components system later will be frustrated. In the end, supporting this piece of vehicles will fall into the hands of multinational auto parts companies. China's auto parts industry may only be able to display its “fist embroidered legs†in the supporting and aftermarket markets of low-end vehicles. If so, it will be a sad thing for the Chinese auto parts industry. Therefore, we sincerely hope that we can quickly change the current situation of Chinese auto parts companies and vehicles. But who will coordinate? Who has this energy?
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