“Outsider” boom triggered component crisis


After hearing about Amoi’s “snapping off” from other home appliance manufacturers in China, whether it follows this model or continues to wait and see for the auto parts industry will be an unbearable torment. Because this "rational investment" can bring much improvement to Amoi, it is difficult to predict.

Good things happen one after another. NAC is also actively preparing for the launch of the “Ibiza”, a crystallization model for its cooperation with Bird, and has inadvertently received the hydrangea thrown by another domestic mobile phone giant, Amoi.

On March 29, Amoi Electronics announced that it had established a joint venture with Nanjing Automobile to produce auto bodies. Among them, Amoi invested with its own funds of 175 million yuan, which accounted for 50% of the shares of the joint venture company. Nanjing Auto also took another 50% of the shares in the joint venture company in the form of partial capital plus technology. At the same time, Amoi does not involve the specific operation of the joint venture company, and the management of the joint venture company will also be assigned by the NAC.

Compared with the investment of 3 billion yuan in the waveguide, Amoi can only be considered a small chopper. The biggest difference between the two is that the former is intended for vehicle manufacturing, while the latter is in the automotive spare parts sector and hopes to drive the company's automotive laptop, TV, video player, audio and other related electronic product market expansion.

Amoi "prefers Tiger Mountain"

The meaning of a drunkard is not alcohol. Amoi is truly a big piece of car electronics. Some experts optimistically expect that Amoi’s small investment in the automotive industry will be to establish a good relationship with automakers, thus bundling auto electronics with the auto body, and the performance of its main business will undoubtedly be greatly enhanced.

Among the top ten auto parts suppliers in the world, although successful precedents for international appliance giants such as Panasonic and Philips can be found, China's steel prices have skyrocketed, while auto prices have fallen and fell, and spare parts profits have been squeezed. Coupled with the large-scale forcing of foreign parts giants, it is still unclear whether Amoi's 175 million-year body plan “to promote the development of automotive electronics” will be realized.

The impulse of an investment may trigger the bubble crisis of the entire spare parts industry.

In the entire “outsider manufacturing” wave, companies such as Amoi, which only focus on one part of a car, are rare. Except for Wuliangye as an automobile mold, most of them are focused on vehicle manufacturing.

But where does the space for price reductions for vehicle companies come from? Industry veterans told the “International Herald Tribune” that the reason is that vehicle companies have to maximize their profits and often pass on their share of price cuts in competition in the entire vehicle market to parts and components companies. Spare parts companies are in the midst of upstream raw materials and downstream vehicles. Under the dual pressure of raw material price increases and automakers' compressed procurement costs, corporate profits are generally worrying.

It is understood that some OEMs even require spare parts prices to decline by 8% to 10% each year in actual procurement. Even more ridiculous is that there are already “completed” ultimatums issued by OEMs to upstream parts and components companies: Parts companies will reduce their prices to the specified range within a specified time, if the upstream parts factory does not implement, vehicle companies It will cancel its supporting qualifications.

Multinational giants will not provide orders

On the other hand, the influx of international parts giants has almost stifled domestic counterparts.

"For cost considerations, each automotive multinational company will bring a large number of its original global parts and components partners when investing in China, and domestic spare parts companies can only rely on the sidelines." Chief Analysis of China Automotive Industry Consulting and Development Corporation Jia Xinguang told the International Herald Tribune. Taking Shanghai Volkswagen as an example, more than 100 companies have invested in the globally-supported company. At the beginning of its investment in China, U.S. GM has attracted 44 related supporting projects, with a total investment of 2.23 billion U.S. dollars.

At the same time, some of the world’s leading multinational auto parts and accessories groups also took the initiative. Delphi, Bosch, Eaton and Michelin all entered China to establish wholly-owned and joint ventures. Delphi Automotive Systems, the world's largest manufacturer of automotive parts and components, has set up 13 wholly-owned and joint ventures in China with a total investment of over US$ 400 million. The “No. 2 role” Bosch is not to be outdone, setting up a large-scale spare parts distribution network covering China, with as many as 150 after-sale service stations.

Another well-known bottleneck is that the obstruction of information channels has caused domestic auto parts suppliers not to obtain large orders from car multinationals. Some multinational companies’ procurement staff complained that finding the right companies and products in the huge Chinese market and completing billions of dollars in bulk purchases is almost equal to a needle in a haystack. Jia Xinguang introduced that the common practice in foreign countries is to “boost bottlenecks” through channels such as industry associations, peer evaluations, intermediary agencies, and professional newspapers and magazines, and at the same time invite world-renowned consulting companies to assist in their implementation and supervision. In this regard, domestic enterprises have no advantage at all.

The collision on the same road

"Two months later, the automotive industry will be in parallel with telecommunications, IT, and home appliances to form the four major branches of Amoi." Insider Amoi told reporters. From now on, Amoi does not rule out the possibility of further investment.

However, in order not to leave the outside world with an unfair reputation, Xia Xin has repeatedly stressed that he does not participate in any business management of the joint venture company. It is only a simple investment behavior. Some media have also described Amoi's creation as "a good thing for a double-edged sword." Because Amoi will not only be able to obtain a certain profit share from the body business, it can also transform itself into a joint venture company supplier of automotive electronics products.

Among the Chinese household electrical appliance manufacturers that have established themselves among the princely establishments, whether it is capital, technology, or market share, or whether it is a mobile phone, a TV or a notebook, Amoi is not considered an industry leader. Although the original intention of the automobile industry to drive automotive electronics is not lack of remarkable points, some international automotive electronics giants will also collide with Amoi on the same road. Global automotive electronics overlord Motorola has announced at the beginning of this year that it will invest in the establishment of China's largest automotive electronics factory in Tianjin this year.

And China's veteran auto parts and accessories companies have begun to "quickly retreat," with the original capital accumulation and industry base cut into the vehicle manufacturing. "Compared with those companies that invest in whole vehicles, the risk that companies that invest money in spare parts will be even worse." The industry people said with worries.


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