Since last year, the price of the entire vehicle has been falling, whether it is a small car or a commercial vehicle. The profits of OEMs and parts factories will certainly be affected. Some people say that the era of huge profits for automakers is coming to an end; others say that, in fact, automakers still enjoy high profits. They more often pass this pressure to their counterparts and spare parts prices. Pressure. What is your opinion on this argument?
Pan Yixin: Our parts and components companies have been greatly affected. Since last year, raw materials have continued to increase prices, and procurement costs have continued to increase, such as pig iron. Taken together, our purchase costs have risen by about 8%, but the average price cut is also 8%, which is about 16% in both cases.
In this regard, I think it is easy to make a statistic. System procurement accounts for an average of 70% to 80% of the entire vehicle, while the automaker's own 20% to 30% change has very limited space. These vehicle prices are almost all reduced by Parts plant finished digestion. Some people say that the profit of the entire vehicle factory is high and it may be low now. In fact, this is still the case.
Xiao Zhenghai: You are very correct. Our engine factory was squeezed by two people. One head is the squeeze of rising raw material prices, and the other is the extrusion of supporting plants. It is hard. My accessory manufacturers are affected by the increase in raw material prices. Without price increases, there is no way to start production. Some companies have risen three or four times. At the same time, the engine companies of light trucks compete with each other, and it is reasonable to say that the price of raw materials has risen. Their prices should also rise simultaneously. However, in order to grab the market, they do not increase prices, and in return, they also cut prices in order to enter the market at this time. In this case, we cannot raise prices.
The increase in the prices of the parts and components that are provided to me depends on our own engine plant to digest them. Our engine output is large, but the current profit is not satisfactory.
China Auto News: Will some competitors compete for prices, will there be any situation where quality is difficult to guarantee?
Xiao Zhenghai : It should be said that if this situation continues, it is dangerous.
Now there are some cases of cutting corners in single cylinder machines. Some companies have pushed the prices of single-cylinder machines very low, which has made it difficult for other parts and components companies to survive. And we are still in accordance with the drawings and production. As soon as the results were found on the market: The fuel tanks—all of our steel plates were all 1 mm thick, and they were all 0.4 to 0.5 mm thick, and the weight was cut in half. The price was certainly cheap. Flywheels—We demand that the thickness of the spokes is 15mm, but they only have 8mm. A flywheel is 3 kg lighter than us! This is obviously cutting corners, but some consumers are unclear, and some think it is cheaper to buy.
But I can guarantee that Quan Diesel does not do this. why? I must ensure product quality. Once there is a problem with the engine, that's fine. Quality is the life of a business.
China Auto News: In the face of a severe living environment, as a parts factory, what can we do to be completely under the control of an auto factory?
Pan Yixin: Must have strength. Without strength, you can't stand on your own. Let me give you a very simple example. Nowadays, many parts factories are subject to large-scale automobile groups, and some have capital relations, holdings, equity participation, or joint ventures. This has led to the protection of these parts and components companies. On the other hand, it has caused parts and components companies to rely too much on Daewoo Automobile Group.
We, otherwise, have always remained independent. Our foreign partners have also sought to maintain their independence in their countries. We do not want to participate in any large vehicle group. why? Because you do not know who will survive in the future, who will develop better.
From another perspective, the current suppression is also good for us and is conducive to our participation in world competition. Forcing us to come this way. To survive, we have to do a better job of quality and make the price cheaper.
But I am also very worried that in the future, these auto manufacturers will not be competitive themselves. They can now suppress parts, but after all, there is no room for them to press down after all. What should they do? Only on your own. If he does not adapt himself to such competition, he will eventually die. So I think the auto factory should be concerned about the improvement of its own cost. Now, the automaker basically transfers the price pressure to the parts factory. In other words, now that ordinary people have bought cheap cars, first of all they should be thankful for the parts and components companies.
Xu Liangfei: It is said that the entire industry is scattered, chaotic, and poor, and that parts and components have dragged the development of the vehicle. However, I think that some of the auto manufacturers' own practices are also contrary to the laws of natural development. The first manifestation of market competition is the price change. The whole vehicle cuts prices. In order to protect their own interests, they break down the pressure layers and let everyone share the burden with them. I feel that there is a right side and that they are unreasonable.
Parts companies are looking for markets, and they also involve peer competition. This is also a shuffle process. Whoever can survive will be able to get the final development. I believe that in the end, the remaining automakers and parts factories will join together for common interests.
Now, it is only a process for everyone to form such a situation for their own interests. If you don't, you will have someone to give it. In fact, big automakers do not expect the price of key components to decline at the expense of quality. We have found that our own suppliers first put forward premium prices. I think this is a good trend. The cost under the premise of guaranteeing quality is scientific. This is very important.
Many parts and components companies faced with consolidation can now get a handful. There are some companies that have not developed well. Private capital and other capitals are integrated at low prices. Because of the low cost of entry, the cost of products is also low. This is a great lethality for our state-owned enterprises. However, this is short-lived. Therefore, we decided to clench our teeth and if it passed, the outlook was good.
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