The analysis on the development status of China’s auto parts industry in 2022

The analysis on the development status of China’s auto parts industry in 2017 released by an organization shows that from 2006 to 2015, China’s auto (including motorcycle) parts industry developed rapidly, the operating income of the whole industry increased continuously, with an average annual growth rate of 13.31%, and the output value ratio of finished vehicles to parts reached 1:1, but in mature markets such as Europe and the United States, the ratio reached about 1:1.7. In addition, although there are a large number of local parts enterprises, the automobile parts enterprises with foreign capital background have obvious advantages. Although these enterprises only account for 20% of the number of Enterprises above Designated Size in the industry, their market share has reached more than 70%, and the market share of Chinese brand auto parts enterprises is less than 30%. In high-tech fields such as automotive electronics and key engine parts, foreign-funded enterprises have a higher market share. Among them, foreign-funded enterprises account for more than 90% of core parts such as engine management system (including EFI) and ABS.

Obviously, there is a big gap between the development level of China’s auto parts industry and that of a powerful auto industry, and there is still a huge space for development. With the largest auto market in the world, why is China’s auto parts industry so unknown in the international industrial value chain.

Zhaofuquan, a professor of Tsinghua University, once analyzed this. He said that as long as the finished products are cost-effective, consumers will pay for them. However, the parts enterprises directly face the finished vehicle manufacturers. Whether they can get orders depends on the trust of the whole vehicle manufacturers. At present, automobile manufacturers in various countries have relatively stable supplier systems, and it is difficult for Chinese parts enterprises that do not have core technologies to intervene. In fact, the initial development of foreign parts enterprises largely benefited from the support of domestic automobile manufacturers, including capital, technology and management. However, Chinese parts enterprises do not have such conditions. Without sufficient orders from the main engine manufacturers to bring funds, the parts enterprises will not have enough power to carry out R & D. He stressed that compared with the whole vehicle, the technology of parts and components is more professional and emphasizes the breakthrough of originality. This can not be started by simple imitation, and its technological innovation is more difficult.

It is understood that the technical content and quality of the whole vehicle are largely reflected through the parts, because 60% of the parts are purchased. It can be predicted that China’s auto industry will not become stronger if the local parts industry is not strengthened and a number of strong parts enterprises with advanced core technology, good quality level, strong cost control ability and sufficient high-quality production capacity are not born.

Compared with the century long history of automobile development in developed countries, it is very difficult for the emerging local parts enterprises to grow and develop. In the face of difficulties, it is not difficult to start with relatively simple parts such as interior decoration. China’s automobile market is huge, and it should not be difficult for local parts enterprises to take a share. In this case, it is also hoped that local enterprises will not stop here. Although the core technology belongs to the hard bone, they must have the courage to “bite”, establish the thinking of R & D, and increase the investment in talents and funds. In view of the large gap between local enterprises and foreign enterprises, the state also needs to take actions to cultivate and foster a number of local key parts enterprises to become stronger.

Post time: Jun-16-2022