As the world's largest auto market, China's industrial scale advantage is becoming more and more obvious, but the problem of structural overcapacity in the auto industry is also becoming more apparent. In the face of the increasingly intensified contradiction between supply and demand, not only the pressure on OEMs is increasing, but the development of the upstream parts industry is also in urgent need of transformation and upgrading, and industry reshuffle is inevitable.
Structural excess capacity
Led by the Ministry of Industry and Information Technology, China Automotive Technology Center and China Auto Parts Industry Research Association have conducted research on China's auto parts industry since last year. Now, this research is not over yet, but there is a phased result. Dong Jianping, former secretary general of China Association of Automobile Manufacturers and executive vice chairman of China Auto Parts Research Association, who participated in the survey, revealed some of the survey results at the "10th China (Huadu) Auto Forum" on September 24. Dong Jianping said that the relationship between supply and demand in the automobile market has changed, high-speed growth has shifted to medium-to-high-speed growth market production and sales, structural overcapacity, the main consumer market has been sinking to fourth- and fifth-tier cities, and the overall industrial area has been transferred. Obvious features.
"In 2015, the domestic automobile production and sales volume reached 25 million units, and the industry's total output value was 7.5 trillion yuan. In the future, the annual market demand scale is expected to peak at 35 million units, with an annual growth rate of about 4%. At present, the domestic market has formed The vehicle production capacity is 31.22 million vehicles, and the new production capacity under construction exceeds 6 million vehicles." Dong Jianping said.
At present, there is a contradiction between energy structure, environmental pollution and the popularization and use of automobile products. Among them, the number of automobiles has increased rapidly, reaching 172 million in 2015. Vehicle exhaust emissions have become an important "contributor" to environmental pollution, which is expected to be 30 million. %. With the increasingly prominent contradictions in the development of the automobile society, car companies will encounter severe tests, especially the relatively weak core competitiveness of their own brands, which is reflected in the lack of key core technologies, the shortcomings of the industrial chain, the lack of comprehensive strength of enterprises, and the lack of upstream and downstream support. The brand premium capability is poor, and the domestic auto industry chain still has a relatively large room for improvement. Dong Jianping said that during the research process, the evaluation of the current situation of the domestic parts supply chain is that the current domestic parts localization manufacturing system includes domestic and foreign capital, which can basically meet the development needs of the automobile industry, but localization does not mean autonomy, and there are still some Key, sophisticated and high-margin products depend on imports.
The total output value of the auto parts industry accounts for half of the total output value of the auto industry, which was 3.8 trillion yuan in 2015. The average profit margin of the parts industry is 6% to 8%, and the foreign joint ventures exceed 15%, and the overall autonomy is relatively low. In 2015, the domestic component research and development investment accounted for only 2%, and the independent innovation and technology research and development were seriously insufficient. At present, there are about 100,000 domestic parts companies, and about 13,000 companies above designated size (main business income of 20 million yuan). Although the key core technology level of domestic overall component products has made great progress in recent years, foreign-funded enterprises are still dominated by high-tech barriers and core components, especially power electronic control systems, and high-reliability basic components. Independent parts companies are relatively weak, and foreign-funded parts companies are only manufacturing bases in China and have not introduced product technology.
Shuffle is inevitable
Regarding the future development trend of the parts industry, Dong Jianping said that the supply-side structural reform and transformation and upgrading will have a profound impact on the auto parts industry. The investment mergers and acquisitions and mergers and acquisitions brought about by the adjustment of the industrial structure will seek and create ways for domestic independent parts and components enterprises to become bigger and stronger. The huge demand for auto parts and aftermarket development will still provide soil for the development of the auto parts industry, but the globalization of supporting parts has caused foreign parts and components companies to accelerate their development in China, localize R&D procurement and seize the market, and the competition is more intense , the polarization of pros and cons is more obvious, and the industry reshuffle is inevitable.
Dong Jianping's suggestion to the company is that there are many parts companies under the large vehicle group, which should make major adjustments and integrations, integrate advantageous resources, merge duplicate assets, and get rid of excess and backward production capacity. The whole vehicle market is in our hands, and we use this as a bargaining chip in exchange for technology to strengthen our dominant control over foreign-funded parts and components companies. In addition, independent enterprises must make clear their R&D and innovation capabilities as their primary status, and focus on global resource integration and distribution.
Xu Changming, director of the Information Resources Department of the State Information Center, also mentioned that the automobile industry is undergoing major changes, the growth rate of automobile demand is declining, the upgrading of automobile consumption is accelerating, and self-owned brands have generally begun to develop forward, which has put forward new requirements for component manufacturers.
According to Xu Changming's analysis, it is expected that China's domestic demand for automobiles will reach 27.23 million in 2016, which is roughly equal to the combined sales of the three major automobile markets of the United States, Japan and Germany. Due to the importance of the Chinese market, foreign and domestic manufacturers still have a strong impulse to expand, and the contradiction between supply and demand of automobiles will continue to be under high pressure. "The slowdown and intensified competition in China's auto market will require component manufacturers to improve quality and control costs. Consumption upgrades will also increase the quality requirements of components, while OEMs are conducting research and development, which will increase the requirements for component companies' R&D capabilities." Xu Changming It is believed that component manufacturers must have new ideas for cost control. The future is cost control under the premise of continuous quality improvement, and the method of relying on low factor prices to control costs has failed. In addition, use both domestic and foreign resources to expand R&D capabilities.
The Renault-Nissan Alliance, whose car sales account for 1/10 of the world's total car sales, is promoting the global procurement plan for general-purpose components based on five global standards, including quality, cost, delivery, R&D, and management. The alliance's joint venture in China, Dongfeng Nissan, has a factory in Huadu, Guangzhou, which brings together more than 200 parts and components companies. Chen Guocai, deputy head of Dongfeng Nissan Manufacturing Headquarters, said in an interview with China Business News that facing the intensifying competition in China's auto market, the company has worked hard in both production methods and technological innovation. Based on the advanced APW-Renault-Nissan alliance production method, Dongfeng Nissan comprehensively researches and innovates the operation mode of the factory and product manufacturing development system. Under the guidance of this production method, each project of Dongfeng Nissan's vehicle plant will pursue the least storage, the smallest handling, and the shortest production cycle, and completely eliminate the engineering and operation activities without added value. The whole value chain suppliers are the same as the vehicle factories. Among them, Dongfeng Nissan's newly built advanced engineering technology center builds a digital factory platform, focuses on automation and informatization, and is committed to the research and development of "three new" technologies of new materials, new equipment and new processes, promotes process innovation, and will optimize Innovation, product development is carried out through quality improvement activities that are highly consistent with digital and physical objects, early stage development of the whole process in collaboration with suppliers, and a whole-process quality traceability system including suppliers.
Not only are joint venture car companies accelerating the integration of domestic and foreign resources to improve their competitiveness, but also forcing the transformation and upgrading of component manufacturers in the supply chain, domestic independent car companies are also using both domestic and international resources to enhance their R&D capabilities. Changan, Geely and Chery have all been expanding their international resources. Xu Changming believes that international mergers and acquisitions of parts and components are an important way out. Yu Zhongchi, chairman of Northeast Industrial Group Co., Ltd., also believes that overseas mergers and acquisitions help auto parts companies improve their core competitiveness.
