The era of globalization of a Chinese auto industry has come! This is particularly evident in the automotive spare parts sector. Compared with vehicle manufacturing, Chinese private companies are focusing on auto parts and components, and thus the development path of “parts surrounding the entire vehicle†is more desirable. This is also in line with the government's medium and long-term development strategy.
Industry reform pressure: ★★★
Policy adjustment: ★★★
Innovation space: ★★★★
Private company participation: ★★★★★
"Entrepreneur" attention: ★ ★ ★ ★ ★
In 2008, China's auto sales have reached 9,380,500 units. Second only to the United States is the world's second largest consumer market for automobiles. However, the layout of China's automobile production is still very fragmented, the production efficiency is not high, the sales model and structure of the automobile are not perfect, the ratio of auto consumption credit is low, the used car market is not standardized and active, and the urbanization and road congestion are both plagued by these contradictions. The future development of China's auto industry.
Industry diagnosis: bid farewell to "market for technology" strategy
Due to the lack of independent platform technology, the "market-for-technology" strategy of China's state-owned auto industry has not formed the expected goal of "digestion, absorption, and re-innovation" and has resulted in "technical dependency syndrome" and "joint venture dependence." At the same time, local auto makers such as BYD, Geely, and Chery returned to the “reverse development model†and quickly emerged. That is, more strategies such as manual processing, supply of independent core parts, and vertical integration are used to win the market by relying on cost-effective products.
This model is seen as contrary to the current foreign automobile manufacturing methods, but in terms of cost control, BYD, Geely and other companies do have extraordinary places. Moreover, China's private auto makers dare to break the rules and even use seemingly aggressive strategies to subvert the competition system in their target markets. In the Chinese auto market dominated by joint venture brands, although the cars produced by local private companies are not enough in the market, they represent yet another challenge - making full use of the Chinese market for a large number of general-purpose parts for assembly. How large is the industry's subversion of energy?
Compared with vehicle manufacturing, China's auto parts industry is not very concerned, but the global competitiveness of local manufacturers has become prominent. After many years of development, typical companies such as Wanxiang Group and Huaxiang Group have initially possessed global resource integration capabilities.
Policy Interpretation: Good Show Behind
The core objectives of the revitalization of the automotive industry are: to stimulate demand and optimize industry and product structure.
The "Automobile Industry Adjustment and Revitalization Plan" does not mention the commercial vehicle market substantially, and the industrial rescue problem will mainly be achieved through the 4 trillion investment "pulling domestic demand to maintain growth." Starting the rural market is a big bright spot, and the rural automobile consumption market will become an important support for the continued growth of the Chinese auto market in the next 10 years.
Under the premise that it is difficult for the entire vehicle market to achieve a breakthrough in the short term, the government has in fact formulated a development path of “parts surrounding the entire vehicleâ€. In the revitalization of the auto industry, it is also reflected that in the future the government will focus on supporting the development of core parts manufacturing companies with concepts such as independent innovation, technology upgrading, import substitution, and overseas integration. At the same time, it will raise the threshold for foreign investment and acquisition of domestic related companies, and (protective) improve the competitiveness of local auto parts and components companies.
If China's auto parts industry can achieve substantial breakthroughs, it will solidify its "reverse development model" for BYD, Geely, Chery and even SAIC, FAW and many other domestic auto makers. This will in turn subvert the global auto industry's existing competitive landscape. . Although this road is full of challenges, it is at least better than the entire vehicle breakthrough route. Of course, the details of more support policies will be formulated and implemented by various ministries and commissions and coordinated by local governments.
Transformation Suggestions: Strategic Alliances and Overseas Acquisitions
Regarding the future development and transformation of China’s auto industry, we suggest that automakers abandon the scale of production economics and instead focus on technological innovation and production process innovation, so that they can better control costs while optimizing the efficiency of resource integration in the industrial chain. Provide outstanding cost-effective, market-competitive automotive products.
In terms of innovation in the above areas, the key point is the dynamic efficiency optimization of the industrial chain, that is, from the engine (such as multi-valve, fuel injection, light ceramics) and brakes (such as computer-controlled lock release brakes) to the transmission, suspension, interior trimmings, etc. Whether the manufacturer's innovation can reflect the integrated competitive advantage as a whole, rather than "single fight alone" to meet the orders of multinational companies.
To achieve the above transformation, on the one hand, the government's industrial policy needs to actively guide and encourage manufacturers to take a long-term view. For example, China's “automobile city†in Changchun City, Jilin Province, launched the “Five-one Project†for the development of the automotive industry in January 2009, and proposed a series of expansion goals for the expansion of spare parts industries. On the other hand, if there is a strategic alliance between outstanding automotive parts and components manufacturers, it may be more valuable to increase R&D prospectiveness and applicability through R&D synergies.
It is not the best choice to conclude the equity relationship between manufacturers by capital means, which may be trapped in the efficiency of vertical integration. However, the use of modern information tools to build an open innovation platform may be the best option. In fact, for an optimized automobile industry structure, this model will be an inevitable trend. It is worth mentioning that the innovation alliance of Chinese domestic auto manufacturers does not mean that they are confined within the Chinese market. Any multinational company may become the target of resource integration.
In the current economic environment, this kind of resource integration helps to form strategic alliances and establish an open innovation system. Therefore, we can focus on overseas asset purchases and use equity purchases with caution.
Future winners: innovators
Class A:
1) Core spare parts breakthroughs such as engines, transmissions, chassis, etc.
2) Import substitution: such as molds, electronic controls, and automotive platform development. Such companies will benefit from long-term national industrial support policies and continuous investment in technological R&D; at the same time, there will be great opportunities for overseas acquisitions.
Class B:
1) Key parts manufacturers, opportunities are focused on industry integration, open innovation and overseas acquisitions.
2) The main opportunities for new energy vehicles and key spare parts are government policy guidance and market subsidies.
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