Why does the auto group's parts business falter?

“For major auto groups, accelerating the development of self-developed and independent brands requires a strong component system to support them.” At the recent China Auto Forum 2014, executive vice president of Beijing Automotive Group Co., Ltd. Han Yonggui Indicated.

The spare parts industry is the basis for the development of the automotive industry. Its level of development directly affects the degree of development of the automotive industry. However, of the top 100 international auto parts enterprises announced in 2013, four Chinese auto parts suppliers entering the list —Weichai Power, Yuchai , Linglong Tire, and CITIC Dicastal, are not China. The major component factories of major auto groups. Why is it that China’s auto companies, which are rich in finances and fast growing, cannot occupy the highlands of the parts and components industry?

The core technology has not yet broken through the bottleneck

The rapid growth of China’s economy, the increase in the level of urbanization, and the increase in residents’ income all contribute to the constant instillation of vitality into the Chinese automobile market. According to reports from authoritative agencies, the average car price/per capita GDP (R value) ratio in China in 2012 was approximately 2.9. From the experience of other countries' auto market development, when the R value is less than 3, car consumption will show rapid growth. Situation, and China is at such a stage.

Compared with the high-speed growth of the automotive market for many years, China's auto parts industry has made some breakthroughs, but the development speed is not outstanding. In particular, there are still various problems in the parts and components business of the vehicle group, with comprehensive strength and scale. Still not strong enough.

The most fundamental reason for the auto parts business of China Automotive Group is that the technology of the key core has not yet broken through the bottleneck. Liu Bo, vice president of Changan Automobile Group, said that in terms of engines, transmissions, front and rear axles, and chassis technology, there is still a very big gap between China's spare parts products and foreign countries.

To promote the development of zero synergy with the advantages of the group

In response to the plight of the parts and components business, the major automotive groups believe that they should make full use of the Group's resources to form a synergistic role in zero integration. "Parts and components are a backbone product in the automotive value chain and must be driven by the vehicle to promote its development." Han Yonggui believes that it is necessary to adhere to the localization strategy of the parts industry, build and optimize the auto parts supply chain, and further train Local R&D team and forming local partners.

Beijing Automotive's joint venture, Beijing Benz, has made the localization of parts and components an important strategy for its supply chain construction. The localization rate of its component suppliers has exceeded 50%. "At the same time as the development of the main engine plant, it is necessary to increase the supplier's capabilities to a certain level. This requires the simultaneous development of complete vehicles and parts."

Chen Hongliang, senior executive vice president of Beijing Benz Automotive Co., Ltd., said.

Feng Xingya, deputy general manager of GAC Group, suggested that a national special fund can be established to provide financial support for the innovation of key auto parts and core technologies.

Promote technological development with technological innovation

The experience of international component giant Delphi may be worth learning. All along, product development is the focus of Delphi's investment. Its three R&D centers in Shanghai and Beijing have nearly 3,000 engineering technicians. In the past three years, its patents for R&D in China have been more than 70 each year. The continuous innovation of technology "is the real advantage of Delphi in China." Yang Xiaoming, president of Delphi Automotive Systems (China) Investment Co., Ltd., said.

At the same time as the fundamental development of plant development, the auto parts and components segment should continue to expand its overseas production scale. Feng Xingya’s view is that “we must focus on building export products that are close to the sales market and can drive product technology and services.”

Take Haina River as an example. Its international operation strategy has enabled it to achieve the acquisition of Innafa Group, the world's largest manufacturer of skylights, and to enhance its own parts and components business through the ongoing management and integration of Innafar's business. Data show that Hai Nachuan's marketing this year will reach 27 billion yuan.

Han Yonggui believes: "To realize the automotive industry from big to strong, we must have more parts and components companies rushed into the top 100 international list."

At present, the automotive industry is moving toward smart, lightweight and interconnected development, which also places higher demands on parts suppliers. "Creating parts with high technological content and added value, and at the same time being able to have a sustainable competitive advantage will be the development direction of the auto parts and components business." Li Yongru, director of strategic planning department of Dongfeng Motor, believes.

Parts business hardly supports group revenue

At present, the auto parts and components business of the domestic auto group is still difficult to play a good supporting role for the head office. Although all major automobile companies in China consider the parts and components business as an important strategic plan, the background of the formation of these parts and components is complex and has not yet formed a favorable revenue situation.

Take the Dongfeng component field as an example. When Dongfeng first built a factory in Shiyan, Hubei Province, the entire truck assembly plant and various specialized parts and components plants were simultaneously constructed, so Dongfeng had a certain competitive advantage in terms of commercial vehicle parts. However, the technical content of parts and components in the commercial vehicle sector is not high, and the experience gained by Dongfeng has no obvious benefits.

Beijing's auto parts industry is not even smooth. Beijing Hainachuan Auto Parts Industry Co., Ltd., which was established in 2008, is an important platform for the development of Beiqi parts and components industry. The background of the establishment of the company is that since the localization of Cherokee that year, BAIC lost a large part of its spare parts business and had to sell most of its factories to build the current Hainachuan auto parts industry company.

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