The pain of auto parts and the dream of "car power"

"Parts are the basis for the development of the automotive industry and are also the 'shortcomings' for building a powerful automobile country." Dong Yang, Secretary General of the China Association of Automobile Manufacturers, frankly stated at the annual meeting of the China Association of Automobile Engineers that domestic vehicle companies are now developing rapidly. However, there is no strong support for parts and components companies. Dong Jianping, deputy secretary-general of the China Automobile Association, said that whether auto power is mainly reflected in auto parts, because many of the core technologies involved in safety, energy saving, and emissions are all on parts and components. There is no breakthrough in the technology of parts and components, and cars cannot meet relevant standards. Regulatory requirements. In addition, parts and components are upstream of the vehicle and are the direct users of raw materials and basic machinery parts. Therefore, the development level of auto parts and components directly reflects the industrial level of a country.

It is understood that Germany, the United States, and Japan are able to become a powerful automobile country. Apart from having a group of powerful vehicle manufacturers, it is also behind them that there is a group of powerful parts companies: behind the German Volkswagen are Bosch and Siemens. Behind Japan's Toyota and Honda is Denso and Aisin. Behind U.S. GM are Delphi and Visteon, and South Korea is backed by MOBIS. According to industry sources, in recent years, the domestic auto parts industry has grown at a rapid pace, but due to the low technological content of the industry and being squeezed by foreign companies, it has become a “constrained by internal and external problems” and has become a constraint on the Chinese auto industry. One of the major "shortcomings" of the big and powerful ones, if the pain of auto parts is not "healed," it will certainly hurt the dream of a powerful automobile country in China.

Lack of R&D The lack of core technical experts indicates that despite low labor costs and a huge market, the development of China's auto parts industry still has problems of small scale, low innovation capacity, and low standardization.

The data shows that in 2010, the sales revenue of the domestic auto parts market was about 1.64 trillion yuan, a year-on-year increase of 44%, which was 7 percentage points higher than the growth rate of vehicle sales revenue. In stark contrast to this, at present, there are more than 5,000 non-state-owned auto parts companies with state-owned, state-controlled and sales revenues of more than 5 million yuan. Among them, more than 80% of annual sales are below 100 million yuan, and only 130 are over 100 million yuan. Nearly 70% of auto parts suppliers in China have high production costs, low overall efficiency, and uneven product quality. About 80% of domestic automotive technology patents are mainly applied to utility models, and there are few invention patents. The core technologies are not mastered.

Experts said that domestic auto parts companies have relatively weak self-development capabilities, especially in the research and innovation of new automotive electronic products and electronically controlled mechanical parts with high technological content. Some of the "autonomous technologies" claimed by some auto parts companies are copied and lack core technologies.

In addition, the low level of standardization, serialization, and generalization is one of the important factors contributing to the growth of domestic auto parts industry. It is understood that domestic auto vehicles, especially cars, SUVs, and MVP technologies are sourced from different countries and different multinational corporations. Due to different company standards, there are Japanese, Korean, American, German, and legal systems, so domestic auto parts The standardization, generalization, and serialization are relatively low.

The prospects of the strong powers are not clear The well-known car commentator Jia Xinguang is not optimistic about the development of the domestic auto parts industry. He believes that neither the vehicle manufacturers nor the competent departments have always attached importance to auto parts, and their investment in components has long been insufficient. It is very difficult to catch up with the advanced international level.

According to Jia Xinguang, 10 years ago during the negotiation of China’s accession to the World Trade Organization, in order to focus on the protection of domestic automakers, it adopted an “opening” attitude toward the domestic auto parts market. China’s auto industry policy stipulates the Compared with joint ventures, there are no restrictions on foreign investment in auto parts. At present, the output of key components such as automotive EFI systems, engine management systems, anti-lock braking systems (ABS), micro-motors, and airbags, and foreign-funded enterprises are 100%, 100%, 91%, and 97% respectively. And 69%.

According to data released by the Ministry of Commerce, foreign investment controls the majority of domestic auto parts sales, domestic sales of parts and components account for only 20%-25% of the total industry, and auto parts manufacturers with foreign backgrounds account for 75 percent of the industry. More than %, of which sole proprietorships accounted for 55%, Sino-foreign joint ventures accounted for 45%, local components were mainly used in their own brand cars, the market share is low.

Previously, in order to revitalize the national auto parts industry, BYD, Great Wall and other vehicle companies stated that not only the whole vehicle must be made by oneself, but also the engines, motors, controllers and even chips must be “hands on”. After that, its self-sufficiency rate for parts and components was once as high as 60%-70%. BYD once claimed that: “In addition to tires and glass, almost all components can be done on their own.” However, this model is like a “short-lived” phenomenon, and related companies have found it difficult to study in depth the internal structures of engines and motors. This year, BYD’s two main models of the G6 and S6 have adopted more and more Bosch parts, and the Great Wall has also frequently announced the signing of cooperation agreements with international giants such as Bosch and Delphi.

Can Overseas M&A Realize "Redemption"?

The development time of domestic auto parts enterprises is shorter than that of whole auto companies. Both the technical details and talent reserves are significantly different from international auto parts giants, and it is difficult to catch up with advanced foreign standards in the short term. To this end, the domestic companies involved in the development of ideas, due to the consideration of industrial strategy development, direct overseas acquisitions. At the previous Guangzhou Auto Show, Geely displayed its 6AT power system and the first domestic model of the Geely Global Hawk GC7 equipped with a six-speed manual transmission. Zhang Xiaoji, director of the China Association of Automotive Engineers, said that Geely has upgraded China's automatic transmission technology for at least five years, and has been freed from the long-term reliance on imports from China's auto transmissions, and has won the initiative for the core competitiveness of Chinese automobiles for the first time.

Experts stated that Beijing Pacific Century Automotive Systems Co., Ltd. acquired general-purpose global steering and transmission business, Jingxi Heavy Industries acquired the United States Delphi shock absorber braking division, Geely acquired Australia DSI, Wanxiang acquired the United States DS, and BYD acquired Japanese Diyuan Abrasives Factory... ... This series of overseas acquisitions has become a shortcut for China's auto parts industry to achieve technological leapfrogging, thereby realizing “potential energy is high”, and overseas mergers and acquisitions will become an important channel for China’s auto parts industry to achieve “redemption”.

As for the problems encountered by Chinese companies in the process of overseas M&A, experts have stated that a strong resource integration capability is a key factor in the success of mergers and acquisitions. Rao Da, Secretary-General of the National Passenger Vehicles Association, affirmed that overseas mergers and acquisitions will increase the level of domestic auto parts, and at the same time, he must be wary of whether the purchased technology is accompanied by a patent right. If there is no patent right, even if 100% purchase shares of the other party, Need to spend money to buy technology, not conducive to changing the status of China's auto parts industry.