Local parts companies started to boom


The author recently visited several parts and components companies in Chongqing and felt the vitality of China's spare parts companies in the Chinese market and global automotive supply chain.

The workshops of Chongqing Duke High Pressure Seals Co., Ltd., Chongqing Zhongyi Shock Absorber Factory, Chongqing Kafu Automotive Brake Steering System Co., Ltd., and Chongqing Chaoli Hi-tech Co., Ltd. are all running at full capacity, and some even euphemistically reject orders. Outside the door. "We can't really do it." "We don't develop big customers anymore." It is based on this situation that some parts and components companies are already selecting customers. “We are now working with companies that have good reputation and prospects. We are gradually reducing our share of low-margin mini vehicle parts and components.” said the general manager of a company.

Not just supply exceeds demand. Some Chinese domestic parts and components companies have greatly improved their product mix in the past two years. Its main performance is a substantial increase in the share of auto parts products with higher profits. In 2006, the proportion of car shock absorber sales revenue of Chongqing Zhongyi Shock Absorber Factory increased from 10% in 2005 to 36%. In the past, Chongqing Kafu, which only used commercial vehicle steering equipment, invested more than RMB 30 million in the past year, introduced foreign complete equipment and built a new passenger car parts product line. Subsequently, Lifan, Chongqing Qingling, SAIC-GM-Wuling and other vehicle companies chose Chongqing Cafu's products.

Chongqing is only one of the cities where China's auto parts industry is relatively concentrated, while Sino-Italian and Kafu are only two of China's local parts and components companies. Many Chinese domestic parts and components companies, such as Sino-Italian, Kafu, are facing the rapid development of self-owned brand cars. This situation is a historic opportunity for local auto parts companies to explore the auto parts market.

In fact, it is not just China's buyers who open the door to Chinese domestic companies. Although vehicle companies in countries such as Japan are not willing to hand over orders to Chinese parts companies, they have found that the consequences of not coming to China for purchase are unimaginable. “A lot of foreign companies have realized that there is no hope that they will not come to China for procurement.” A government official who has been in contact with multinational parts companies has expressed the helplessness of multinational corporations under the pressure of cost.

This is exactly the case. Ford, PSA Peugeot, General Motors and other multinational automotive companies have set up procurement centers in China. At the same time, Delphi, Valeo and Others have also set up procurement offices in China.

There are new signs that joint ventures and wholly foreign-owned parts and components companies do not have full advantages in order battles. Some analysts believe that the cost of manufacturing parts and components in the United States into China is actually lower than that of its local factories, but it is higher than that of Chinese local parts companies. Therefore, foreign parts companies have come to China to compete with local parts companies. Not necessarily winning.

The story of Chaoli Tech has proved this analysis. Chaoli High-tech executives told the reporter that Chaoli Tech has become Valeo’s global market supplier; entering this system must meet its procurement standards; Valeo’s several joint ventures in China have also been working hard to enter this system. , but never passed the assessment.

The person in charge of the Sino-Italian shock absorber plant believes that in the shock absorber industry, foreign-funded enterprises do not have an advantage. He said that many foreign-funded enterprises are not as good as Chinese local companies in the flexibility of transactions. Therefore, although foreign-funded enterprises are slightly higher in terms of product quality stability, they are not welcomed by buyers, especially Chinese vehicle manufacturers.

Experts in the industry pointed out: “In 2006, the local parts companies were faced with the danger of marginalization,” and foreign-funded enterprises pushed local parts and components companies to the edge of the cliff. In 2007, Chinese domestic parts and components companies did not really fall out. Under the cliff, on the contrary, most of them are prosperous."

There are various indications that China's domestic parts and components companies are or have already broken through the bottleneck of the earlier period. However, observers believe that the main reason for the local parts and components companies to make a turn for the worse this time is the external factors such as industry changes and international division of labor. This breakthrough will bring about a loose growth environment for it, but this is only the beginning. In the process from small to large, from local to international, from weak to strong, from low to high, there are still many bottlenecks waiting for China's local auto parts companies to break through their own efforts.

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