Strategic conception of the rise of domestic auto parts industry

The newly promulgated "Automobile Industry Development Policy" puts forward important policies such as "to encourage and cultivate a group of parts and components companies with comparative advantages to achieve large-scale production, enter the international auto parts procurement system, and actively participate in international competition." Big groups and large-scale development are increasingly important conditions for future parts and components companies to participate in international competition. Currently, in the international market, annual sales of US$10 billion represent the basic scale of global suppliers of spare parts. There are now 25 global parts suppliers with sales of more than US$7 billion and sales of 7.5 million. The $2 billion component company can only become a regional strategic partner for global suppliers, responsible for the development and production of subsystem components. It is estimated that by 2010, China's parts and components companies will undergo a joint and reorganization, and the overall number will decrease by 70%, eventually forming 20-30 first-tier suppliers, 250-350 second-tier suppliers and 1250-1500 third-tier suppliers. . In the face of fierce competition, domestic parts and components companies need to become stronger and stronger, become internationally competitive enterprises (groups), become strategic suppliers of global suppliers in China, and in the future international parts procurement system. To occupy a place, we must choose the right development strategy. The status quo of the industries that cannot be optimistic As a whole, at present, China's auto parts enterprises are at a lower level, with small companies, low industrial concentration, and weak product development capabilities. Export products are mainly concentrated on mechanical parts with relatively low technological content, and the quality of products is poor. Due to institutional reasons, a large number of parts factories have a low degree of concentration, resulting in repeated dispersion of cars and parts industries, small scale, and poor quality. At the same time, the parts companies themselves have unreasonable structures and low levels of specialization. The "scattered spread" is the best summary of the current domestic parts and components companies. If the classification is compared, the first is the difference in sales revenue. China's 54 auto parts industry sales revenue (including supporting and after-sales market) of more than 200 million yuan in the 54 companies, its total sales revenue is only 3.4 billion US dollars, even with the world's top 100 outstanding company sales revenue In comparison, there is a big difference. The second is the gap in high-tech content. The technical contents of China's manual transmissions for cars, mini-car engines, dashboards for cars, and steering wheels are of the international level in the 1980s and do not contain electronic control technology. The products of the world's 100 largest auto parts companies are new products in the late 1990s. Even if these companies produce conventional products, their technical content also represents the level of the end of the 20th century. The third is the gap in research and development capabilities. At present, the United States has successfully developed a 100-kilometre fuel consumption 3L vehicle after the European and Japanese operations. It has also outperformed blue in space and safety, and achieved great results in the development of fuel cells. In contrast, the latest round of imported cars in China was mostly manufactured in the mid to late 1990s. The fourth is the gap in production and supply methods. The revolutionary changes have taken place in the production and supply of auto parts products in the world. The establishment of modularization and promotion of the “ready-to-install” assembly concept has had a positive impact on improving the operational efficiency of the automotive industry, reducing production costs, and increasing market competitiveness. This method has been widely used abroad. In China, although small-scale modular supply methods have begun to be used by some companies, they are only at the initial stage. Finally, there is a gap in the supporting relationship between parts and components companies and automakers. In foreign countries, the relationship between automakers and OEM companies is completely based on the laws of market economy. Under this premise, as long as the price can be met, technical standards are met, quality is reliable, and services are in place, the cooperation between the two can be concluded. In China, due to the influence of affiliation, regional division, and other factors, all regions and major groups have their own groups of auto parts supporting companies. This has caused the phenomenon of “scattered spreads” in auto parts companies to remain unchanged. The Strategic Concept of Carrying Hopes Today, the rapid development of China's auto industry has enabled component companies to become bigger and bigger and achieve leapfrog development, bringing unprecedented market opportunities and development opportunities. In recent years, China’s auto industry has grown at an average rate of over 25% a year. In 2003, China’s auto production exceeded 4.4 million, and its output ranked third in the world. This year it will exceed 5 million vehicles and the total demand will reach 593 next year. Ten thousand vehicles will reach 9.94 million by 2010. According to the annual automobile output value of about 300 billion yuan and the proportion of components and parts that account for about 60% of the total vehicle production value, the domestic auto parts market will have an annual output value of about 180 billion yuan or more in the next few years. Therefore, domestic large and medium-sized component companies should seize the opportunity to strive for large-scale enterprises to enter the top 50 global auto parts enterprises before 2015, and medium-sized enterprises to enter the top 200, becoming the first-class auto parts with global competitiveness in the global spare parts industry. (Group) company. Today, with opportunities and challenges coexisting, according to the development experience of foreign auto parts companies, the following conceptions can be referenced in the selection of development models and development strategies for domestic parts and components companies. The choice of development model. The first is the leapfrog development model. In recent years, due to the rapid development of China's entire vehicle and the rapid expansion of multinational parts and components and the rapid development of private enterprises, domestic parts and components companies are required to break the conventional development ideas, choose a leap-forward development model, and make the company's core competitiveness. In the short term, there will be a greater improvement and leaps in overall strength. The second is the market organization mode. Establishing market-oriented systems and mechanisms is the prerequisite for achieving leap-forward development. All companies must take advantage of the development opportunities of international joint ventures and cooperation to accelerate the re-construction of systems and mechanisms, create their own trademarks and independent brands, coordinate the development of three major functions of strategic decision-making, resource coordination and capital operation, and quickly increase the efficiency of decision-making and market adaptation. Market, rapid development capabilities. The third is a large-scale production model. Large-scale parts and components enterprises must give full play to the “big group” advantages of modernization and production of the parent vehicle enterprises, and adjust the “small and complete” product structure according to the direction of specialization and large-scale development, and achieve specialization and economic mass production on products. In the overall realization of the scale of production and management. The fourth is the capitalized business model. It is necessary to use capital operation as an important means to achieve leapfrog development for all parts and components companies. In accordance with the development model of “supporting capital operations with product operations and expanding product operations with capital operations,” the company’s business areas and operating scales are rapidly expanded through capital operations. The fifth is a neutral business model. The neutralization of parts and components companies is the direction of future development. Domestic parts and components companies must accelerate the pace of joint ventures and cooperation with international parts and components companies and the pace of restructuring. Through international joint ventures, cooperation and restructuring, the company will gradually realize the development of neutralization and open up two markets, namely the domestic vehicle market and the international market, to do large-scale production and management. The choice of development strategy. The first is the joint strategy of the industry. As the competition pressure of vehicle companies intensifies, the pressure of competition must be transmitted to parts and components companies. This requires parts and components companies to reduce costs and do large-scale operations. The most effective way is to implement joint operations with the industry to achieve the market as far as possible. Maximization, maximization of benefits, and minimization of costs. Domestic parts and components companies should have open minds and look at international perspectives, abandon the competition methods of singles and divisions, and conduct extensive cooperation so as to achieve complementary advantages and resources sharing, and achieve leapfrog development in strength and scale. In May 2004, when Hu Maoyuan, president of SAIC Motor Corporation, visited Dongfeng, the leaders of the two groups affirmed the results of the cooperation between Yanfeng Visteon and Dongfeng Visteon during the talks. At the same time, they proposed to cooperate extensively in parts and components. The two parties proposed to open up the parts market to each other, and the two parties divided the parts and components companies into three categories. One is that there is no competition between the two companies, and the other is to merge development, sharing the two complete vehicle markets of SAIC and Dongfeng; and the second is competition. For the time being, each of them develops on its own initiative; the third category is that the two parties do not have, and they cooperate and develop jointly. The two parties also proposed that, under conditions of mature conditions, the company should cooperate with FAW to expand cooperation in parts and components, jointly improve industry standardization work, break down technical barriers to enterprises, and achieve market and resource sharing. For other domestic parts and components companies, they should also learn SAIC and Dongfeng's practices, so as to ultimately increase the basic research level of the Chinese automobile industry, and promote the rapid progress and rapid expansion of the domestic auto parts industry. The second is to implement the merger and reorganization strategy. Make full use of the company's products, technologies and markets, and take advantage of product attributes as a link, expand the market as a precondition, use capital operations as a means, and integrate industry-wide and society-wide superior resources to conduct mergers and acquisitions and strong alliances. Through the integration of resources and mergers and acquisitions to make full use of the company's effective stock of assets, access to social resources, to achieve the expansion of capital and the formation of a strong capital strength. The third is the implementation of international cooperation strategy. It is necessary to rapidly increase competitiveness and gain competitive advantage through international cooperation; obtain support for capital, technology, products, and management of the company in future development through international cooperation; enter the supporting system of partners through international cooperation and integrate into the global system; Cooperation to reverse the development of parts and components lagging behind the passive development of vehicle development. The last step is to implement a differentiated development strategy. By stabilizing and expanding the commercial vehicle market, exploring and extending the passenger vehicle market, we will focus on the development of product adjustment strategies for high-tech products and the development ideas of “doing something, do something wrong,” and adopt a differentiated development strategy for the development of this enterprise. The company will expand its product range from commercial vehicle products to passenger vehicle products, gradually withdraw products that have not been achieved, and concentrate on advantageous resources to develop high-tech products with high added value and high technology content that represent future development directions.