Foreign investment in the auto parts market is about to usher in integration

The auto parts market corresponds to the automotive service industry in China. In the future profit distribution of the auto industry, the parts and components market will become a profit segmentation as opposed to the new car market. However, from the current development status of China's auto parts market, there are at least three levels of problems in the market. First, although there are a large number of parts and components in China's independent industries in the parts and components market, there is still a complete lack of parts and components markets. For example, in terms of airbags, China still needs a lot of imports. Second, in terms of market share allocation, China's spare parts market has a regional pattern, and it can even be said that a group of vehicle manufacturing areas contains numerous parts and components manufacturing companies, which is a huge waste of market resources; Third, the lack of research and development capabilities lead to China's spare parts It is difficult for enterprises to grasp the market opportunities, and the lack of core competitiveness leads to the limited expansion of enterprises.

The root cause of the above problems lies in the fact that China’s auto market has not yet been opened, and automakers of independent brands have not integrated their industrial chains in accordance with the relevant documents of the State Council. From what we have learned about the integration of parts and components markets in parts of Hebei, the auto parts market has not formed a trend of large-scale integration in other regions. Even the expansion of trade barriers continues, and it has made it difficult for the parts and components market in China to reach Zhejiang. The full release of market potential is even more difficult to get out of domestic expansion markets. However, this phenomenon is expected to be disrupted by the sudden foreign capital invasion. At the end of last year, the “Foreign Investment Industry Guidance Catalogue (Revised in 2011)” promulgated jointly by the National Development and Reform Commission and the Ministry of Commerce removed the automobile manufacturing items from the encouragement category and increased. The key components of automobiles and the cultivation of strategic emerging industries means that the production of foreign capital will change the current market structure.

On the one hand, we believe that the invasion of foreign capital has a certain degree of blow to domestically-owned parts and components companies. For example, foreign capital in the coastal market will use the advantage of technology and capital to expand for the first time, and it is expected that a competitive advantage will be formed within 5-10 years to divide the regional market. Relatively speaking, domestically-manufactured parts manufacturing enterprises in China are hard to obtain a market. Competitive power. The change in market share will reverse the market consolidation efforts. According to the distribution of the three major manufacturing belts in the current parts and components manufacturing market, local governments in these areas will become the key drivers for resource integration, and vehicle manufacturers will also One direction will be expanded so that the integration of auto parts in China will be resolved.

On the other hand, foreign capital invasion will also bring certain benefits for the development of China's auto parts enterprises. The advantages of the joint venture from the benefits of integration will provide a broad platform for technology simulation for the development of China's parts industry. Similar to the vehicle manufacturing industry, some foreign companies have to look for large-scale local component manufacturing companies to cooperate in order to ensure that they do not risk localization, which will prompt China’s auto parts market to get rid of the phenomenon of weak scientific research and incomplete varieties. In the process of joint ventures, a part of domestic auto parts companies with advanced technological advantages and policy support advantages will be gradually formed, which will truly promote the full expansion of China's spare parts market.

The "2012-2016 China Auto Parts Industry Investment Analysis and Prospects Forecast Report" provides statistical data from an investment perspective. In 2010, China's auto parts and components manufacturing industry showed rapid growth, the industry boomed substantially, and industry profits rebounded sharply. . From January to November 2010, the total sales revenue of auto parts and accessories manufacturing industry (the sum of sales income of industrial enterprises above designated size) was 1,496.944 billion yuan, an increase of 42.32% year-on-year, which was higher than the industrial average (an increase of 31.78%). From January to September 2011, sales of China's auto parts and accessories manufacturing industry grew faster. From January to September 2011, the total sales revenue of auto parts and accessories manufacturing industry reached 1,417.792 billion yuan, a year-on-year increase of 24.40%.