“Because of the customer channel and raw material advantages, more and more large steel mills around the world have begun to set foot in the downstream industry of auto parts industry. POSCO Steel has revealed that it will invest 2.5 million US dollars to establish an auto parts factory. This is the first time for POSCO Steel. It's part of the auto parts business and its virgin investment is in China." Recently, an investment plan of the world’s fourth-largest steel manufacturer and South Korea’s largest steel company Pohang Steel attracted the attention of domestic steel mills, but this investment is not a steel mill. Posco revealed that its two companies will invest 2.5 million U.S. dollars to set up an auto parts plant. This is the first time that POSCO has been involved in the automotive parts business, and its virgin investment is in China. Posco said that its two companies will establish a joint venture with Austem, a Korean automotive parts supplier, to produce body panels and chassis. Among them, Posco's company will hold a 19.9% ​​stake in the joint venture, Austem will hold 80.1%. The joint venture is expected to start production in early 2009 and supply auto parts for Shanghai GM. Such news immediately caught the attention of Baosteel and other related companies. In fact, since 2005, Baosteel, which originally provided only high-quality car steel plates for automakers, has officially entered the auto parts industry, and its business has begun to expand gradually this year. Nowadays, they not only have to rush in the complicated auto parts industry in China, but also immediately face the competition of their brother Pescod in this new field. Thanks to its customer channel and raw material advantages, more and more large steel mills around the world have begun to set foot in the downstream industry of the auto parts industry and snatch huge auto parts cakes. The domestic steel giant Baosteel is an example of this. The relatively new “newcomers†in the parts and accessories industry have ambitions to show off in this industry that is still relatively unfamiliar to them. From joint venture to sole proprietorship In the 105-mu land of Luodian New Town, Baoshan District, Shanghai, an auto parts plant of Baosteel has been quietly built. The company, Shanghai Kebao Automotive Transmission Co., Ltd., is a Baosteel and Canadian auto parts company COURT Group. In the joint venture, the company initially invested RMB 167,998,000,000 and its registered capital was RMB 10.89 million. The two parties contributed 50% each, and they mainly produced automatic transmissions and hydraulic transmission valves. The initial production of semi-finished products was supplied to Canadian NM-PC, and the business was developed. Direct supply to Shanghai GM and other Asian automobile manufacturers. According to report, three years ago, Baosteel officially entered the auto parts industry, starting with the cooperation with the Canadian COURT Group. At the time, in addition to the joint venture with Canadian COURT Group, Shanghai Baosteel Automotive Transmission Co., Ltd. was established in Baosteel, and Baosteel International also acquired COUNT's two plants that produce transmission valves for automatic transmissions. NMPC was established in Canada (Niagara Machines). Products Co., Ltd.). NMPC is located in Gunswell, Ontario, Canada. The company mainly produces variable speed valves in automatic transmissions. This is an extremely high-precision automotive component. The products are mainly supplied to U.S. General Motors' North American production plants. The first partner of Baosteel, COURT Group, has accumulated 15 to 30 years of experience in manufacturing high-precision automotive parts such as hydraulic transmission valves, and is involved in process flow, technical parameters, software systems, early intervention in customers, and product development. There are many independent patented technologies in such areas. These core technologies were later applied to Shanghai Kebao Automotive Transmission Co., Ltd., which Baosteel established in Shanghai. Due to the investment in auto parts industry, this year Baosteel will have two auto parts companies formally put into production. The company is a Sino-Japanese joint venture located in Guangzhou Huadu Automobile City, Mitsui & Co., Ltd., Japan's YOROZU Co., Ltd., with a total investment of 270 million yuan. It will be Dongfeng Nissan's professional auto parts supply company. According to the plan of Baosteel, the company is expected to be fully put into operation in 2008 and plans to have annual sales of 350 million yuan. Through two joint venture experiences, “Breakaing,†Baosteel also began to try to establish its own wholly-owned auto parts business. At the beginning of this month, Shanghai Baosteel Wheel Co., Ltd., wholly owned by Baosteel, was officially launched and its registered capital reached 188 million yuan. The company will focus on the development and sales of all kinds of steel wheels for passenger cars and tubeless wheels for commercial vehicles. The new production base at the Yuepu Industrial Park in Baoshan District of Shanghai will also be launched. The company plans to start production in 2009. Baosteel related sources revealed that in the future, Baosteel will also use a variety of methods, such as new construction and mergers and acquisitions, to gradually form multiple production bases and a pattern of large-scale production and operation. The internal plan is to occupy 50% of the Chinese steel wheel market and become a domestic product. The largest passenger car steel wheel professional enterprise. The ambition of Baosteel in the field of steel wheels for vehicles is indeed more than just talk. According to report, after the establishment of Shanghai Baosteel Wheel Co., Ltd., the original steel wheel manufacturing plant of Shanghai Automotive Forging Co., Ltd., which was affiliated with SAIC, was also officially incorporated into Shanghai Baosteel Wheel Co., Ltd. This company, which has a history of over 60 years, is the earliest and most technologically advanced manufacturer of steel wheels for passenger cars in China. It is also an exclusive supplier of steel wheels for customers such as Shanghai Volkswagen, Shanghai General Motors, and SAIC Motor. Open up the industry chain These are just the "tips of the iceberg" for Baosteel to enter the auto parts industry. A senior Baosteel Group disclosed that Baosteel has formulated the “Auto Parts Industry Development Plan†and will gradually enter the auto parts industry in an all-round way, focusing on the production of wheels, bodywork, power transmission systems and chassis systems in the future. In the past six years, it has become bigger and stronger through joint ventures, equity participation, and mergers and acquisitions. It strives to make Baosteel's automotive parts and accessories industry into the top three in the domestic industry. “At present, the main steel industry of Baosteel has entered a period of stable development. While expanding and strengthening the main industry, Baosteel's new round of development plans will be dominated by the entry into the auto parts industry, which will open up its upstream and downstream industrial chains.†Li Haiping, deputy general manager of Baosteel, told reporters last Saturday that the reason why Baosteel selected the auto parts industry for its strength was mainly to find out its industrial advantages in raw materials and processing. At present, the automotive vehicle manufacturing industry and its closely related auto parts industry, such as automobile plates and special steels, are the main products of Baosteel, and the major domestic vehicle manufacturers are customers of Baosteel. According to the data of the Iron and Steel Industry Association, Baosteel has occupied 50% of the domestic market for cold-rolled automotive steel plates, and the other 50% is basically dependent on imports. Therefore, at the same time that other domestic parts and components manufacturers have repeatedly raised prices for raw materials, and the products have been repeatedly forced to cut prices, Baosteel has had natural advantages in entering the auto parts industry for customers and raw materials from the outset. On the other hand, a middle level of Baosteel's sales center explained to reporters that the processing of auto parts and steel processing is similar, and Baosteel has accumulated many years of experience in steel processing and has established 32 nationally. Home plate shear center. Generally within one kilometer of the locations of FAW, SAIC, Dongfeng and other companies, there will be Baosteel's steel plate shearing centers. These auto companies have already outsourced the processing of cutting automotive steel plates to Baosteel. “Baosteel previously expanded its steel processing and distribution centers to provide steel manufacturers with steel storage and shear processing services. Now it is also announcing its entry into the auto parts sector. Various initiatives are aimed at further stabilizing the automotive market by seizing market channels and intervening in joint development. The dominance of the company,†said an auto industry analyst at Shanghai Securities. With the gradual increase in the production of automotive steel plates, Baosteel's involvement in the auto parts industry is also accelerating. According to the company's development plan, the development of the auto parts industry will draw on the development model of leading companies such as ThyssenKrupp and Sumitomo of Japan. Through joint ventures, equity participation, and mergers and acquisitions, it will cooperate with internationally renowned professional manufacturers to first intervene in the domestic auto parts industry. , And then become a well-known auto parts manufacturer and supplier with research and development capabilities, large-scale manufacturing system, independent intellectual property rights, international marketing network, and global famous brands. According to the reporter's understanding, in addition to cooperating with Canadian and Japanese companies, Baosteel currently conducts technical and business exchanges with Italian and US manufacturers, and plans to build steel wheel manufacturing bases throughout the country, as well as with a number of vehicle manufacturers. Talk about car body cooperation projects. At present, the profit prospects of the domestic auto parts industry are still promising in the industry. According to relevant statistics, China's auto parts market is still in a stage of rapid development. In 2007, the total output value of parts and components industry reached 670 billion yuan. However, at the same time, risks coexist. At present, the domestic auto parts industry is in the initial stage of industry consolidation and reshuffling. The industry concentration is not high, the technical grade and scale effect are not high, and the auto parts production of the three major auto groups also has a large market advantage. The giants of parts and components production are gradually expanding into Asia, especially China. These have undoubtedly increased the difficulty for Baosteel and other steel companies to get involved in the auto parts industry. “Baosteel has already recognized the fierce competition in the industry. We will also select key businesses to intervene and we will use our strengths to make up for the deficiencies of new entrants,†said Li Haiping. 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