Multinational companies of auto parts and components in China should be strengthened and controlled

It is reported that this year the Chinese government may make drastic changes to the "Automobile Industry Development Policy." I believe that both the auto industry than the release of the joint venture shares, mergers and acquisitions car prices, new energy policies, if compared with foreign parts industry in China joint venture (or sole), the new "Auto Industry Development Policy" should first Adding controls on the "viral" of overseas auto parts multinationals in China without restriction and extension, and putting a "sweeping spell" on them. Otherwise, the Chinese auto industry will die because of "parts and components", and local auto brands will have full-scale vehicles. The army was destroyed and destroyed, and will continue to serve as an overseas colonial factory for multinational auto companies. It can only be big and never be strong.

Due to China's accession to the WTO's WTO clause in 2001, it only limits the number of joint ventures for joint-venture vehicles, but does not involve the limitation of the ratio of auto parts joint ventures, and the foreign shareholding trend is obvious. Even more incredible and puzzling is that in 2004, the "Development Policy of the Automobile Industry" promulgated by the National Development and Reform Commission simply abolished the limitation on the number of shares of foreign-invested parts and components, and overseas auto parts capitalists could freely join joint ventures in China without restriction. Or wholly-owned, China's auto parts industry and the huge market unconditionally surrendered to overseas auto parts predators.

According to data from the Ministry of Commerce of the People's Republic of China, overseas capital controls the majority of domestic auto parts sales. In 2012, sales of self-owned domestically owned parts and components accounted for only 20%-25% of the entire industry, while auto parts manufacturers with foreign investment background accounted for more than 75% of the industry. Of these foreign suppliers of parts and components, wholly-owned enterprises accounted for 55% and Sino-foreign joint ventures accounted for 45%. Autonomously funded parts and components enterprises are basically in a state of marginalization, and the market share has been rapidly shrinking year by year. Its state of survival is not optimistic.

At this stage, most auto parts companies in China are at the low end of the value chain, and share a limited number of key core components such as brake systems, transmission systems, steering systems, air conditioning systems, and electronic controls. All foreign companies are in full control of profitable, core technologies and high-end, profitable auto parts in the value chain. It is not a joint venture or a sole proprietorship.

The so-called joint venture is only a means for multinational auto parts companies to obtain orders in China. It is a stepping stone for the current monopoly of auto parts companies in the present or future. Originally, foreign capitalists chose the joint venture model only to obtain the market through the joint venture. After the capture of a certain market share, they would still choose to invest in a larger-scale business expansion.

In recent years, China’s booming vehicle market will inevitably spawn a huge component industry market and extend to the upstream of the industry chain. Therefore, for a long time to come, both sole proprietorships and joint ventures will become the Chinese auto parts market. Leading power. Foreign-funded parts and components factories in China are basically dominated by wholly-owned or wholly-owned companies. Nowadays, there are few cases of willingness or refusal to establish joint ventures, and joint ventures between multinational parts companies and domestic parts and components companies have disappeared very little. Prior to this, multinational parts and components companies hoped to use the joint venture with OEMs to gain market access. At present, foreign-owned parts and components companies that have mastered mainstream technologies and competitiveness are still choosing to expand their own investment strategy. Initially, choosing a joint venture was just a tactic to gain market dominance. The newly opened companies such as Bosch, Foglia, TRW, Mahler, Schaeffler, ZF, etc. are all based on sole proprietorship. Even if some parts and components companies choose joint ventures, key spare parts enterprises are still mainly based on sole proprietorship, which directly leads to high-tech and key parts of key technologies such as automotive electronics and engine parts, and foreign-controlled market share is as high as 95%.

Since the first day of overseas component giant capitalists' entry into the Chinese market, they have monopolized and controlled China's parts and components in high-tech and core technologies. Nowadays, overseas parts and components also rely on China's consumption upgrades to meet the demand for foreign-owned spare parts. While maintaining the existing high-end product market, they also continue to expand into low-end and mid-range markets, such as building joint ventures with local auto companies and autonomous high-end products. Joint venture brands share parts supply channels. It can be seen that the multinational automobile company's strategy in China has undergone a new change. In the non-core parts and components sector, the proportion of foreign capital has also gradually increased rapidly, and it has achieved large-scale production of streamlined production. The "failure" and "decline" with which it waned, one after another quickly squeezing into the vassals of foreign capitalists and overseas colonial factories.

At the same time, due to the lack of independent research and development capabilities and core technologies, Chinese auto parts and components companies’ products and markets are mainly concentrated in the low-end, especially in automotive electronics and electronically-controlled mechanical parts and new products with high technological content. R & D and innovation are seriously inadequate, so the joint venture approach to reduce the risk of becoming an indigenous auto parts company is the only way to seek survival without help, which also pave the way for the extrusion of independent brands' living space.

The cost advantage of production is destined to ensure that overseas giants will seize the Chinese market and cultivate their own joint venture component companies in the Chinese market. For a long time, the foreign partners of the joint venture have also brought in parts and components systems. The local parts and components companies have been excluded and there is no chance to compete. The right to purchase parts and components is basically in the hands of foreign partners. The Chinese joint venture company has absolutely no With regard to the dominant power, foreign parties have obtained huge profits by controlling the parts procurement system.

The in-depth development of multinational foreign-investment parts and components enterprises not only squeezed the existence space of self-owned brands, but also became a magic weapon to obtain profits. China's independent parts and components companies can only use limited resources and cheap labor to maintain market share. It is extremely difficult to maintain the system. It is not the recruitment of foreign capital that is the merger or bankruptcy of a bankruptcy bank. The development is not optimistic.

Take Japan's Toyota and Nissan Motor Co. as examples, before entering China, first allocate some of its own equity-participating parts companies to the domestic market to form a full-time supply, and most of these suppliers belong to the “institutional” partners of the two companies. Japanese vehicle companies have brought in Denso, Aisin, etc.; Korean automotive companies have brought Mobis to the modern; German vehicle Volkswagen, Mercedes-Benz, and BMW have brought Bosch, etc.; US-based GM and Ford vehicle companies Bringing Cummins and so on, the local parts and components companies are basically excluded from the system.

Although most vehicle manufacturers in China have formed a change in the understanding of spare parts from purchase to establishment of a supply chain system, they lack the ability to integrate supply chain resources, including core component development, system matching capabilities, and standards for supplier evaluation. The lack of such capabilities and the ability to control costs, etc., are also very important factors in the slow growth of China's spare parts enterprises.

However, it is undeniable that there are indeed differences in quality and gaps between the products of local parts and components companies and the parts and components companies of foreign-funded systems. For domestic auto OEMs, it is indeed cheap to use domestic-made parts brands, but domestically Consumers do not recognize. With these international brands of parts and components, international technology and regulations are stricter and more regulated than those in the country. Although the prices are higher, such costs are worthwhile. The domestic OEMs have also begun to leave domestic parts suppliers. The reason why local car companies do not dare to use their own parts is mainly due to the inability of these parts to work, refine, or intrinsic performance. fulfil requirements. It is a joint venture or wholly-owned enterprise that now occupies and dominates the dominant position of Chinese auto parts. Behind these international parts and components is the direction of technological development in the world. Both the advancement of technology and the consistency of quality are stronger than those of domestic capital and auto parts companies. . In addition, the general public's immoderately ambivalent mentality is in the form of blasphemy, etc. These internal and external factors have caused foreign capital to invade and dominate the Chinese auto parts market.

Looking at the "great situation" since the introduction of China's reform, opening up, and automotive industry policies, multinational auto parts companies have been committed to infiltrating and comprehensively controlling China's market share through joint ventures or joint ventures to become sole proprietorships. Such as ZF ZF, Cummins, BASF, Bosch, Delphi, Siemens, Continental, Denso, Lear, Deutz, BorgWarner, Goodyear, Dana, Cooper, Federal-Mogul, Meritor, Dana , TRW (Tianhe), Visteon, Autolid and other international component giants, in addition to establishing their own one or N R & D centers in China, and in the country's marketing channels, and rooted in the penetration of the local market, foreign investment The strategy and tactics of the component giants have made their penetration rate in the automotive industry in China higher and higher, and the influence of comprehensive control has also grown. China's auto industry is getting deeper and deeper in parts-control swamps and can only become The global automobile production and sales country does not hope to become the world's automobile power.

In 1992, Faurecia entered the Chinese market, and in 1994 it began to provide automotive emission control technology products to Shenlong Automotive through its joint venture with Hubei Tongda Co., Ltd. In the following 20 years, Foglia's other three business systems - seat systems, interior systems and exterior systems - entered the Chinese market one after another. Faurecia's business scope in the six major automobile production areas has continued to expand. Currently, Foglia has 36 factories, 4 R&D centers and nearly 10,000 employees in China. Foglia has four major business segments: car seats, emission control technology, automotive interiors and automotive exteriors. Currently, the joint venture focuses on automotive seating and automotive interiors. The dependence of production companies is relatively large.

In 1996, WABCO cooperated with Mingshui Auto, a well-known manufacturer of automobile brake systems, and jointly invested USD 12 million to establish a joint venture in Shandong Jinan Automotive Products Co., Ltd. Among them, WABCO owns 70% of the shares of the joint venture company, and Mingshui Auto Parts accounts for 30% of the shares. The joint venture company mainly produces conventional brake products, including foot brake valves, hand brake valves, air handling units, air dryers, four-circuit protection valves, pressure regulators, trailer control valves, and brake air chambers.

Bosch's sales in China reached 41.7 billion yuan in 2012, accounting for more than 10% of its global sales. Over the past 10 years, Bosch has achieved a compound annual growth rate of 25-30% in China. Now that China has become Bosch's largest overseas market, Bosch plans to continue to invest more in the Chinese market. In 2013, it plans to develop automotive technologies and after-sales services. Markets and other areas have increased investment by 3 billion yuan. Xu Daquan, executive vice president of Bosch (China), stated that China's spare parts companies have also achieved certain development since China's accession to the WTO. However, China’s society is impetuous and it is difficult to engage in basic research. Even university professors are busy finding projects to make money. This is also a major obstacle to Chinese parts and components.

At the end of 2013, WABCO announced that it had acquired a 30% stake in Shandong Mingshui Auto Parts Co., Ltd. in Shandong Weiming Automotive Products Co., Ltd., making Weiming Co., Ltd. the third wholly owned subsidiary of WABCO in China. As a global supplier of commercial vehicle safety and control systems, WABCO manufactures and sells commercial vehicle air management systems, brake stabilization systems, suspension control systems, and transmission control systems and components for trucks, trailers and passenger cars in China.

In 2013, Remy International and WABCO acquired Chinese shares in their respective joint ventures, thereby turning them into wholly-owned companies. For the acquisition of all the Chinese shares, Remy International official said that this is an important milestone in Remy International's global strategic plan. Remy Electric Hubei Co., Ltd. was originally established by Delphi Automotive Systems China Investment Co., Ltd. and Hubei Shendian Automotive Motor Co., Ltd., and is mainly engaged in the design, production and sales of starters and generators for passenger cars, passenger cars and trucks;

In May 2014, Johnson Controls and Yanfeng Automotive Trim Systems Co., Ltd., a wholly-owned subsidiary of SAIC Motor’s subsidiary, Huayu Automotive, signed an agreement to jointly establish a global joint venture for automotive interiors. Beijing Auto Group has just formed a joint venture with Siemens to form Beijing Siemens Automotive Electric Drive System Co., Ltd. The world’s sixth-largest auto parts supplier France Foglia will promote its business development in the Chinese market through a joint venture...

On June 5, 2014, Toyota, Nissan, Honda and other 8 Japanese passenger car companies, 4 truck companies including Hino Motors, Yamaha Motors and Kawasaki Heavy Industries will jointly establish the "International Standards Symposium". High parts, such as body steel, steel, resin materials, and automotive semiconductors. Prior to this, various car companies in Japan have been designing parts and components according to their specifications and ordering from suppliers. However, as Japanese car companies go global, participate in more intense international competition, lower production costs, promote standardization, and achieve an effect of reducing the cost of parts procurement by about 5%. Reducing the cost of development and production of parts and components, reducing duplication of investment, adopting uniform standards, and confronting leading European companies in the development of international standards for automotive-related technologies.

TRW Automotive Holdings Corp., one of the world’s top ten auto parts suppliers, has established more than 20 OE joint ventures with different products in China, subdividing and occupying various markets. Delphi Packec Electric Company is the largest in the world. Manufacturer of automotive wiring harness systems, Fortune 500 companies, and companies listed on the New York Stock Exchange. Currently, Delphi’s subsidiary systems are located in various major automotive OEMs in China, and are almost all major vehicle manufacturers in China. Supply includes FAW-Volkswagen, General Motors, Shanghai Volkswagen, Dongfeng Nissan and Chery.

The core automotive parts and components are also the key to the survival of independent brands, the foundation for the development of the automotive industry, and the weaknesses and shortcomings of our building a strong automobile country. Chinese corporate products are still concentrated on low-value-added, high-energy-consumption, low-tech labor-intensive products. Research and development capabilities are weak, and products lack competitiveness. Enterprises have to occupy the market by reducing costs.

In terms of product structure, taking transmission as an example, the current status of foreign-funded automatic transmissions cannot be replaced in the Chinese market. The market share of automatic transmissions developed by China is very low, and dependence on foreign capital will continue for a long time. . In addition, there are major zeros in air conditioning systems, airbags, ABS systems, automatic sunroofs, seat systems, safety systems, brake systems, lighting systems, automatic transmissions, suspension systems, steering systems, engine control systems, and precision castings. All parts systems are made by foreign capital, and their market share has been increasing year by year. At the same time, their technological R&D and talent allocation are slightly higher than domestic spare parts companies.

The wholly foreign-owned parts and foreign-funded wholly-owned or joint venture companies have increased their localization to the Chinese market, and now the pattern of China's existing parts and components companies has been completely changed. Foreign-funded parts and components companies further suppressed and squeezed the living space of local auto parts companies and became the main culprit of the destruction of China's domestic parts and components industry. Chinese comprador officials became accomplices, and China’s auto industry policies that had been overdue by the time had acted as catalysts. Boosting effect.

Since the reform and opening up and accession to the WTO, the Chinese auto parts industry has not grown up, and it has increasingly fallen into a foreign-owned overseas colonial factory. This is not unrelated to the Chinese auto industry policy's lack of influence on the local auto parts industry. For example, in recent years, China’s motor vehicle’s emission history from the country I to the country V has been more than a decade ahead of the developed countries in Europe, the United States, and Japan due to political achievements and the need for international recognition. The key parts of the EFI system, from carburetor to electronic injection control and the high-pressure common rail that determines the commercial vehicle emissions of compression-combustion diesel engines, are all controlled by joint ventures or wholly-owned foreign companies such as Bosch, Delphi and Denso. With regard to monopoly, China cannot even involve this high-tech field. What is even more regrettable is that it cannot be cloned and surpassed in terms of materials and manufacturing processes. Domestic auto manufacturers can only purchase high-priced flowers at high prices, and foreign companies can earn one by one. Too full.

There is no doubt that the current overseas capitalist parts industry has fully controlled the "brain", "gastric" and "anal" life movements of Chinese cars. In this situation, it is still talking about self-owned brand cars and the dream of the world's automotive powers! It is a guarantee for the safety of China's auto industry. Without the support of a strong independent brand, the profits of the Chinese auto industry will be severely outflowed. The bubble of the false prosperity of the Chinese auto industry will always be disillusioned.

With the continuous expansion of the scale of China's auto industry, the lag in the development of auto parts and components has brought more significant impact on the development of the auto industry. Automobile manufacturing is a manifestation of the country’s overall manufacturing level. Parts and components are the basis for the development of the automobile industry. The development of the automobile parts industry plays an important role in the development of the entire automobile industry. The current automobile industry policies are mostly directed at vehicle companies, and there is little support for the parts and components industry. This directly leads to a high degree of “hollowing” in the auto parts industry in China, which in turn results in weaker market competitiveness and serious impacts. The level of profit.

China's auto parts industry needs to be bigger and stronger. It needs the state to take the strategy as a guideline. It must reorganize and formulate policies related to the control of the spread of foreign-owned and wholly-owned spare parts companies' virus-like blindness. Can it be the same as a vehicle? The spare parts companies set share ratio requirements and implemented policy support for local self-owned brand policy parts and components enterprises, such as tax deductions and exemptions on taxes collection and increase their investment in research and development, etc., in favor of independent brands. Automotive development environment.

At present, in the face of the pressure of expansion of multinational auto parts companies, during the process of development of energy-saving and new energy vehicles by the auto industry, whether auto parts enterprises in China can keep up with the pace of industrial transformation and upgrading, and promote relevant intellectual resources to enhance the auto industry's innovation capability. The promotion of zero-strategic strategic cooperation and the promotion of corporate competition are the “life-and-death-like” aspects of China’s auto parts industry.

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