China Association of Automobile Manufacturers reminds -

Morning News (Reporter Liu Xiaolin) Foreign-invested companies accounted for 54 seats in the "2005 China's Top 100 Auto Parts" list released by the China Association of Automobile Manufacturers. Jiang Lei, executive vice president of China Automobile Association, reminded: The monopolization ambition of the international auto parts giant is obviously strengthened.

The list shows that after the layout of the domestic vehicle manufacturing industry has basically been completed, the auto parts manufacturing industry with huge market potential has also been taken advantage of by international giants. Considering China's market capacity as the fourth largest country in global auto production, this means that large amounts of profits flowing in the domestic component sector are being earned by foreign companies.

However, the ambitions of the international giants are far more than that. Jiang Lei reminded that foreign-invested Chinese joint ventures are undergoing three transformations: the transition from equity participation to controlling; the shift from joint ventures to sole proprietorship; and the shift from occupying markets to monopolizing markets.

In fact, foreign investment has already secretly strengthened its monopoly in the domestic auto parts market. At present, they not only hold the core technology of some key parts and components products, but also monopolize the market for supporting auto parts manufacturers. At the same time, the system they have built in China from development and training to production and sales has already taken shape, and they have begun to integrate their companies investing in China according to the best division of labor and layout.

In contrast, the malaise of indigenous parts companies is too numerous, their scale is too small, and their ability to independently develop is still severe. This is also evident in the income of the top 100 companies. Last year, the sales revenue of domestic top 100 parts and components companies was less than 1/10 of the world's top 100. Shen Ningwu, deputy secretary-general of the China Association of Automobile Manufacturers, reluctantly stated: “The integration and merger of local parts and components companies is a complex subject that is difficult to operate.” Therefore, under the dual pressure of foreign monopoly forces and domestic auto manufacturers' annual reduction of procurement costs The survival environment of local parts and components enterprises will inevitably deteriorate.

China’s huge business opportunities are the main driving force for the monopoly of multinational corporations. It is estimated that multinational car companies plan to purchase 50 billion U.S. dollars worth of parts and components in low-cost countries by the end of 2007, 70% of which are aimed at Chinese companies.

However, experts pointed out that multinational corporations should take into account China's upcoming implementation of the Anti-Monopoly Law while implementing the monopoly plan. What can be affirmed at present is that the monopolistic behavior that multinational corporations cause through mergers and acquisitions in China will be included in the list of controls.


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