Ten years after joining the WTO, Adou became a shortcoming in the automotive industry

"Parts and components are the basis for the development of the automobile industry and also a short board for us to build a powerful automobile country." Dong Yang, secretary general of the China Association of Automobile Manufacturers, said that he was looking forward to the "12th Five-Year Plan" of the automotive industry. "The industrial base of parts and components cannot be called a powerful automobile country."



Current situation: Local automakers are working for Bosch?

Someone once ridiculed that China's auto factories have all worked for engine factories (engines are the most important components), and that engine factories have all worked for Bosch (Bosch has controlled 40% of the engine core EFI market through United Electronics). Bosch is the world’s largest auto parts company. In 2010, Bosch’s total sales in China exceeded 37 billion RMB, an increase of 36% year-on-year, surpassing any auto parts company in China. China became the third largest Bosch company in the world after Germany and the United States. market. The corresponding ironic comparison is that in the ten years since China's accession to the WTO, China has not yet developed an automatic transmission (except for the purchase of the assembly).

According to industry practice, parts and components of joint ventures are brought into China by foreign parts. On October 14th, Shenlong and the 12 suppliers that occupy global leading position in the industry and accounted for approximately 1/4 of the total Dragon Dragon purchases for the first time signed the Strategic Supplier Cooperation Framework Agreement and granted it to 12 strategic suppliers. Cards, including Wuhan Steel, Bosch (China), Foglia (China), etc. In 2010, sales of Shenlong Motors amounted to 37 billion yuan, while the purchase value of parts and components was nearly 20 billion yuan, accounting for more than half of the total sales.

"The same problem with the whole vehicle is that parts and components lack a core technology and are poorly invested." Li Weiqing, Auto Parts Research Institute of GF Securities, told this reporter that "China's slightly more well-known auto parts companies are only Hua Yu Automobile and Fuyao Glass and a few others.” The supply of spare parts for the joint-venture vehicle companies is basically no Chinese local company. Even the positions of Chinese domestic brands, domestic parts manufacturers have fallen.

"Our e6, wipers are from Bosch, and the brake system is from Bosch." At the e6 forerunner's briefing at the end of October, Lian Yubo, Senior Vice President of BYD and Dean of Automotive Research Institute, said proudly. In fact, not only e6, BYD's two main models G6 and S6 pushed this year, more and more Bosch parts are used. The local car brand Great Wall also frequently released news of cooperation agreements with leading international parts and components companies such as Bosch and Delphi. Di Hao EC7, one of the successful models of local auto brands, has suppliers such as Germany Bosch, Siemens, Delphi, Visteon, Sweden Autolif and other international brands. There is no Chinese domestic parts brand.

BYD and the Great Wall were once known as "vertical integration." Not only does the vehicle have to do it by itself, but the engine, the motor, the controller, and even the chip have to be done. The self-sufficiency ratio of parts and components is as high as 67%. BYD once claimed that: “In addition to tires and glass, almost all parts and components can be done on their own.” BYD and Great Wall's model not only enables the company to develop at high speed, but also obtains superb profits, once envied the industry.

However, this model was soon challenged, and it was difficult to study the internal structure of the engine and the electric motor with limited energy. Only the “integration advantage” but the “special advantage” was abandoned. Anderson, the former vice president of GM’s global procurement and supply chain, once commented that China has advantages in some products such as glass and spare tires, but the competitiveness of other products has fallen sharply and prices are high. Anderson said that China lacks a supply system for various parts and components, and many products do not have economies of scale, so they have to invest more.

Reflections: Local parts and components are cheap but their quality is unstable China's auto industry policy stipulates the joint venture ratio of the entire vehicle, but it does not impose any restrictions on foreign investment in the spare parts industry. This directly led to the hollowing out of the core technology of China's parts and components industry. In the production of key components such as automotive EFI systems, engine management systems, ABS, micro-motors, and airbags, the proportion of foreign-funded enterprises was 100%, 100%, 91%, 97%, and 69%, respectively.

It is not without reason that BYD and Great Wall have started to develop parts and components for their own production and to purchase large-scale foreign brands. Hou Yan, general manager of BYD Auto (microblogging) sales company, told this reporter that the prices of domestic parts and components are indeed cheap, but the quality is not enough. In the past, in order to satisfy consumers' pursuit of low prices, they could only purchase some low-priced zeros. part. From the consumer experience point of view, “In the past, our car was the most complained by the wipers. After the Bosch brand was replaced, the problem was resolved immediately. After the brakes were abnormal, after Bosch was replaced, it was solved. ."

“The changes in domestic vehicle companies will also encourage domestic domestic parts and components companies to develop more quality companies and give them time.” Hou Yan said.

Wei Jianjun, chairman of the Great Wall, believes that if you want to master the technology of core components, you must cooperate with international giants. Originally it was limited to the supply of core components, and now it has developed into technical cooperation, but the property right is owned by others. The purpose is to develop its own R&D team and improve the quality and technology of parts and components. If only in the domestic market, the product can only be of low quality and low price. The information technology of the global technology market has already provided us with this condition. Many multinational vehicle company brands also use internationally renowned parts and components companies. This increases the cost, but it is necessary, and the increase is not great.

The well-known auto analyst Jia Xinguang (microblogging) is not optimistic about the development of parts and components. He believes that neither the OEM nor the competent department has always attached importance to parts and components and rarely invests in parts and components. "When you join the WTO, let's let go of the ratio of parts and stocks," he said. "There is no way to catch up."

Car analyst Zhang Zhiyong (microblogging) told reporters that from the reality of the development of China's auto industry, the 50:50 joint venture policy cannot be liberalized. Once it is released, foreign investors will leave their joint venture partners alone, and their product launches, new technology introductions, and marketing promotions will inevitably be stronger than those of joint ventures. In this way, local Chinese companies may really be annihilated.

In May this year, the National Development and Reform Commission issued the draft “Foreign Investment Industry Guidance Catalogue” and revised the previous liberalization policy for auto parts and encouraged foreign investors to establish a new energy automobile joint venture in China, but the foreign share ratio does not exceed 50%. . In order to prevent the re-emergence of the parts and components industry in the new energy vehicle industry, such technical depression. Vehicles and parts are related to each other. Without a strong technology transfer from the entire vehicle company, it is difficult to produce a strong component industry. The precondition for the resolution of all these problems is that the 50:50 joint venture shares cannot be removed from this barrier to prevent foreign investment.

Weapons Development Approach I: Self-cultivation of veteran automotive media, China Economic Network car channel director Cheng Yuan (microblogging) told this reporter that global procurement is said to be parts, parts suppliers are suppressed by vehicle manufacturers Powerful, meager profits.

Nowadays, the internationally recognized automobile powers include Germany, Japan, the United States, and South Korea. In addition to having a strong vehicle factory, they also have strong parts companies. Behind the German Volkswagen are Bosch and Siemens. Japan's Toyota and Honda are equipped with Denso and Aisin behind. American General Motors has Delphi and Visteon, while Korea is supported by MOBIS. In addition to the strong support from OEMs, these parts and components companies spare no effort in investing in R&D to maintain their technological leadership. In 2009, when the financial crisis was most serious, the proportion of R&D investment of auto parts companies among companies ranked among the top 1000 R&D investment companies in the world averaged 5.1%, which was higher than that of vehicle companies.

Some domestic auto makers in China are also gradually developing their own supplier systems. Hua Yu Automotive (600741.sh) is considered to be a listed company with strong domestic components and its holding company is SAIC Motor Corporation. Dongfeng Motor Group also has spare no effort to support its parts and components company. At present, 49 Dongfeng-series companies have provided engine assembly system components, chassis and gearboxes, construction projects and other products and services.

Development Path 2: Expansion of Mergers and Acquisitions A financial and debt crisis that has swept the world presents a rare opportunity for Chinese auto companies that lack well-known brands and core technologies.

The research report of Roland Berger Strategy & Consulting Co., Ltd. titled “The Taste of Chinese Enterprises in Emerging Economies Are Buying European Auto Parts Enterprises” stated that Chinese companies are very interested in acquiring overseas accessories companies and only acquired in the German speaking area in the past year. The case has more than doubled, and it is actively participating in the acquisition negotiations for 20 to 30 German accessories companies. According to public information, Chinese companies have acquired 34 companies in Western Europe this year, and the total transaction volume has reached US$7.74 billion, which is five times that of the same period of last year.

Geely, keen to acquire, believes that if foreign companies are invited to research and development, they must first spend a large amount of money to make a match. Even if they do come with technology, they are not their own. They will also require others to upgrade in the future. Based on this, Geely established Zhejiang Zhidiandian Co., Ltd. in May 2008, which specializes in the research, development and production of automotive electronics core technologies and related parts and components. By the end of 2010, Geely has cumulatively produced 100,000 sets of self-developed body control systems. This move not only brought economic benefits to Geely, which reduced the cost by 15%; it also improved the technical progress, changed the history of Geely's electronic control system relying on external supply, and marked the transformation of Geely from imitation to independent innovation. .

However, Rao Da, Secretary-General of the National Association of Passenger Vehicles, reminded us to be alert to whether the purchased technology is accompanied by a patent. If there is no patent right, even if one hundred percent of the company’s shares are purchased, it still needs to spend money on technology.

Insiders suggested that the state should give policy encouragement and strong support to the auto parts industry, especially key parts and components and the automotive electronics industry. We will focus on encouraging domestic-funded enterprises to acquire and acquire overseas key advanced component technology companies and overseas R&D institutions, and provide support and assistance in terms of policies and funding.