The uneven development of the automotive parts market should align with benchmark enterprises
2024-01-31
With the rapid development of China's automotive industry in recent years, the automotive parts market has also achieved rapid development. According to statistics, China currently has 40000 automotive parts enterprises, with the output value of parts jumping from 3.39 billion yuan in 2002 to 1.13 trillion yuan in 2009. Domestic authoritative experts in the automotive industry have expressed that there is great potential for the development of China's automotive and parts industry. The three driving forces of the supporting market, domestic after-sales market, and export market are strong, and the rapid growth of market demand is driving the automotive parts industry to quickly become one of the fast growing and attractive industries.
Chinese automotive parts companies have two major advantages: low labor costs and a huge automotive demand market, with rapid growth and expansion speed. Among them, some excellent component supplier enterprises have emerged, most of which have good corporate quality, including excellent product quality, strong technological innovation capabilities, progressive management concepts, and international enterprise development perspectives. These elements constitute the core competitiveness of China's excellent component enterprises. While wholly foreign-owned and joint venture enterprises are optimistic about the Chinese market and are flocking in large numbers, these enterprises will never stay at the level of price winning. Instead, they will be market-oriented, with an internationalization strategy as the goal, increase their technological innovation capabilities, and compete with foreign brand enterprises through comprehensive competitiveness.
While the entire component market is rapidly developing, the phenomenon of uneven quality among Chinese local enterprises is also quite evident. According to statistics, there are currently over 5000 non-state-owned parts enterprises in China with sales revenue of over 5 million yuan. In addition to village run enterprises, small non-state-owned enterprises, and small family workshops, nearly 10000 enterprises are active in the automotive parts market, and product and enterprise quality can be described as chaotic. Some companies blindly follow the trend without industry experience and technology, producing many components with low technical content and poor product quality. For example, Shanghai Kangchengjia Automotive Parts Co., Ltd., which mainly produces rearview mirrors and sedan parts, and Shanghai Zhengxiang Mechanical Parts Co., Ltd., which mainly manufactures automotive parts machinery... Overall, we have to face the fact that China's automotive parts industry is still one of the areas where the "herd effect" is very obvious.
This is first reflected in technology. Objectively speaking, China's parts industry started relatively late compared to foreign countries, and foreign companies have also strictly controlled their technology in cooperation with our local enterprises. On the other hand, Chinese component companies do not attach enough importance to technology, or view technology too easily. The ideological misconception is one of the major obstacles hindering the growth and strength of China's automotive parts enterprises.
In addition to technology, the lack of a progressive management system is also one of the main factors restricting the internationalization development of local component enterprises, especially reflected in procurement management. Unreasonable procurement infrastructure and procurement business, lack of constraints in the design process, lack of collaboration between design, procurement, and manufacturing businesses, lack of win-win partnerships with suppliers, and failure to integrate supplier resources in the early stages of product design. All of these have led to an increase in total product costs, longer production times in bulk, longer market cycles, increased inventory or out of stock shortages, and a lack of predictability in the supply chain. Some small and medium-sized enterprises with low qualifications find it difficult to adapt to the continuous changes in procurement models, procurement focus, procurement talent needs, and procurement informatization in a short period of time.
The above two points have determined that the road to brand building for many Chinese automotive parts companies is difficult and bumpy. There are very few brands in China that have gained international reputation among local component companies, and their overall strength and competitiveness still need to be improved. In 2009, China became the world's top producer and seller of automotive parts, but there is still a certain gap in product structure refinement compared to the international market. To become a strong country in the automotive and parts industry, we must have the ability to self brand and produce products from internationally renowned brands, and explore and promote the development of more automotive parts brands through certain channels.
There are many automobile parts companies in China, but most of them are small and scattered. One of the urgent needs in the development process of the automotive parts industry is to select a portion of strong companies from numerous automotive parts enterprises across the country as benchmarks for everyone to learn from.
Chinese automotive parts companies have two major advantages: low labor costs and a huge automotive demand market, with rapid growth and expansion speed. Among them, some excellent component supplier enterprises have emerged, most of which have good corporate quality, including excellent product quality, strong technological innovation capabilities, progressive management concepts, and international enterprise development perspectives. These elements constitute the core competitiveness of China's excellent component enterprises. While wholly foreign-owned and joint venture enterprises are optimistic about the Chinese market and are flocking in large numbers, these enterprises will never stay at the level of price winning. Instead, they will be market-oriented, with an internationalization strategy as the goal, increase their technological innovation capabilities, and compete with foreign brand enterprises through comprehensive competitiveness.
While the entire component market is rapidly developing, the phenomenon of uneven quality among Chinese local enterprises is also quite evident. According to statistics, there are currently over 5000 non-state-owned parts enterprises in China with sales revenue of over 5 million yuan. In addition to village run enterprises, small non-state-owned enterprises, and small family workshops, nearly 10000 enterprises are active in the automotive parts market, and product and enterprise quality can be described as chaotic. Some companies blindly follow the trend without industry experience and technology, producing many components with low technical content and poor product quality. For example, Shanghai Kangchengjia Automotive Parts Co., Ltd., which mainly produces rearview mirrors and sedan parts, and Shanghai Zhengxiang Mechanical Parts Co., Ltd., which mainly manufactures automotive parts machinery... Overall, we have to face the fact that China's automotive parts industry is still one of the areas where the "herd effect" is very obvious.
This is first reflected in technology. Objectively speaking, China's parts industry started relatively late compared to foreign countries, and foreign companies have also strictly controlled their technology in cooperation with our local enterprises. On the other hand, Chinese component companies do not attach enough importance to technology, or view technology too easily. The ideological misconception is one of the major obstacles hindering the growth and strength of China's automotive parts enterprises.
In addition to technology, the lack of a progressive management system is also one of the main factors restricting the internationalization development of local component enterprises, especially reflected in procurement management. Unreasonable procurement infrastructure and procurement business, lack of constraints in the design process, lack of collaboration between design, procurement, and manufacturing businesses, lack of win-win partnerships with suppliers, and failure to integrate supplier resources in the early stages of product design. All of these have led to an increase in total product costs, longer production times in bulk, longer market cycles, increased inventory or out of stock shortages, and a lack of predictability in the supply chain. Some small and medium-sized enterprises with low qualifications find it difficult to adapt to the continuous changes in procurement models, procurement focus, procurement talent needs, and procurement informatization in a short period of time.
The above two points have determined that the road to brand building for many Chinese automotive parts companies is difficult and bumpy. There are very few brands in China that have gained international reputation among local component companies, and their overall strength and competitiveness still need to be improved. In 2009, China became the world's top producer and seller of automotive parts, but there is still a certain gap in product structure refinement compared to the international market. To become a strong country in the automotive and parts industry, we must have the ability to self brand and produce products from internationally renowned brands, and explore and promote the development of more automotive parts brands through certain channels.
There are many automobile parts companies in China, but most of them are small and scattered. One of the urgent needs in the development process of the automotive parts industry is to select a portion of strong companies from numerous automotive parts enterprises across the country as benchmarks for everyone to learn from.
