Relative to the entire vehicle, the domestic parts and components industry is still in the initial stage of development and integration. In the future, the supporting growth rate of parts and components will be slowed down by the impact of the entire vehicle, but the lower base and concentration will determine that the supporting market still has more room for growth. At the same time, the rapid increase in the number of holdings also promoted the growth of the after-sales and maintenance market, and compensated for the slowdown in supporting growth. In addition, exports will become an important way for parts to become bigger and stronger. Domestic passenger car parts will have larger import substitution and export space, while local commercial vehicle parts will gain export expansion and diversification with strong competitiveness. opportunity.
Benefited from the increase in domestic automobile sales, the parts and components industry continued to grow rapidly in the past decade
In the past ten years, the compound industry's compound growth rate reached 31.5%. Over the past decade, with the rapid development of the Chinese auto industry, the domestic auto parts industry has also achieved rapid growth. In 2010, the sales scale of auto parts in China reached 1,680.633 billion yuan, which was 15 times more than that of 108.76 billion yuan in 2000, and the compound growth rate was 31.5%, which was higher than the sales of auto vehicles and the growth of income. The number of enterprises has grown from 2,500 a decade ago to nearly 12,000 currently, and has greatly improved both in absolute terms and the scale of individual companies. Since the 1990s, with the gradual entry of foreign capital into the domestic automobile and parts industry, it has brought with it many resources and experiences in finance, technology, management, and talents, laying a solid foundation for the development of the industry in the past decade. At present, some leading domestic parts and components companies have the ability to independently develop and supply systems, have opened overseas markets, entered the international procurement system, and their export volume has increased year by year.
Supporting growth slows, but still has room for growth
Local components rely on the rapid growth of their own branded market to achieve simultaneous development. In recent years, under the influence of multiple factors such as the growth of endogenous demand, policy support, and support from the capital market in the domestic auto industry, car sales have increased in volume and the number of possessions has risen rapidly. Among them, the self-owned brand automobile has rapidly risen in the second and third tier cities with a better price/performance ratio and a sinking marketing network, and the sales volume has been continuously improved. With the rapid expansion of supporting quantities, domestic auto parts companies also have a rare opportunity for development. Many small and medium-sized autonomous parts and components manufacturers are aiming at the emerging market, an independent brand, and are actively involved in its early development process, accumulating more synchronous development experience. Some market segment leaders have solved the capital and production problems with the help of the capital market and achieved a leapfrog development.
The lower base and concentration determine that the supporting market still has a large room for growth. However, on the other hand, the explosive growth in the number of vehicles in a short period of time has also brought unprecedented challenges to urban transportation, environmental pollution, and infrastructure construction. After entering 2011, due to the slowdown in macroeconomic growth and weakened policy support, the automobile industry has entered the cold winter from an overheated moment, and the sales volume of whole vehicles has dropped significantly. The impact on the independent brands has been particularly noticeable. We expect the sales growth of the auto industry will recover to a reasonable level of around 10%-15% in the next few years. In spite of this, due to the fact that the domestic auto parts manufacturing market is still relatively small relative to the entire vehicle manufacturing process and the base is still low, the overall scale will offset the negative impact of the short-term sales decline, making the auto parts industry a relatively stable one. Within the growth channel. And as some market segments become larger and stronger, industry concentration is expected to increase further. Component companies with core competitiveness and independent research and development capabilities will actively seek to enter into joint ventures while increasing the coverage of self-owned OEMs. Supporting system. In the long run, domestic high-quality parts and components companies will still have ample room for growth.
With 5 times growth in inventory, huge demand for maintenance
The inventory remains at a relatively low level relative to vehicle sales and economic development. Although the sales growth rate has declined since the beginning of this year, the rapid growth in car sales over the past few years has led to a rapid increase in the number of possessions, making the after-sales maintenance market an increasingly important piece of cake. At present, the number of cars in China has exceeded 80 million, and the number of thousands of people is only about 60, not only far below the developed countries in Europe and America, but even lower than some developing countries. With the continuous improvement of the people’s living standards, purchasing power is increasing, and the infrastructure has been continuously improved, the space for vehicle ownership growth in the future is still very large. Even if compared with the same densely populated and resource-constrained Japan and South Korea, there is still at least five times more space for growth. The consequent demand for after-sales maintenance of parts and components will also rapidly increase, and it is expected to offset the negative impact brought about by the slowdown in the supporting market.
Export market becomes the third pole of component growth
Expanding the export market has become an important way for component companies to become bigger and stronger. With the continuous improvement of the domestic auto parts technology level and marketing capabilities, a number of local auto parts companies with modern equipment and management levels have rapidly emerged. At the same time, increasing globalization and increasing cost pressures have forced multinational vehicle manufacturers to continue to seek low-cost, high-quality component suppliers around the world to maintain their profitability. This is undoubtedly a rare opportunity for local parts manufacturers who are interested in going abroad. After joining the WTO, domestic parts and components exports from scratch, from small to large, experienced a period of rapid development. With domestic lower labor costs, large-scale investment, as well as digestion and absorption of international advanced technologies, domestically-manufactured parts gradually opened up in the global market. In 2010, the export value of China's spare parts reached 21.77 billion U.S. dollars. Some high-quality enterprises have entered the European and American automobile manufacturers' spare parts supporting systems and have achieved global supply. The export market has become an important breakthrough for local parts and components companies to become bigger and stronger, and to enhance their own brand image and technical strength.
Product structure and target market still have much room for improvement. From the perspective of the specific sub-industry, the current component exports are still concentrated in a number of low-value-added products, so that although the export volume and income have grown rapidly, the increase in benefits has not been significant. Looking back, some sub-industry leaders will rely on the support of the capital market platform to digest and absorb foreign advanced technologies and enhance their own research and development capabilities. The industrial structure will gradually shift to the high end. At the same time, the existing parts and components are mainly exported to the after-sales market. With the gradual withdrawal of some European and American companies from the mid-to-low-end parts and accessories market, local manufacturers are expected to seize this market with more large-scale supply capacity, and more high-quality companies. It will enter the global spare parts supply system and lay the foundation for the next step in the higher end.
Local Passenger Car Parts Company - Import substitution and export space is huge
Joint ventures and wholly foreign-owned enterprises dominate the domestic spare parts market
Passenger car parts are dominated by foreign capital, and investment in China continues to increase. After entering the WTO, the country’s protection of auto parts began to gradually weaken, and China’s spare parts industry began to face fierce competition in the international market. The most prominent performance is that the investment of multinational component companies has increased in China. Most multinational component giants set up factories in China. This is undoubtedly a huge challenge for China's domestic component companies. At present, the proportion of joint ventures and wholly foreign-owned enterprises in the domestic spare parts industry accounts for 45% of the total, and the proportion of profits is more than 50%. In some high value-added products, this proportion is even as high as more than 90%. In the field of passenger cars, this phenomenon is even more pronounced. As domestic joint venture brand car companies dominate the passenger vehicle market, and most of them own a stable global supply system, parts suppliers have chosen from among their original overseas partners. Therefore, the passenger car parts market is basically dominated by joint ventures and wholly foreign-owned enterprises.
The supply chain of core components and mid- to high-end passenger vehicles is still dominated by joint ventures and foreign capital. Currently, joint ventures and foreign-funded parts manufacturers have monopolized the supply system of most of the core components and mid- to high-end passenger vehicles by virtue of their huge R&D and technological advantages and their long-term stable relationship with the host plant. Most local companies are killing each other in the low-end areas and the competitive environment is rather poor. For local companies to enter the joint venture brand supporting system, a long-term and strict certification process is required, and it will be possible to complete the support if the original supplier has quality problems or insufficient supply capacity. This will undoubtedly increase the barriers to entry. Only high quality products with excellent product quality and outstanding price/performance ratios, as well as continuous and stable supply capabilities, are expected to exceed this threshold.
Local components start at a cost-effective price, car companies reduce costs and bring development opportunities
Local enterprises still have certain advantages in cost control. The development of independent brands and commercial vehicles lays the foundation for the expansion of independent companies. For a long time, local parts manufacturers have been struggling to survive in a fierce competitive environment, but they have also developed strong cost control capabilities. With cost-effectiveness advantages, some companies with strong management and management strengths have come to the fore, and their own scale has grown in the areas of independent brands and commercial vehicles with relatively little foreign investment, and a relatively stable supply capacity has been formed. At the same time, through the introduction of international advanced equipment, technology and talents, digestion, absorption and re-innovation, some companies have the ability to synchronize development and independent research and development with the host plant, which greatly enhances the company's technological level and lays an important foundation for further development.
Based on cost and quality advantages, steadily promote market share. With cost-effectiveness and stable supply capacity gradually recognized by independent brand OEMs, as well as the digestion and absorption of advanced technologies to continuously expand new product areas, the local components production capacity and sales scale have expanded rapidly, and the proportion in the supporting market has continued to increase in recent years. In particular, private enterprises, with flexible systems and strong incentive mechanisms, have quickly become the backbone of the local parts and components industry. While consolidating the market share of its own brands, local parts and components companies have sought to expand into joint venture brands and high-end products. Despite high barriers and obstacles, a few high-quality companies have successfully entered the joint venture supporting system and achieved rapid market share gains.
Acquire overseas companies or set up joint ventures to improve technology. Due to the technical level and management capabilities, there is still a big gap between local parts manufacturers and joint ventures and foreign companies. It is difficult to make a qualitative leap through their own exploration in a short time. Therefore, more and more companies choose to cooperate with foreign companies or direct acquisitions to enhance their technological capabilities and management capabilities. However, overseas mergers and acquisitions are bound to encounter a series of problems such as local policies, laws and regulations, and personnel management. Some companies have accumulated valuable experience in many successful overseas cooperation and have become the future of local parts and components companies going abroad. Leaders. Through a series of successful operations, companies are expected to achieve leapfrog development in scale and strength, and lay a solid foundation for subsequent entry into the international market.
The cost pressure of joint ventures will increase, and opportunities for high-quality auto parts cut into the supply system will come. Since the beginning of this year, as the overall growth of the auto market has slowed down and competition in the industry has intensified, the preferential rate of car prices has also continued to expand. At the same time, the rising costs of raw materials and labor have increased the pressure on the profitability of OEMs. In order to maintain profitability, some joint-brand OEMs seek to reduce the impact of rising costs by seeking suppliers with reliable quality and cost advantages. With the advantage of cost-effectiveness and stable supply capability, high-quality self-owned brand component suppliers are expected to enter the joint venture brand supporting system and achieve breakthroughs in higher-end markets.
The joint venture brand new domestic models and private brands bring new opportunities to local component manufacturers. In recent years, the joint venture brand has continuously increased the introduction of new domestic models. The mainstream European, American and Japanese-Korean joint venture companies have introduced several heavyweight new cars one after another, and the localization rate of old models has also been increasing. At the same time, some joint-venture car companies launched their own brands to compete with local brands in the low-end market, which also made the original joint venture supporting system face more challenges from local parts suppliers. The recognition of the joint-brand OEMs for high-quality local parts suppliers has also been on the rise. With the successive launch of joint-venture manufacturers' own-brand new vehicles, it is expected that the opportunities for large-scale independent components to cut into their supply systems will come soon.
Local Commercial Vehicle Parts Company - Global Competitiveness Boosts Export and Diversification Opportunities
The world's leading commercial vehicle scale breeds a mature parts system
The commercial vehicle industry chain continues to improve with the rapid economic development. After China’s Hyundai Motor Industry began in the founding of New China, the earliest models produced were commercial vehicles represented by liberation trucks. Therefore, China's commercial vehicle industry starts much earlier than passenger cars. After the reform and opening up, as economic construction continues to deepen, commercial vehicles have also developed rapidly as an important component of production data. In particular, the introduction of Steyr technology in the early 1980s made China's commercial vehicles, especially heavy trucks, reach a major level. With the rise of the real estate industry and the acceleration of infrastructure construction, China's commercial vehicle industry has reached a global leading level regardless of its overall scale and production capacity, and it has acquired international competitiveness due to its superior cost-performance advantage. A large number of local commercial vehicle parts and components companies have also continued to mature and grow, forming a complete commercial vehicle industry chain.
Commercial vehicle parts companies have a better living environment than passenger cars. Unlike passenger cars, because most commercial vehicle manufacturers are state-owned or privately-owned, component systems are basically dominated by local companies. Foreign-funded enterprises only monopolize high-tech fields that some domestic companies cannot grasp at the moment. Commercial vehicles as a means of production, whether manufacturers or users are more concerned about the reliability of cost-effective, fuel economy and harsh working conditions, and passenger car users are very emphasis on safety, comfort and brand and other factors. As a result, local commercial vehicle parts and components companies have comparative advantages in meeting customer demand, and the domestic commercial vehicle parts industry has gradually grown.
Exports have obvious competitive advantages, and emerging market development offers opportunities. With higher performance and far lower prices than similar products of foreign brands, domestic commercial vehicles are widely favored in the international market. In the same way, commercial vehicle parts go out of the country together with the entire vehicle and are highly praised by overseas markets for their superior cost performance. Especially in the emerging markets, due to the lack of development of its own parts and components industry, it is unable to meet the needs of the after-sales service market for parts and components. Therefore, China's commercial vehicle parts, which are cheap and high quality, have taken the lead in these markets.
With the gradual recognition of product performance and stability, some internationally renowned commercial vehicle OEMs or first-class component suppliers have signed strategic cooperation agreements with local parts and components companies in product technology, marketing channels, supply systems, brand licensing, etc. Cooperation in many aspects. It opened the door for local commercial vehicle component manufacturers to enter the international market. China's commercial vehicle parts and components companies are expected to become the forerunners of the auto parts industry going international.
Downstream diversification opens up space for commercial vehicle parts and components
Concentric diversification promotes the rapid growth of the company. With the ever-expanding scale of commercial vehicle parts and components companies, economies of scale have become increasingly important. Some parts and components companies have gradually gained access to similar areas such as construction machinery, passenger vehicles, agricultural machinery, marine equipment, railway projects, and general equipment by virtue of their accumulated experience in the field of commercial vehicles and flexible production capabilities. Concentric diversification has been widely recognized as a path for rapid growth of the company. Several major component giants in the world today follow this path. Starting from a certain professional field, they are rapidly expanding through concentric diversification, thus forming a synergy effect among various subdivided industries.
Some commercial vehicle parts and components companies have entered the passenger car market. In all areas of diversification, passenger cars have the largest market capacity and a faster growth rate. Some of the technologies have similarities with commercial vehicles. Therefore, passenger vehicles have become the first choice for the diversification of various commercial vehicle parts and components companies. However, passenger car parts are dominated by foreign capital all year round, and there are significant barriers to entry. Therefore, many parts manufacturers have chosen to rely on their existing good relationships with their own brand commercial vehicles to gradually enter their own or local passenger vehicles. Supporting system, and accumulate passenger car matching experience. As the technology continues to mature and form a long-term and stable supporting relationship, local parts and components companies are expected to gradually obtain more passenger car OEM approvals, thereby further increasing market share.
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