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Industry News | In 2023, the automotive parts industry will return to the earth in spring! Ⅱ

Industry News | In 2023, the automotive parts industry will return to the earth in spring! Ⅱ

Aug 10,2023
In 2023, the automotive parts industry will return to the earth in spring!

Auto parts are a kind of products that constitute the whole unit of the automobile and serve the automobile. There are many kinds of auto parts, with the improvement of people's living standard, people's consumption of automobile is also more and more, auto parts of this market has become more and more big. In recent years, the auto parts industry is also developing rapidly.

1. Merger and restructuring may become a major trend
At present, most domestic automotive parts companies have low sales, and compared to multinational giants with sales of tens of billions of dollars, the scale of Chinese automotive parts companies is significantly smaller. Moreover, China's manufacturing exports have always been known for being cheap. In order to effectively reduce production costs, multinational large enterprises have not only transferred production and manufacturing links to low-cost countries and regions on a large scale, but also gradually extended the scope of transfer to research and development, design, procurement, sales, and after-sales service links. The scale and level of transfer are becoming larger and higher.

The quickest way for domestic component companies to gain a foothold in future international market competition is to form large-scale component enterprise groups through mergers and acquisitions. The merger and reorganization of component enterprises is more urgent than that of complete vehicles. Without the emergence of large component enterprises, costs cannot be reduced and quality cannot be improved, making the development of the entire industry extremely difficult. Against the backdrop of small scale, weak strength, and insufficient research and development capabilities of domestic component enterprises, if the component industry wants to develop rapidly, it must accelerate mergers and acquisitions to form a scale effect.
2. The emergence of large automobile parts dealers
Comprehensive auto parts dealers will grow. The supply of automotive components is an important part of the post maintenance market, and its scale can solve problems such as uneven product quality and opaque costs that currently exist in the Chinese post maintenance market. At the same time, large-scale comprehensive distributors can improve circulation efficiency and reduce circulation costs to provide spare parts for quick repair stores.

Business coverage and cost control are key issues faced by comprehensive automotive parts dealers in their operations. Whether to assist chain stores in solving the problems of high procurement costs and low efficiency they face will become the key to the success of large dealers.
3.Rapid development of new energy components
It should be noted that many automotive component companies that achieved "bright" results from 2018 to 2019 believe in their financial reports that the development of new energy vehicle batteries and other components has driven the improvement of performance.
Due to the significant development of performance in the lithium battery business unit and the new energy vehicle business unit. In 2020, new energy has become a major explosive presence in the automotive industry! Regarding the problems that need to be solved in the development process of automotive component enterprises, Chen Guangzu, a member of the China Automotive Industry Advisory Committee, stated that, With the country's emphasis on energy conservation and emission reduction, the most urgent requirement for traditional fuel vehicle parts supply enterprises is to transform the engine and solve emission problems. For new energy vehicle parts supply enterprises, further improvement is needed in technologies such as battery endurance.
4. Globalization of automotive parts will become a trend
Globalization of automotive parts will become a trend, and in the future, China will still focus on exports and internationalization as the main themes. With the changes in the organizational structure of the automotive parts industry, more and more vehicle manufacturers will implement global procurement of parts. However, China's massive manufacturing industry and the characteristics of high-quality and low-cost are unlikely to change in the short term. Therefore, the wholesale of automotive parts will continue to focus on exports and internationalization for a period of time in the future. At present, international buyers are becoming increasingly rational and practical about Chinese procurement by selecting and cultivating potential core suppliers; By increasing its own logistics integration, strengthening communication with foreign factories in China, increasing the latter's enthusiasm for exports, diversifying procurement destinations, and comparing with other emerging markets to determine procurement locations, we can promote this.

The process of procurement in China. According to analysis, although international buyers are becoming increasingly cautious about Chinese procurement. But in the next decade, exports and internationalization will continue to be the main themes for domestic component manufacturers in China.
5. The automotive parts industry is facing signs of transformation
Although the potential of the Chinese automobile parts industry market is still enormous, it also shows signs of a major transformation. The growth of the Chinese automobile market will no longer be a simple and rough quantitative change, but is undergoing a qualitative improvement. A car parts industry that relies on quality rather than quantity, and service rather than marketing is in front of us.

The characteristic that deserves the attention of industry peers is that technology driven has gradually become the new normal. Today, as the entire China is shifting from population driven to innovation driven, the automotive parts industry has also felt the tremendous impact of technology. When searching for new development opportunities throughout the industry.
As of the end of 2019, the total number of new energy vehicles in China reached 3.81 million, accounting for 1.4609% of the total number of vehicles. Compared with the end of 2019, there was an increase of 1.2 million vehicles, an increase of 46.05% The sudden rise of new energy vehicles and other industries in the automotive industry has raised the demand for technology in the parts industry to a new level. The key to keeping up with this wave of dividends lies in technology.

Although most high-tech products for automotive components in China have achieved localized production, most of the core technologies are still in the hands of international giants. But international component giants are accelerating the export of technology to China, which is an irreversible trend.
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