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2017-2021 Development Trend of China's Auto Parts Industry

2017-2021 Development Trend of China's Auto Parts Industry


1. Accelerated international industrial transformation and accelerated M&A activities

For a long time, most auto parts suppliers sold their products at low prices.Compared with the multi-billion-dollar multinational giant retailers, the scale of Chinese auto parts companies is simply too small.Chinese export manufacturers have always been known for their low prices.In order to effectively reduce production costs and open up new markets, large multinational companies not only transfer manufacturing processes to countries with lower labor costs, but also expand the scope of this transition to research and development, design, procurement, marketing and after-sales service.. The scale of transfer is getting bigger and bigger, and the level is getting higher and higher.


By 2010, many auto parts suppliers had established factories in China through joint ventures or other means.


In the future, if Chinese auto parts suppliers want to occupy a place in the international market competition, it is the best way to merge and reorganize to form a large parts enterprise group.The merger of auto parts suppliers is more urgent than the merger of the entire auto industry.If there is no large-scale auto parts suppliers, the cost cannot be reduced and the quality cannot be improved, and the development of the entire industry will be very difficult.Under the background of small scale, weak strength and insufficient R&D capability of auto parts suppliers.Therefore, if the auto parts industry wants to develop rapidly, it must speed up mergers and create economies of scale.

  

2. Auto parts suppliers actively implement systematic development, modular manufacturing, and integrated supply to accelerate the cluster development of the auto parts industry.

From the perspective of the development history of the auto supporting industries in the world's major auto manufacturing countries, the cluster development of the auto parts industry is as important as the auto industry.To become stronger, it must develop towards industrial clusters, which is a strategic choice for the auto parts industry.


The adoption of platform-based strategy, systematic development, modular manufacturing and supply integration by OEMs in product development has become the future development trend of the auto parts industry.At the same time, the auto parts industry also presents the characteristics of industrial clusters. 


3. The globalization of auto parts procurement will become a trend, but China will still focus on exports and internationalization for a period of time.

As the organizational structure of the auto parts industry changes, more and more OEMs will implement global procurement of auto parts.However, the characteristics of China's large-scale manufacturing, low price and high quality will not change in the short term, so China's auto parts industry will still focus on export and internationalization.


In a certain period of time, international purchasing agents will become more rational and pragmatic in purchasing in China by screening and cultivating potential core suppliers; strengthening logistics integration; strengthening exchanges with factories of foreign-funded enterprises in China and developing their export interests; Decentralize procurement, compare with other new markets, identify procurement partners, and promote the procurement process in China.


According to analysis, international buyers are becoming more and more cautious in purchasing in China.But in the next decade, export and internationalization will still be the main direction of Chinese auto parts manufacturers.The main reason is:


1) The auto parts industry is an international industry, and the international development of Chinese auto parts suppliers is bound to accelerate, and some companies benefiting from international procurement have sent positive signals;


2) For Chinese parts companies, especially supporting parts suppliers, the competition is more brutal, and internationalization is one way out;


3) With the rapid development of these years, the relevant supporting manufacturers have reached a scale of one billion, and have the economic strength of international expansion;


4) Foreign capital and joint ventures will also increase exports, making China a real manufacturing center and forming a benign industrial circle.



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