Analysis of the status quo and development trend of automobile wheel industry competition in 2018, large-scale integration among enterprises

Automobile wheel industry competition status

Aluminum wheel market competition analysis

Judging from the domestic automobile aluminum wheel market competition pattern, there are more than 300 aluminum wheel manufacturers in China. At the same time as the number of wheel companies expands, companies in the industry have more obvious cluster ladder distributions. At present, China has formed two major clusters that are mainly for complete vehicle factories and for sale in the aftermarket. As automotive manufacturers have high requirements for the size, technical development capabilities, product quality, and timeliness of the suppliers, the aluminum hub manufacturers supporting the entire vehicle are generally led by the industry in terms of production scale, strong technology development capabilities, and product quality. A large company with excellent consistency. At present, only a small number of aluminum wheel manufacturers in China have entered the complete vehicle market, such as CITIC Dika, Wanfeng Aowei, Lizhong Wheels, Jinfei Kaida, Liufeng Machinery, etc. These enterprises are large in scale and strong in strength. Occupy most of the domestic OEM market, and some companies export to the major international OEM market.

In addition, most manufacturers mainly supply domestic and foreign after-sales service markets. As China's domestic after-sales service market is still not mature enough, the competition of domestic aluminum wheel hub manufacturers is mainly focused on the domestic OEM market and foreign AM market share competition.

Chart 1: China's major automotive aluminum wheel manufacturers

Source: Aluminum Wheel Quality Association Forward Industry Research Institute

Steel Wheel Market Competition Analysis

In the steel wheel hub market, Zhengxing Wheel Group Co., Ltd., Dongfeng Automobile Wheel Co., Ltd. and Xingmin Zhitong (Group) Co., Ltd. have a market share of more than 60% and a high level of industry concentration.

Chart 2: China's Steel Wheel Hub Market Structure (Unit: %)

Source: Forward-looking Industry Research Institute

Five Wheel Force Analysis of Automobile Wheel Industry Competition

Through quantitative analysis of the competition in all aspects of the automotive industry, 1 represents the largest and 0 represents the smallest. The competition of the automobile wheel industry is shown in the following figure:

Exhibit 3: Analysis of the Five Forces of Automobile Wheel Industry

Source: Forward-looking Industry Research Institute

Automotive wheel industry competition trends

Exhibit 4: Analysis of Competition Trends in China's Automotive Wheel Industry

Source: Forward-looking Industry Research Institute

(1) Large-scale integration among wheel companies

The number of large and medium-sized wheel hubs in the wheel hub industry will be reduced. Large companies will have more branches and subsidiaries. Systematic R&D, large-scale modular supply companies, and specialized small and medium-sized companies will become mainstream companies in the automotive wheel industry.

At present, there are a large number of small companies engaged in hub manufacturing in China. Most of these companies provide OEM products for international and domestic brands. The profitability of OEM companies is relatively low, which is mainly due to the relatively cheap raw materials and labor in China. The increase in labor costs may result in their inability to continue their operations. There are also some small auto parts companies that are imitations of products on the market. They do not have R&D design capabilities, and they have low product quality and quality, and they cannot meet the increasing demands of users. Therefore, the large-scale integration between enterprises in the hub industry is an inevitable trend.

Industry consolidation provides an opportunity for superior wheel companies to share more market share by integrating other companies to expand their production scale. At the same time, fewer companies also reduce the disorderly homogenous competition, and competitive companies can concentrate on product R&D and customer service to provide more competitive products and better services.

(2) Hub OEM market supporting system or restructuring

Among the wheel hub enterprises, the advantageous enterprises will reorganize their OEM market supporting system and realize that the enterprises will supply the vehicle manufacturers directly.

In the OEM sales model, a pyramid-type multi-layer supplier system is currently formed. The general supplier system hierarchy has 1-3 levels. The next-level supplier provides products to the supplier, and the first-tier supplier directly manufactures the entire vehicle. Business supply products. The more supply levels, the greater the cost of investment, the lower the level of corporate profits, the more obvious the trend of recombination of OEM market supporting systems.

Exhibit 5: OEM Market Supplier System

Source: Forward-looking Industry Research Institute

(3) Domestic enterprises further participate in international competition

From a global point of view, the development of automobile hubs is continuously progressing. In the international market, the main competitors of Chinese hub manufacturers are Japan and South Korea. However, because of the cheap labor force in our country, the low cost advantage is These countries cannot match. In the huge international market, the automobile manufacturing industry in the United States, Japan, Western Europe, Germany and other countries is very developed, so the demand for automobile wheels is very large, and the production costs in these countries are relatively high, so these manufacturers in order to obtain Higher profits require the search for cheaper products. The huge market in China occupies an advantageous position, which allows domestic companies to produce products that have a continuously increasing demand market in the international market and further participate in international competition. Therefore, China’s automobile wheel industry must keep up with the pace of the international market. Opportunities, create unique brands and independent intellectual property rights in China, and strive to take a leading position in this industry.

The above data and analysis come from the “Analysis Report on Production and Sales Demand and Investment Forecast of China's Automobile Wheel Industry from 2018 to 2023” published by the Industry Research Institute of Forward Industry.