According to a report made yesterday by consultancy AlixPartners, last year, the profitability of China's spare parts companies doubled, and it was the most profitable in the same industry in the world. This report is based on a survey of 50 major parts and components companies in China. The survey time is January to March this year.
The report shows that although the global auto market was shrinking in 2009, the strong growth in the Chinese market has caused auto parts companies' products to remain in short supply. The prices of products including steel, copper and rubber (information, quotation) are all at historical highs, but they are just offset by the low price of human resources in China, making the profit rate of parts and components companies generally maintained at 8% to 10%. This level is twice the global average.
This profit level is also 2% higher than that of the entire vehicle company. In 2009, the average profit level of the automobile industry was between 6% and 8%. Surveyors generally believe that in 2010 and 2011, the profitability of China's parts companies will further increase.
In 2009, China's auto parts industry revenue reached 1.14 trillion yuan, which was 23% higher than in 2008. This growth figure clearly did not keep up with the 46% year-on-year increase in domestic vehicle sales.
However, from the point of view of exports, the parts and components companies still regard the domestic market as the main market, while exports have dropped by 7% to 197.2 billion yuan.
From the point of view of the efficiency of business operations, AlixPartners selected working capital turnaround time as the measurement standard, that is, the period of accounts payable to accounts receivable, China's parts and components companies have improved, from the original 78 days to 70 days. However, the impact of the financial crisis has gradually decreased and it is also seen as an important reason for the accelerated turnover of funds. The operating efficiency of China's parts companies is about half that of similar companies in Europe, America and Japan.
Domestic parts and components companies also started the wave of mergers and acquisitions in 2009, mainly due to market behaviors. For example, Weichai Power (000338) bought French engine manufacturer Botevin (Moteurs Baudouin SA) and Wanxiang Group acquired US Global. Global Steering Systems; There are also government-led acquisitions, such as Beijing West Heavy Industries' acquisition of Delphi's brake and suspension business, Weichai Power, Shandong Construction Machinery, and Shansteel were merged into Shandong Heavy Industry.
At present, the concentration degree of the Chinese auto industry is still very low. The sales of the five largest automobile manufacturers account for 50% of all sales, compared with 65% in the United States and 87% in Japan. The situation of low concentration of vehicle manufacturers has caused the upstream supporting enterprises to be very fragmented. 100% of respondents believe that acquisitions and mergers and acquisitions will increase significantly this year and next year, and 40% of executives said they will have mergers and acquisitions plans in the future.
“However, there is no willingness to acquire mergers and acquisitions. The good auto market situation has caused many parts and components companies to feel that their days are good. If there is no government match, most domestic companies will not consider selling them. We recommend domestic parts and components companies. The goal of M&A should be locked in foreign countries,†said Luo Man, managing director of AlixPartners China.
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