Relying on technology leadership and the blockade of core technologies, foreign-funded parts and components companies have achieved great success in China and have almost monopolized core components. According to statistics, foreign auto parts companies have accounted for nearly 80% of China's spare parts market. In contrast, independent core component companies that started relatively late have not been able to pose a threat to foreign-owned parts and components companies. This is largely due to the pressure from foreign capital. If the suppression of self-owned companies by foreign-funded core components has been shown in terms of technical blockade, then in addition to the technology “Dashanâ€, independent manufacturers of spare parts will now have a price “trapâ€. Using low-cost strategies to suppress their own products, a large-scale commercial warfare is being staged.
"Overseas protection" leads to low competitiveness of local companies
Why is there such a dangerous situation in China's domestic spare parts industry under the trend of globalization? Globalization has a positive impact, and it will inevitably have a negative impact. This is mainly reflected in the “foreign protection†phenomenon of China's spare parts industry. “Foreign protection†means that when a multinational automobile company enters China, it is bound to bring in a group of suppliers of original accessory products. This aspect is to comply with its original supporting system, better meet the needs of automobile production and sales, and also to increase the market share for its domestic parts suppliers.
The reason why multinational companies prefer to use original suppliers is that if Chinese local parts suppliers are used, they will have some inadequacies in terms of procedures, technical R&D collaboration, and quality system guarantees within a short period of time. It is these “foreign protections†that have caused the fragmented, overlapping, and backwardness of China’s auto parts industry structure. Because many of China's existing auto parts companies are strictly speaking, they are only simple, subsidiary manufacturers, rather than independent, global-oriented and socialized suppliers.
This gap in the concept actually reflects the major mistakes in the development of China's spare parts. What we are pursuing is only the quantity and growth index, and there is a lack of efforts to strengthen and enhance the quality of enterprises. This is an important reason for the low international competitiveness of companies.
Geely's Future Development Values ​​Autonomy of Components
Before the successful acquisition of Volvo, Geely has started to plan the blueprint for the future development of parts and components. It can be seen that Geely has taken precautions. On March 15th, 66 auto parts companies from all parts of Ningbo and Zhejiang Geely Holding Group Co., Ltd. started all-round docking. This cooperation was strongly encouraged by the local government of Ningbo. Prior to this, Geely had bought a spare parts company in Australia and made a good preparation for its acquisition of Volvo and future development.
In late March, Geely made a big deal. According to news from Jiujiang, the Geely Group's core enterprise, Zhejiang Geely Decoration Material Co., Ltd. has recently signed a contract with Jiujiang City and invested RMB 1 billion in Jiujiang City to build an auto parts manufacturing base in Jiujiang City West Port Area. The product development direction of Geely Jiujiang project is brake assembly, full light, car airbag, instrument, cylinder block, cylinder head, camshaft, steering wheel assembly, fuel tank assembly, fan assembly, automobile wheel hub, and interior decoration Parts, whole vehicle wiring harness, etc., to form 2.5 million sets (pieces) of production capacity. Various initiatives show that Geely's entry into the world center stage is a complete system of independent components.
During the “Eleventh Five-Year Plan†period, China has created a number of outstanding parts suppliers with international competitiveness, allowing some promising suppliers to first rush out, and drive the structural adjustment and quality improvement of the parts and components industry. However, it is not enough to make Chinese auto parts really bigger and bigger. In the future development, we must speed up the development of the independent brand R&D of the entire vehicle, which is estimated to take 10 years or more. Then, when parts and components are fully localized, they can in turn greatly promote the development of the automotive industry.
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