According to incomplete statistics, foreign capital has occupied more than 75% of the auto parts market in Chongqing. More industry insiders estimate that foreign investment has accounted for more than 85% of Chongqing’s car parts market share.
Foreign investment accelerates the enclosure
"Since the successful introduction of South Korea Hyosung Co., Ltd. to manufacture auto parts in our park, Germany United Electronics will again be located in our park." The person in charge of the Chongqing Airport Industrial Park told reporters on July 6th.
The reporter learned that following the entry into Chongqing of the Cummins Engine Company of the United States in the 1990s, the US’s second largest spare parts manufacturer, Visteon, successfully settled in the northern New Area in 2003. Then, Sino-US joint venture Bailitong (Chongqing) Engine Co., Ltd. was registered in Chongqing to build a new plant with an annual output of 1 million sets of INTEK gasoline engines in the northern New District.
At present, the city has established auto parts companies in Chongqing in the United States, Japan, Germany, South Korea and other countries. Bosch, Germany’s largest auto parts company, also stepped up its investment in Chongqing. According to related departments, the company is currently negotiating with some of the city's major industrial parks to set up factories.
According to incomplete statistics, foreign capital has occupied more than 75% of the Chongqing spare parts market. Industry insiders estimate that foreign investment has accounted for more than 85% of Chongqing's car parts market, and foreign-controlled automobile parts and accessories companies in the areas of automotive electronics and engine parts and components are as high as 95% or even higher.
Hundreds of billions of business opportunities
According to the relevant person from the Economic Commission of the Shanghai Municipal Economic Commission, Chongqing is building an automobile capital. Chongqing plans to produce and sell 1.5 million vehicles by 2010. At the same time, it will support a large number of auto parts companies. With only these two items, it has reached 100 billion yuan in business opportunities.
In addition, the developed countries’ auto industry has shifted to China to reduce labor costs. The latest survey asked more than 200 German auto parts companies, and 23% of the companies said they are planning to invest in China.
"Up to 2007, Delphi's procurement in China is expected to reach 1 billion US dollars," said Chen Jinya, president of Delphi China. Behind this, it is Delphi's rapid expansion in China. Ford Motor Co. of the United States also stated that it will increase the purchase of automotive parts and components in Chongqing and the country, and is expected to be more than one billion US dollars.
Three major difficulties to be solved
Foreign investment is rampant and local auto parts companies are in crisis. It is understood that Chongqing auto parts production companies are basically scattered, chaotic, and small. The city currently has nearly 1,000 large and small auto parts and components companies, but fewer than 50 companies have annual revenues of more than 5 million yuan. There is no one company that earns 100 million yuan. This kind of strength is far away from the large-scale automobile spare parts enterprises in the international market. Take Bosch as an example, Bosch’s turnover in 2003 reached 36 billion euros, equivalent to about 400 billion yuan. The turnover of a Bosch company is equivalent to the one-year sales revenue of the entire Chinese automobile parts and components company. Chongqing's local parts and components company's sales revenue is less than 10 billion yuan a year, which is equivalent to only Bosch's sales revenue for five days.
The survey shows that Chongqing's auto parts and accessories companies currently have the following types: The first category, the large auto group's parts and accessories factory. These parts and accessories supporting factories have been relying on large-scale state-owned auto factories for many years to survive, and their spare parts are directly supplied to the automaker. They have been accustomed to the mode of production planned by automakers for a long time, and the price mechanism is generally derailed from the outside world.
The second category is the automobile parts factory located in each district and county of our city. These spare parts and small-scale plant equipment technologies are backward, quality is not strictly guaranteed, products are often considered counterfeit, it is difficult to enter mainstream car sales channels. One of the big problems they face is that they lack their own brands. They usually rely on processing to maintain production. They do not have their own signage and intangible assets, and the added value of profits is even more elusive. In the face of foreign competition and pressure, they have suffered from the supplier’s price competition and their profits have been low.
At the same time, some of the original state-of-the-art auto parts or large-scale collective enterprises are currently in a dismal state and have become targets of foreign acquisitions and mergers. For example, the original Puys Gasoline Engine Company and the United States Cummins Engine Company were formed on the basis of the acquisition of the spare parts enterprises in our city.
The third category is the growing private enterprises, such as the Zongshen Group, Loncin, and Lifan.
Facing life and death choices
"Compared with foreign investment, Chongqing's auto parts and accessories companies have no comparable advantages." Luo Jun, deputy professor of Chongqing Automobile Engineering Institute, said, "Chongqing auto parts industry, scattered, chaotic, small situation has not changed, the company is currently facing The potential crisis is getting bigger and bigger and it is experiencing a crisis of survival."
"Because the "Automotive Industry Policy" has not made such restrictions as the production of joint venture vehicles, foreign investment in China's auto parts industry can be driven straight into the market, and it can be wholly owned or fully owned by the spare parts enterprises." Luo Jun said: "At present, spare parts The business is more market-oriented than the competition in the entire vehicle market, there is no national protection policy, and there is no regional protectionism.These problems are more severely placed in front of nearly 1,000 automobile parts and accessories enterprises in the city.Survival or death?This is they must not It does not face cruel choices."
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