China's auto parts industry has developed well
Under normal circumstances, auto parts refer to all parts and components except for the car frame. Among them, parts refer to individual components that cannot be disassembled; components refer to a combination of parts that realize a certain action (or: function). With the steady development of China's economy and the gradual improvement of residents' consumption levels, the demand for auto parts for new cars has grown.
At the same time, with the continuous increase in the number of motor vehicles in China, the demand for parts and components in the aftermarket such as car repair and car modification has gradually expanded, and the requirements for parts have become higher and higher. China's auto parts industry has made good development achievements in recent years.
1. Analysis of the development status of China's auto parts industry
——Industry introduction: wide coverage and many types of products
Under normal circumstances, auto parts refer to all parts and components except for the car frame. Among them, parts refer to individual components that cannot be disassembled; components refer to a combination of parts that realize a certain action (or: function). The component can be a single part or a combination of multiple parts. In this combination, one part is the main one, which realizes the predetermined action (or: function), and the other parts only play auxiliary functions such as connection, fastening, and guidance.
Automobiles are generally composed of four basic parts: engine, chassis, body, and electrical equipment. Therefore, various subdivision products of auto parts are derived from these four basic parts. Classified according to the nature of parts, it can be divided into engine system, power system, transmission system, suspension system, braking system, electrical system and others (general supplies, loading tools, etc.).
2) Panorama of the auto parts industry chain
The upstream and downstream industries of the auto parts manufacturing industry mainly refer to its related supply and demand industries. The upstream of the auto parts manufacturing industry chain mainly includes markets that provide raw materials, including steel, non-ferrous metals, electronic components, plastics, rubber, wood, glass, ceramics, leather, etc.
Among them, steel, non-ferrous metals, electronic components, plastics, rubber, and glass are in large demand for raw materials. The downstream includes automobile manufacturers, automobile 4S shops, automobile repair shops, automobile parts and accessories dealers, and automobile modification plants.
The upstream impact on the auto parts industry is mainly in terms of cost. The price changes of raw materials (including steel, aluminum, plastic, rubber, etc.) are directly related to the manufacturing cost of auto parts. The downstream impact on auto parts is mainly in market demand and market competition.
With the development of science and technology, the upgrading of auto products is accelerating, which requires the auto parts industry to speed up technological innovation and provide products that are in demand; otherwise, it will face the dilemma of disconnection of supply and demand, resulting in structural imbalance and product backlog.
3) Policy promotion: frequent implementation of policy plans to boost the healthy growth of the auto parts industry
Since each car requires about 10,000 auto parts, and these parts involve different industries and fields, there is a big gap in technical standards and production methods. At present, the national policies related to the auto parts manufacturing industry are mainly distributed in the relevant national policies of the auto industry.
On the whole, the state is promoting the adjustment and upgrading of my country's automobile industry, encouraging the development and manufacturing of high-quality, high-tech self-owned brand cars, and maintaining greater support for new energy vehicles. The issuance of a series of automobile industry policies has undoubtedly put forward higher requirements for the parts industry. At the same time, in order to promote the active and healthy development of my country's auto parts industry, relevant departments of our country have promulgated industry-related policy development plans in recent years.
4) The status quo of China's auto parts market: main business income continues to expand
China's new car production provides development space for the development of my country's new car parts and components market. At the same time, with the ever-increasing car ownership, the demand for parts for car repair and modification is also increasing, which promotes the continuous growth of my country's auto parts industry.
In 2019, under the influence of factors such as the overall automotive market decline, the decline in subsidies for new energy vehicles, and the gradual increase in emission standards, component companies are facing unprecedented pressure. However, my country's auto parts manufacturing industry still shows a steady growth trend. According to the statistics of 13,750 auto parts companies above designated size by the China Association of Automobile Manufacturers, the accumulated main business income for the whole year was 3.6 trillion yuan, a year-on-year increase of 0.35%. According to preliminary estimates, the main business revenue of China's auto parts manufacturing industry will be around 3.74 trillion yuan in 2020.
Note: 1) The year-on-year growth rate data is due to the changes in the number of enterprises above designated size, and the statistical caliber is different every year.
2) The 2020 data are preliminary estimates and are for reference only.
5) China's auto parts import and export situation: the amount of import and export shows a downward trend
Since 2014, with the steady development of China's auto parts industry, the import and export of my country's auto parts has developed well. From 2017 to 2019, the import and export value of China's auto parts showed a fluctuating downward trend. In 2019, the import and export of auto parts was 35.31 billion U.S. dollars and 66.559 billion U.S. dollars, a year-on-year decrease of 12.8% and 4.4% respectively.
To a certain extent, this reflects that in the current market, parts and components companies are generally facing greater pressure. In 2020, China's auto parts imports reached 32.4 billion U.S. dollars, a year-on-year increase of 0.1%; auto parts exports amounted to 56.52 billion U.S. dollars, a year-on-year decrease of 6.2%.
From the perspective of the import and export structure of the four major categories of auto parts products, auto parts, accessories and bodywork accounted for the first place in the import and export market, accounting for 81.42% and 61.78% respectively; the export value of automobile and motorcycle tires accounted for The ratio reached 20.23%, and the import value accounted for only 1.83%; engines accounted for less than 10% in the import and export market of auto parts products.
Note: The inner circle is the structure of imported products, and the outer circle is the structure of export products.
6) R&D status of China's auto parts market: multi-institutional cooperation has become a trend
At present, there are still technical bottlenecks in the development of my country's auto parts industry, especially in the areas of intelligent networked auto parts, new energy auto parts, and energy-saving automobile core parts and components.
In order to solve the technical bottleneck, while increasing investment in product research and development, component companies are also actively seeking cooperation with relevant units. As shown in the figure below, some vehicle companies cooperate with component companies to develop auto parts. For example, SAIC Volkswagen and Japan’s Renesas jointly established an automotive electronics joint laboratory; some vehicle companies cooperate with IT companies to develop auto parts, such as Jianghuai Automobile and Huawei cooperate to carry out research in the fields of smart car solutions, enterprise informatization, smart parks, and smart factories;
Some parts companies cooperate with IT companies, such as Visteon and Tencent to develop autonomous driving technology and digital AI cockpit solutions; at the same time, research institutions also actively participate in cooperation to jointly research and promote the development of my country's auto parts industry. It can be seen that the future "multi-party cooperation, joint research and development" model will become an important trend to promote the development of my country's auto parts industry.
2. China's auto parts industry competition pattern and current status of investment and mergers
——Analysis of the pattern of regional competition: the cluster effect of the parts and components industry is prominent
my country's auto parts industry started to develop along with automakers, basically centering on auto production bases, showing a clustered development. After years of development, China has formed six major auto parts industry clusters in the Northeast, Beijing-Tianjin-Hebei, Central, Southwest, Pearl River Delta and Yangtze River Delta.
Among the six industrial clusters, the output value of the auto parts industry accounts for about 80% of the entire industry. Focusing on vehicle companies, auto parts companies have taken "scale expansion, structure adjustment, and added value enhancement" as the starting point to improve the efficiency of vertical extension and horizontal cooperation of the industrial chain. The synergy effect of the industrial chain has initially appeared, and the structural competitive advantage has been greatly improved. The cluster size and cluster effect are more prominent.
2) Analysis of enterprise competition pattern: the improvement of the competitiveness of Chinese enterprises
In the 2020 list of the top 100 international companies, the top five companies are Bosch of Germany, Continental of Germany, Denso, Magna of Canada and ZF of Germany. There are 11 Chinese auto parts companies selected, namely Weichai Group, Huayu Automobile, Hainachuan, Joyson Electronics, CATL, AVIC Automobile, GAC Parts, Yuchai Group, Zhongce Rubber, CITIC Dicastal, Fast Group.
Among them, the total revenue of Weichai Group's parts business ranked 8th in the top 100 international companies with 216.467 billion, and ranked first in the top 100 Chinese auto parts companies.
Overall, the scale of Chinese companies is increasing. The number of Chinese companies in the 2020 Global Top 100 list has increased from 8 in 2019 to 11, and the rankings have improved.
3) Current status of China's auto parts investment and mergers: auto parts companies' investment and mergers are accelerating
——The investment and financing market is booming
In recent years, China's auto parts market has entered a stage of large-scale development. From 2014 to 2020, the investment and financing market of China's auto parts industry showed a volatile growth trend. The market reached its peak in 2015. The number of investment and the amount of investment were 88 and 8.05 billion yuan, respectively. In 2020, the investment scale of China's auto parts industry is 5.364 billion yuan, and there is still a lot of room for investment in auto parts.
In the future, investment in parts and components enterprises will be more active. They will promote technological innovation through R&D investment, realize the upgrading of parts industry and then promote the upgrading of China's auto parts industry, and realize the development of auto parts from low-end manufacturing to high-tech fields.
——Investment and acquisitions in the fields of new energy vehicles and intelligent connected vehicles have accelerated.
According to incomplete statistics, in 2019, my country’s auto parts companies completed 21 investment mergers and acquisitions, including 7 investment mergers and acquisitions of traditional car-related products, and investment mergers and acquisitions of new energy vehicles and intelligent networked auto parts products. 14 cases.
From the perspective of investment and merger cases in the field of traditional auto parts, it mainly involves core component system-related products, tires, and body accessories. From the perspective of investment and mergers in the field of new energy and intelligent networked auto parts, it mainly involves power batteries, unmanned driving, and intelligent platforms.
3. Analysis of the development prospects and trends of China's auto parts industry
——Analysis of development trends: the automotive after-sales market has become a major growth point
Affected by the policy tendency of "restructuring vehicles and lighter parts", my country's auto parts companies have long faced the danger of technology hollowing out. A large number of small and medium-sized auto parts suppliers have a single product line, low technical content, and weak ability to resist external risks. In recent years, the rising cost of raw materials and labor has caused the profit margin of auto parts companies to fluctuate and decline.
The "Mid- and Long-Term Development Plan for the Automobile Industry" points out that the cultivation of internationally competitive parts suppliers will form a complete industrial system from parts to complete vehicles. By 2020, a number of auto parts enterprise groups with a scale of more than 100 billion will be formed; by 2025, several auto parts enterprise groups that have entered the world's top ten will be formed.
In the future, with policy support, my country's auto parts companies will gradually improve their technological level and innovation capabilities, and master key parts and core technologies; driven by the development of independent brand vehicle companies, domestic parts companies will gradually expand their market share, and foreign investment may The proportion of joint venture brands will decline;
At the same time, my country aims to form a number of auto parts groups that will enter the world’s top ten in 2025. Mergers in the industry will increase and resources will be concentrated on leading companies; as auto production and sales hit the ceiling, auto parts will develop in the field of new car support. Limited, huge after-sales market will become one of the growth points of the auto parts industry.
2) Development prospects: the industry’s upward trend remains unchanged
Benefiting from the development of the domestic and foreign vehicle industry and the expansion of the consumer market, the domestic auto parts industry is showing a good development trend. Although the automobile consumer market has turned cold under the influence of the epidemic, the long-term momentum remains unchanged, and the auto parts industry still faces greater development opportunities. The strong support from the policy level has laid a solid foundation for the development of the parts industry.
With technological innovation, my country's domestic parts supporting system gradually integrates with the world, and China's auto parts industry will continue to maintain a good development trend. It is predicted that by 2026, the main business income of my country's auto parts industry will exceed 5.5 trillion yuan.
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