Foreign-funded parts and components enterprises collectively enter a new round of investment peak period

The auto market has entered a stable period, but foreign auto parts companies have made a lot of money in China. International auto parts giants, including Bosch, Valeo, TRW, and ZF, all achieved double-digit growth in the growth rate of their business in China last year.

　　 is mainly the growth of new business. Chen Yudong, President of Bosch China, analyzed that in its 2012 business, its own brand business accounted for 66% of Bosch's business in China. In fact, with the upgrading of the domestic auto industry, independent brands have entered a period of transformation and upgrading. Since domestic parts companies have not kept up with the pace of upgrading their own brands, in the new round of competition, joint venture parts companies are gradually engulfing the sphere of influence that originally belonged to independent parts. The growth rate of TRW in China is much higher than expected in 1994. A few days ago, John Plant, Chairman, President and CEO of TRW TRW, told reporters that due to the rapid development of China's business, TRW must make additional investments every year to make the company's development in the Chinese market enter a virtuous circle. Last year, the Chinese business accounted for 15% of the company's global business.

　　 Including Bosch and Valeo collectively entering the expansion period. According to the reporter's understanding, Bosch has achieved a compound annual growth rate of 25% in China in the past ten years. Among them, Bosch's consolidated sales in China in 2012 alone reached 41.7 billion yuan, accounting for 10% of its global sales. Now, China has become Bosch's second largest overseas market. Valeo's performance is not inferior. Last year, Valeo's sales in China exceeded RMB 10 billion, accounting for 10% of the group's sales. The company expects this number to double by 2015, when China will become its largest overseas market.

　　 Corresponding to the high growth, multinational component companies have entered a new round of investment peaks. TRW plans to invest more than US$200 million in the Chinese market this year, surpassing TRW's investment in any country in the world. Bosch also plans to continue to increase investment in the Chinese market. In 2013 alone, it plans to increase investment by about 3 billion yuan in automotive technology and aftermarket. And ZF plans to put two more production bases in China this year. Foreign-funded parts and components companies generally have double-digit growth, mainly relying on the upgrading of Chinese independent brand products, and more and more models are being developed simultaneously with the world. Gasgoo.com CEO Chen Wenkai said. For example, SAIC Roewe (Weibo) established its position as a mid-to-high-end car from the very beginning. It shares suppliers with Shanghai Volkswagen and Shanghai GM in the construction of its parts system; and FAW Hongqi H7, which aims to develop the high-end official car market, has The interiors are all designed and developed by Johnson Controls' two joint venture factories in Changchun, Jilin Province.

　　 With the help of China's consumption upgrade for foreign parts and components, while maintaining the original high-end product market, foreign parts and components companies are also actively developing low-cost products and expanding into the low-end market. An obvious example is that Valeo’s orders in the Chinese market accounted for 18% of its total orders last year, while sales accounted for only 10% of the group’s total sales. The main reason behind this is that it lowered its value in China. Developed cost-effective products that meet the needs of China's independent brands.

　　 It is this strategy of the foreign-funded parts giants that has made it more and more penetrated in my country's auto industry. According to the reporter’s understanding, in addition to high-tech and core technology, foreign-funded parts and components companies currently control more than 90% of the market in key areas such as automotive electronics and engine parts. The proportion has also been further improved in this round of growth. However, Chinese independent parts companies that lack independent Ru0026D capabilities and core technologies can only use resources and cheap labor to gain market share.

　　 In fact, because foreign-funded parts and components companies have taken the lead in realizing large-scale domestic enterprises, it is very difficult for domestic companies to catch up. A senior executive of a self-owned brand company once told reporters that if a certain technology is controlled by foreign capital, before there are competitors, foreign parts companies maintain high profits, and once competitors enter, they have already made high profits and Parts suppliers with economies of scale have responded to the challenge by drastically reducing prices.

　　 In interviews with reporters, most foreign component suppliers have to admit that in the future, local Chinese component suppliers will assume more of the role of second-tier suppliers of foreign component companies in China.

　　 Dong Jianping, Deputy Secretary-General of the China Association of Automobile Manufacturers commented on this: Domestic auto parts companies have not made great progress along with the blowout of the Chinese auto market. The key reason is that local auto parts companies do not pay attention to the investment of technical forces. Many companies regard the development of auto-related technologies as too simple and easy. This is actually a misunderstanding of local auto parts companies.