At the beginning of the second half of this year, the establishment of Volkswagen FAW Automotive Parts Co., Ltd. marked that the internationally renowned automobile group companies have begun to adjust the layout of productivity in China: from the entire vehicle to the full range of automobile production systems. The company is part of the medium to long-term planning of the Volkswagen Group in China. Its leading products include powertrains, drive systems, suspension systems, steering systems, brake systems, etc. It can be said that it has become a popular series of passenger cars and commercial vehicles. It has laid a solid foundation in the Chinese market. The shareholding ratio of 60% of Volkswagen and 40% of FAW is enough to reverse the name of the company and the joint-venture vehicle company (FAW-Volkswagen). The public's ambition to control the Chinese market is evident.
Coincidentally. The establishment of Bosch Automotive Diesel Systems Co., Ltd. in Wuxi in August (67% in Bosch, Weifu accounted for 33% of the shares) has added to the past two years a strong move for multinational auto parts companies to enter the Chinese market. Bosch's existing companies (departments) in China have more than 50% (including 50%) of their total shares, and thus Bosch has completed the phased tasks of investing and setting up factories in China.
In fact, in recent years, multinational auto parts companies have attacked the Chinese market, not to mention two people, Bosch, Delphi, Visteon, Denso, Valeo, Lear, TRW and other world giants frequently transferring their production bases to China. The coincidence of the rapid development of China's auto industry shows that a new round of industrial transfer has begun across the world. Take Delphi, Bosch, Visteon and Denso as examples. They have established more than 30 manufacturing companies in China. According to incomplete statistics, Delphi owns two wholly-owned companies and one investment (holding company) in China; Bosch owns one wholly-owned trading company and one wholly-owned company; Denso owns one investment (holding company)... At the high end of the car In the field of technology, the parts and components companies in various countries (regions) brought in by joint-venture vehicle companies have already seized the market for their leading products and major supporting models, and gradually shifted their products, technology inputs to products, technologies and funds. , Management, procurement, and supply of all-round control. Sole proprietorships and joint ventures have become an important means for multinational corporations to control the direction of their businesses and markets.
"As the barriers to entry in the auto parts industry are reduced, more and more foreign investors will tend to opt for sole proprietorship." This is the view expressed by Chen Jinya, president of Delphi China. In fact, as far as China's auto parts market is concerned, it is mainly to satisfy domestic matching and after-sale maintenance services. In this case, customers, markets, personnel, and production and operation facilities are all based on me. What domestic companies lack is technology, capital, and management. Mr. Chen Jinya said that one of the benefits of a joint venture is that someone helps you approach a strange market faster. It seems that foreign investors see this very clearly. Relative to the sole proprietorship, the shortcomings of the joint venture are also revealed: the negotiation time of both parties is too long; the assessment of performance and stock assets is often too high; be aware of the hidden financial debts such as historical legacy debt; and it is necessary to negotiate with Chinese partners repeatedly. Obtain consensus and so on. In terms of business management, sole proprietorship is certainly easier to control than joint ventures.
In response to this phenomenon, Zhang Junshun, an expert from the China Association of Automobile Manufacturers' Market and Trade Committee, pointed out that the owners of the joint-venture vehicle companies are not willing to offend the original suppliers. Zhang Yushun said that these foreign vehicle companies have mostly cooperated with existing parts suppliers for many years, and are very reassuring about their quality and development capabilities. They are reluctant to spend a long time in China and re-establish new matching relationships. Of course, according to the differences of foreign companies and the differences in the personality of foreign general managers and senior management personnel, foreign practices are not the same. Some foreign companies are very assertive and cannot hear the opinions of the Chinese side; The party is relatively open and basically follows the principle of fair competition, and some companies often listen to the opinions of Chinese experts.
For the recent suspension of automobile exports by a domestic vehicle joint venture company, it was finally necessary to use spare parts for export and re-assembly, and all critical parts had to use the parts of the original model. Jia Xinguang, senior analyst at the China Automotive Industry Development Institute, was right: " If there is no restriction on vehicle imports, then the problem is that you lack core technology. "Jia Xinguang said that we originally brought in other people's products in the country. People just match their resources globally. In which country the production is equivalent to the country in which the export product is processed, the decision is entirely in the hands of others.
I remember that a veteran of China’s auto parts and components group once said with painstakingly that, driven by interests, the foreign partners of the joint venture directly brought parts and components manufacturers to China, and high-value-added products, especially electronic products, were mostly controlled by foreign companies, such as fuel oil. Many injection equipment, active safety systems, sensors, etc. are controlled or wholly owned by foreign companies. Whether or not to use the products of domestic manufacturers is entirely at the discretion of the foreign party, using yours means disrupting the channels of the original suppliers, so people must certify your products.
As a businessman, who does not have any interest? In the past few years, when the domestic auto market was not large, it was not possible to see which foreign parts and components companies would have to be wholly owned. Because the output was not large, it was impossible for anyone to provide any benefits. Now it's different. There isn’t a foreigner in the auto factory that doesn’t pull in the original manufacturer. The parts supplier is looking at your market and resources, doing things in China, doing things in China, and doing things in other countries. There is no essential difference. The main considerations are local policies, trade barriers and cost factors. If these issues are not a problem, we must consider the possibility of setting up factories in China from the perspective of global procurement. With the words of a general manager of a domestic automobile group company, don't worry about it now. Wait for your auto company to develop and expand. After seeing his spare parts company still return to your market?