Six Optional Development Modes of China's Auto Parts Industry


Currently, China's auto parts industry has formed an “attached” development model based on complete vehicle support. The structure of this model is a framework that surrounds the entire vehicle company and multi-layered parts companies. Its shape is similar to an arrow target: the bull's eye is the vehicle manufacturer; the second ring is the core component company; the third ring It is a key component company; the fourth ring is a collaborative enterprise. This kind of development model is closely related to the development of China's auto manufacturing companies. Like auto vehicle production, most of them rely on a fixed cooperative relationship formed by relying on local protection policies, asset integration, or business conglomeration to sustain or obtain comparative advantage. Highly profitable.

Six development modes to choose from

After China's accession to the WTO, multinational automobile and component production enterprises accelerated their entry into China. At the same time, many well-known automobile manufacturers continue to reduce the self-preparation rate of parts and reduce the number of collaboration plants, gradually adopting the internationally accepted principle of comparative procurement, and adopting the strategies of global production and global procurement, which have changed from the original procurement to multiple parts manufacturers. Purchasing from a few system suppliers, from a single part purchase to a module purchase, from a domestic purchase to a global purchase. The change in investment strategies of multinational companies and the development trend of the parts and components industry have made the original “attached” development model subject to great challenges and have had to consider other development models.

(A) completely out of the mother model

The complete disengagement of the mother model means that the qualified parts and components factory will be completely separated from the entire vehicle company, and it will truly become an independent company with research and development capabilities and capable of supporting a variety of models or multiple vehicle companies. The advantage of this model is that it can reduce the self-control rate of the entire vehicle company, reduce the investment in the development of new products and expand the production scale, and increase market resilience. It is beneficial to the specialization of parts and components companies and the expansion of production scale; It is beneficial to the formation of parts and components companies and the improvement of product development capabilities, reducing the reliance on vehicle companies; It is beneficial for parts and components companies to absorb external capital and technology, and develop an independent development strategy. For multiple models, more manufacturers supporting.

(b) Specialization model

This model is based on the principle of high specialization, with a high market share, relying on advanced technology and technological equipment, and pursuing economies of scale in the development of auto parts companies. This is also the “Ninth Five-Year” development of China's auto parts industry. Plan the proposed development model. Its advantages lie in the fact that there are few types of parts and components, a high degree of specialization and serialization, advanced technology and equipment, low product costs, and a high market share, which are conducive to achieving economies of scale in the company.

(III) Joint venture model

The joint venture model is an equity-style cooperation method established by the two parties in order to obtain some kind of synergy. It is not limited to Sino-foreign joint ventures. Different domestic industries, different regions, and different ownership enterprises can enter the auto parts industry through joint ventures. In particular, private enterprises cooperate with OEMs to develop auto parts industry, and there will be certain reduction in cost. Advantage.

(D) rely on technological innovation model

Relying on the technological innovation model is to use technological innovation capability as its core competitiveness, relying on talented personnel and capital investment to continuously develop high value-added products, thereby enhancing the ability to support multiple models and multiple manufacturers, and expand market share. The principles that should be adhered to by the component companies choosing this model are: high value-added products, specialized research fields, advanced basic research, and continuous capital investment.

(5) Strategic alliance model

A strategic alliance is a partnership established between two or more companies in different countries or regions to achieve a certain strategic goal. This kind of cooperation mainly includes forms of research and development, licensing, franchising, and mutual shareholding. China's auto parts companies should also participate in international competition, but the current outstanding problem is that there is no independent national brand, and international marketing channels are not smooth. These problems are completely relied on by our own power to solve them. It often takes a long time and sometimes it is even very difficult. If some forms of international cooperation, such as strategic alliances, are adopted, it is possible to solve these problems within a short period of time.

(6) Establishing a system company model

The car can be structurally divided into parts, components, assemblies, assemblies, systems, and system components. Here, the assembly, system and system components are collectively referred to as a system, that is, an assembly that has a specific function and can be independently installed and used. The so-called establishment of a system company model is based on the system as a unit to set up auto parts companies. A company can produce one system or several systems. The advantages of organizing the company by system are: It is beneficial to the specialized production of parts and components companies to achieve economic scale, which is convenient for multi-models and multi-factories; It is favorable for high-level product development capabilities of parts and components companies; It is advantageous for large-scale similar projects with foreign countries. The company carries out technical cooperation.

The Strategic Choice of China's Spare Parts Industry

From the perspective of the typical and near-term practicality applicable to the auto parts industry, these six modes are mainly. Moreover, these six models are not independent of each other. For example, if a component company that has been separated from a main engine plant does not have independent research and development capabilities, it will be difficult to establish its own business; in order to meet the challenges of joining the WTO and to meet the requirements of the global procurement strategy of the entire vehicle company. It is difficult for the domestic parts and components companies to obtain competitive advantages in technology, capital, and markets if they do not enter into joint ventures or form strategic alliances with auto parts companies in developed countries. Therefore, the actual development model chosen is likely to be the synthesis or combination of some two or three models.

According to the current reality and future development trends, the joint venture model and strategic alliance model for the development of China's spare parts industry are more appropriate. From the reality, due to the fierce competition in the parts and components industry, some enterprises with abundant funds and relatively flexible mechanisms have relatively large competitive advantages. Since 2001, the total industrial output value of foreign-funded enterprises and joint-stock parts and components enterprises is much larger than that of state-owned enterprises and collective enterprises. Moreover, most domestic auto parts companies that are competitive have also been joint ventures. Judging from the development trend, multinational auto parts suppliers currently joint ventures with domestic manufacturers are large suppliers engaged in global business activities in the world. In terms of expanding overseas, their globalization strategies have certain similarities, ie Development strategy, internationalization strategy, multinational localization strategy and multinational strategy, and other macro development strategies, through China's trade and technical cooperation, capital expansion, technology penetration, mergers and reorganizations, especially through large-scale system investment in China and strategic adjustment , Multinational auto parts suppliers gradually incorporate China into their value-added chain or operating network. In addition, a multinational strategic alliance is a looser form of cooperation based on agreements. It is less controlled, and it is more suitable for China's spare parts to not only exert comparative advantages, but also to learn advanced technologies of multinational companies. It becomes a manufacturing center, research and development center, and management and operation center in a global network of multinational auto parts suppliers.