At present, Chery, Great Wall, Zhongxing, Yutong and other companies have established assembly plants abroad. Futian exported more than 30,000 vehicles each year and plans to build overseas factories this year. While entering the Chinese market, foreign-invested vehicle companies have almost brought in all spare parts suppliers to set up factories in China. However, there is not yet a spare parts company in China that builds factories overseas with the vehicle companies.
When will China's local parts and components companies be able to compete with the vehicle?
Vehicles and parts companies go it alone
After a joint venture between the European and American auto companies and China's auto companies, a large number of European and American spare parts suppliers were brought to China. Japanese automakers did the same, and South Korea's modern industry was even more apparent. In the early days of the establishment of Beijing Hyundai, its primary suppliers were basically Korean-owned or joint ventures. Only a small number of Chinese local component suppliers gradually entered the supporting system since last year. Judging from the experience of foreign countries, the vehicle has played a key role in pulling exports of parts and components.
In recent years, with the rapid increase in the export of complete vehicles and parts in China, not only automakers, but more and more local parts and components companies have gone abroad to set up branches and factories overseas, Zhejiang Wanxiang, Ningbo Huaxiang Group, Fuyao Glass Industry Group and other companies have also begun mergers and acquisitions overseas.
On the surface, China’s exports of complete vehicles and parts and overseas factories are gratifying. But in-depth analysis, we will find that, contrary to the practice of European and American, Japanese and South Korean companies, China's entire vehicle and parts and components companies export, overseas factories are mostly alone, and joint efforts to expand the international market is almost no.
Xinyi Glass has successfully entered the United States and European markets. The relevant person in charge of the company told reporters that at present its overseas market is basically its own development, and there is no vehicle company that advises them to set up factories overseas.
Companies such as Shandong Jin Qilin Group and Xinyi Brake Co., Ltd. have also successfully opened the European and American markets, but they are all the result of their own struggle. The export of the whole vehicle is not very useful for them.
It takes time to "zero" with "the whole"
As we all know, the biggest advantage of building a factory in foreign countries is that it can be adapted to local characteristics and timely supply of parts. However, at present, it is unlikely that China's auto parts enterprises will "take root" globally with the vehicle.
“With the increase in vehicle export volume, vehicle manufacturers should consider setting up factories overseas. At the same time, component factories should also follow up in a timely manner,†said Dong Jianping, deputy secretary-general of the China Association of Automobile Manufacturers.
According to Fu Peizhao, deputy secretary-general of the Automotive Branch of the China Electromechanical Products Import and Export Chamber of Commerce, compared to 2006, the scale of China's auto exports has been greatly increased in 2007, and the degree of export concentration has also been effectively improved. In 2007, there were a total of 374 enterprises with export value over US$1 million in China. The total export value accounted for 96.8%, and the total export volume accounted for 97.1%. However, there is a problem that export products and amounts are relatively dispersed.
In addition to being restricted by the size of exports, Teng Bole, secretary general of the China Automotive Industry Advisory Committee, believes that China's auto industry is weak in terms of overall promotion and zeroing capacity, largely because the zero relationship in the automotive industry in China is not handled well. In addition, there are also factors such as automotive industry policies that are at work.
“Foreign vehicles entering China can bring in parts and components companies because they have a harmonious relationship between zero and the whole, and both parties are interest communities. The relationship between auto manufacturers and parts suppliers in China is to reduce prices and mistrust. How to go abroad? If you want to promote zero, you must first improve the relationship between zero and create a true strategic partnership between the two,†said Teng Bole.
Who will be the first person to eat crab?
At present, the encouragement of the export of automobiles and components has been designated as the key development direction of the Chinese automobile industry, and the government will strengthen the vehicle's pulling effect on parts and components. It can be foreseen that with the increase in the export volume of vehicles, the improvement of the zero-to-zero relationship will surely be able to see Chinese OEMs and parts and components companies co-operate in the international market.
So who will be the first to eat crabs in the future? Dong Jianping believes that it should be those companies that have a zero-sum relationship, strong R&D capabilities, product quality, and certain brand influence. In contrast, a component company attached to a large vehicle group is likely to take precedence over an independent supplier.
In 2007, Great Wall exported 50,000 vehicles and earned foreign exchange of 450 million yuan. At present, the Great Wall has established CKD factories in Russia, Ukraine, Egypt, and Nigeria. “Most key parts of the Great Wall are produced by the joint-venture parts factory within the group. At present, we have no spare parts company to build factories overseas along with the entire vehicle. The reason is that the parts, technologies, testing, etc. are manufactured abroad. The conditions are not yet mature. In the future, with the expansion of the scale of exports, this should be possible.†said Shang Yugui, head of the Great Wall Motor Company’s propaganda department.
In addition, in 2007, Chery, China National Heavy Duty Truck and other companies not only ranked top in vehicle exports, their overseas factory projects also progressed smoothly, and they have made major breakthroughs in key components. Once the time is ripe, it is believed that the entire vehicles and parts of these companies will show their prowess on the overseas stage.
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