Anhui Accelerates the Development of Automotive Component Pillar Industry

Anhui Accelerates the Development of Automotive Component Pillar Industry


In the “861” action plan of Anhui Province, the processing and manufacturing industry ranks first in the construction of eight key industrial bases. The automobile industry is the first pillar of modern processing and manufacturing, and parts and components are the basis of the automobile industry. In recent years, the automotive industry in our province has made considerable progress, but the auto parts industry has lagged behind, and there is great room for development and exploration potential. According to the “Automobile Component Research and Research Project of our Province” selected by the Governor Wang Jinshan, we went to Hefei, Maanshan, Wuhu, Anqing, Ningguo and Tongcheng to conduct on-site investigations in June.

Mixed state of affairs

In recent years, the automotive industry in China and our province has grown at an average growth rate of 10 times that of the world’s automobile industry. Anhui's car production ranks fifth in the country, and the modified car ranks third. The development of automobile vehicles has stimulated the rise of the auto parts industry in Anhui Province.

According to the survey, in 2003, Anhui auto parts production enterprises reached a statistical scale of 53, completed an industrial output value of 4.63 billion yuan, and realized a sales income of 4.208 billion yuan (not including tires, glass, plastics, chemical fiber, and fabrics for interior decoration). The sales revenue of the parts and components industry accounts for about 18% of the automotive industry. About 70% of the output value of the automotive industry is created by supporting enterprises. The output value of the domestic automotive industry accounts for only 25% of the components, which is also higher than our province. Among the automobile accessory enterprises in our province, there are also some “little giants” with rapid development momentum. For instance, Anqing Huanxin Group produces internal-combustion engine parts, and its piston ring’s domestic market share is 50%. It also exports to Japan, South Africa, and the United States. The total sales can reach 600 million yuan and the profit can reach 170 million yuan. It is building the world's largest piston ring base and the largest production base of gasoline engine cylinder liners in China; Ningguo Zhongding Company produces automobile seals, and its scale, equipment and technology are all Ranked first in the national counterparts; Wuhu Siemens VDO company in addition to production heavy truck instrument, but also the introduction of the German engine management system idle air control valve, exhaust gas return valve and other production lines. Other Rugao filters, Guoyang car brakes, Hefei's axles and Jiangnan's hinge components are all influential brands. However, the auto parts products in our province are less than 30% of the entire vehicle in the province, and the foundation is poor and the scale is small. Compared with the automotive industry in the province, the proportion of fixed assets in the parts and components industry is still less than 40%. For example, according to the ratio of auto parts and components investment in the world generally being 1:1.2~1.5, the parts and components in our province The input gap is quite large. In terms of Wuhu, which is a relatively concentrated auto parts company, more than 130 enterprises in the city have only Siemens VDO, Jiehua, and He'an in 2003, and 70% of the enterprises have not yet reached the national statistical definition. The scope of enterprises above designated size.

Due to the high concentration of vehicle industry in Anhui Province, most of the parts and components industries are located in the area of ​​more than one hundred kilometers in diameter. Industrial clusters have been initially formed, and investment channels have also begun to diversify, not only within and outside the province, but also foreign capital. Also multinationalized. Since 2003, Wuhu Automobile Parts Industry has accumulatively introduced 17 foreign-funded projects, utilized 110 million U.S. dollars of foreign capital in contracts, utilized foreign funds of 88.9 million U.S. dollars, completed 15 foreign-funded enterprises, introduced 33 domestic-funded projects, and introduced 780 million yuan of domestic capital for contracts. The actual domestic investment was 650 million yuan. However, for most SMEs, the funding issue is still an important factor hampering their development. The data shows that the auto parts industry in our province has less than 1.3 billion yuan of working capital each year, only one third of Zhejiang Province.

Opportunities and challenges

There are three markets for auto parts: First, domestic automakers, second, auto repair market, and third, international market. There are good opportunities in these three areas.

The rise of China’s accession to the WTO and the global procurement of auto parts has led some international multinational car OEMs and auto parts manufacturers to reduce their labor costs and have once again turned their attention to Chinese auto parts production plants to directly invest in and set up factories in China. Directly to the Chinese market for procurement, this is an opportunity for China's auto parts to expand production and exports. Only in Lugu Lake, there have been well-known foreign companies such as Italian Marelli, Singapore Jingyuan Heavy Industry, American Hansen, European Taiao, Swedish SKF, Japanese Kenajama, and South Korea Dongguang. It is reported that Ford Motor Company has listed China as a major spare parts procurement country, and it is estimated that the purchase of spare parts will amount to 6 billion US dollars in the future.

It is also predicted that before 2008, China's auto industry will maintain double-digit growth. Recently, the Ministry of Commerce stated that China’s total automobile production in 2004 will be about 5 million, an increase of about 13%, which will enable China’s auto output to reach a million-level level for four consecutive years. With more cars entering the home, the automotive industry will continue to maintain a higher growth rate than other industries in the future. In particular, the rapid growth of automobile production in our province has naturally provided a good opportunity for the development of auto parts companies. Not only that, as of the end of 2003, the country’s civil vehicle ownership was 22 million, the national vehicle maintenance volume exceeded 100 million, and the annual production value was 40 billion yuan. The demand for parts and components is also increasing.

At the same time, Anhui auto parts companies are also facing severe challenges. The first is the pressure from the international market. With China's accession to the WTO, the import tariffs on spare parts have decreased, and a large number of auto parts, especially some key components, have flooded into the domestic market. On July 1, 2006, the tariff on imported auto parts dropped to 10%, which may cause more imports of parts and components. In addition, the currently prevalent SKD (part-assembly) production methods are mostly high-end models of foreign brands, and almost 30% of the parts are imported.

According to the survey, most of the so-called new models currently launched in China are developed overseas. Even some new models that are known to be synchronized with the world are already well established in foreign countries. Therefore, it is difficult for domestic parts and components companies to supply them, because they must first pass the certification of foreign parts manufacturers. In addition, foreign-funded enterprises or joint ventures are often supplied by “modular” supply centers, and the components that make up such modules are Most of them are imported parts, which makes China's parts suppliers become second-tier suppliers, while foreign-funded enterprises are the real first-tier suppliers.

The implementation of the "Three Guarantees" for the quality of automobiles and the implementation of the automobile recall system on October 1 this year put stringent requirements on the quality of auto parts and parts; A large part will be allocated to the upstream parts and components companies, and auto parts companies must face the above-mentioned double challenges.

Some suggestions for development strategies

The next five years will be a critical period for the adjustment of China's auto parts industry. There are many issues that need to be considered and resolved. Special recommendations are as follows: First, strengthen organizational guidance and optimize service support. In recent years, the province's auto vehicles and some parts and components “little giant” enterprises have been able to develop rapidly. It is inseparable from the guidance and support of provincial and municipal leaders and relevant departments. Due to institutional reforms, the former provincial automobile industry leading group has ceased to exist, and the functions of the automobile industry association are not yet clear and it is difficult to play a role. It is proposed to guide, support and serve the development of the automobile and parts industry from three different levels. The first is to establish Anhui Province to speed up the development of a joint conference system for the automobile and parts industry. The joint meeting was convened by the relevant provincial leaders. The member units can participate in the regular study of the provincial automobile by the relevant government departments such as the National Development and Reform Commission, the Ministry of Finance and the National Land Agency, as well as the provincial Automobile Industry Association, the Provincial Automotive Industry Association, the relevant provincial and provincial enterprises, and important foreign-funded enterprises. And the major issues in the parts and components industry, the meeting's office can be located in a provincial government department, such as the Provincial Development and Reform Commission. The second is to establish and improve the Automobile and Components Society of Anhui Province, which is mainly composed of experts on the research, production and management of automobiles and parts in the province. The main tasks are to understand and analyze the development of automobiles and parts, publish relevant information, and hold academics. Seminars and exhibitions, permanent establishments can be placed in universities or provincial automobile and parts R&D centers. The third is to improve and clarify the organization and function of the Provincial Automobile Industry Association. Its work should cover the development of the automobile and parts industry that are not included in the above two organizational forms.

Second, persist in technological innovation and expand self-development. Strengthening the capacity for independent development is an important issue for China's auto industry, which also includes the introduction of foreign advanced technology to be digested and absorbed, and to improve the capacity for independent development. Without its own brand, there is no place in the automotive world. Chery and Jianghuai in our province can be said to be representatives of national brands. This is the pride of Anhui people. However, experts estimate that so far, China's automotive product development technology has lagged behind foreign developed countries by about 10 years. To this end, it is proposed to fully utilize the protocol of the Work Consultation System signed by our province and the Ministry of Science and Technology in July this year to further implement the measures for promoting the development of the automobile and parts industry in our province, focusing on the construction of a vehicle R&D platform and the establishment of an alliance for production, learning and research. Carry out major automobile R&D projects, explore mechanisms for joint promotion, and improve the autonomous innovation capabilities of our province's automobiles.

Third, to strengthen the cluster effect, focusing on helping and strengthening.

In the market economy, auto parts companies rely on their own competition for development, but the government and industry organizations should pay attention to the development of core products and superior products in parts and components. To enhance the core competitiveness and market competitiveness of enterprises, we must concentrate our efforts on giving priority to supporting the further development of parts and components companies with comparative advantages and development potential, and make them bigger and stronger as soon as possible. Accelerate the construction of auto parts industrial parks, especially the construction of parts and components industrial parks near the auto factories, and further exert the effect of industrial clusters, which will facilitate the division of labor and cooperation, attract investment, develop new products, and reduce logistics costs. Therefore, it is necessary to focus on the construction of Wuhu Automobile Industrial Park and Hefei, Anqing, Xuanzhou and Handan Auto Parts Industrial Parks.

Fourth, implement policy support and promote development in multiple ways.

Combined with the "Auto Industry Development Plan" promulgated and implemented by the state on June 1 this year, Anhui Province will further improve the development plan of the auto parts industry, and in particular, improve the feasibility of planning, and classify auto parts products in China's high and new technology. In the export catalogue of products, in order to allow the export key enterprises to enjoy more preferential policies from the direction. It is necessary to formulate and implement preferential policies to encourage our province's auto manufacturers to increase the proportion of supporting parts and components in the province and promote the development of the parts and components enterprises in the province in line with the principle of the same priority in the province with the same price. Financial policies such as fiscal interest subsidy or capital subsidy can be adopted to build guarantee institutions for small and medium-sized parts and components enterprises and to set up technical progress award fund organizations to support the expansion of capital investment by parts and components companies, increase the output of high-quality products, and raise the technological level and economic efficiency. . New products for parts and components companies, especially high-tech products, should be given support for tax relief policies. For domestic and foreign companies that develop auto parts, it is recommended that they enjoy the same national treatment as the preferential policies for land and supporting projects.

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