Multinational parts companies go deep into localization

Multinational parts companies go deep into localization


The localization of multinational auto companies is in full swing. Correspondingly, multinational auto parts companies in the auto industry are also striving to accelerate localization in the Chinese market. This trend is particularly prominent at this year's Shanghai Auto Show.

Despite the small size of parts and components exhibitions in comparison with last year's Beijing Auto Show, the enthusiasm of the participating auto parts companies at the Shanghai Auto Show is very high. Companies including ZF, Delphi, Bosch, Lear, Denso and many other auto parts makers have fully exhibited their products.

Compared with the enthusiasm for participation, the localization of multinational parts and components companies is the biggest bright spot. Many of the parts and components companies have expressed their increasing localization strategies in the Chinese market.

In-depth localization

During the Shanghai Auto Show, ZF ZF, a famous parts supplier, announced its localization strategy in the Chinese market, which included increasing the production of local chemical plants and establishing a joint venture with Beiben, and stated that it would start establishing R&D centers in China.

Beginning this year, ZF ZF will include 9-speed automatic transmissions, hybrid 8-speed automatic transmissions, lightweight chassis design, infinitely variable damper control shock absorbers, and key vehicle systems. Electronic power steering systems and other products are introduced outside the Chinese market and will also participate in the localization of the Chinese market. At the Shanghai Auto Show, ZF ZF signed an agreement with China National Heavy Duty Truck Group for the supply of the Ecosplit manual transmission for CNHTC. This transmission has already been produced by ZF's Hangzhou production base. The China Economic Times reporter learned that, as a localized operation in the Chinese market, ZF's new passenger car axle system in Beijing will also be officially put into operation in 2013.

Compared with the previous introduction of products only to the Chinese market, or the establishment of localized production plants in the Chinese market, the strategic focus of multinational component companies in-depth in recent years is to establish localized R&D centers in the Chinese market. ZF ZF is no exception. At the Shanghai Auto Show, the company announced that its R&D center in Shanghai will develop high-tech products exclusively for the Chinese market and will be produced by ZF ZF's production base in China.

ZF ZF is not the only company that has established an R&D center in China. BASF, which has just announced that it has entered the auto parts business in the Chinese market, has also set up its own R&D center in Shanghai, and has provided solutions for automotive lightweighting and component materials for China's own brand enterprises. It is understood that the giants of parts and components such as Bosch, Delphi and Denso have already entered the Chinese market. As early as a few years ago, they established their own R&D centers in the Chinese market. China Economic Times reporter learned that only at this year's Shanghai Auto Show, there are several giants announced the establishment of an R & D center in China, and rooted in the localization market.

Chinese market needs

“Overseas auto parts companies have entered the Chinese market one after another. Undoubtedly, they have seen tremendous benefits in the Chinese market.” In an interview with the China Economic Times, an industry analyst stated that the light of the sales of products, the entire Chinese automobile industry The double-digit growth in car sales every year has not been imagined in any market in the past. "The huge market will certainly benefit many multinational parts companies."

It is not just the immediate interests. The long-term huge potential for multinational parts and components companies is a huge temptation. According to the analysis, China's auto vehicle sales will reach 30 million in 2015. If we calculate the average number of thousand people in terms of car ownership in the global developed countries, the average number of people in China is about 100, and there is still a big gap. Even if it reaches the level of a medium country, the future of China’s auto market will continue to double. The potential of the market is even more self-evident.

In fact, the above figures are only China's annual vehicle sales level for the parts and components industry. This does not include the retail sector for parts and components. In particular, China now has more than 100 million units of vehicle ownership.

"Increase in the Chinese market strategy becomes inevitable." Senior automotive industry analyst Zhong Shi said that multinational auto parts companies to increase the localization of the Chinese market is an inevitable trend, this aspect is the Chinese automobile market's industrial policy The need, on the other hand, is temptation of the huge benefits of the Chinese market.

According to the analysis, according to China’s automobile industry policy, foreign automobile brands must enter the Chinese market, and they must inevitably perform localized production in China. With the government’s requirement for joint ventures to establish joint ventures, multinational automobile brands also need to establish localization in succession. R&D. Under these factors, the localization of auto parts has become inevitable. In particular, the establishment of vehicle production plants has been successively established. Take the Volkswagen brand as an example. At present, North and South China Volkswagen successively established different production bases in various regions of China. Due to the vast geographical area in China, vehicle manufacturers must require parts and components companies to establish spare parts supply clusters around the main engine plant in order to better Close to the main plant to achieve timely production, and for parts and components companies, also reduced logistics costs accordingly.

In addition, localized production and R&D of auto vehicle companies also further promotes that parts and components companies have to establish their own R&D centers in the Chinese market.

Change the pattern of China's parts industry

“The multinational component companies have increased their localization to the Chinese market, which will undoubtedly change the pattern of China’s existing parts and components companies.” In an interview with the China Economic Times, many insiders said.

According to the analysis, due to the weak foundation for a long time, China's spare parts industry has been large and not strong. With China’s joint venture with international auto brands, some joint ventures have successively introduced parts and components companies in line with their own systems into the Chinese market. Since this period, this status has actually broken the industrial structure of the original Chinese parts and components. Prior to this, the scope of Chinese parts and components companies to be involved has been limited to parts such as automotive parts and non-core electronics and vehicle outsourcing plastic parts, and some key parts and components have almost no involvement of Chinese local parts companies.

Asked the reason, the aforementioned industry analysts believe that, on the one hand, China's local parts and components companies lack core technology, and domestic companies in high-end parts and components cannot compete with international companies; on the other hand, they are independent brands and joint venture auto companies. It does not bother the technical concept of local parts companies. Even if the technology of individual parts companies reaches a certain level, under the same conditions, the entire vehicle company will still adopt the products of multinational parts companies. Ultimately, even technical parts and components companies have fallen into a difficult business environment.

According to the analysis, with the in-depth localization of multinational parts companies, more foreign parts companies will bring strong technology and abundant funds into the Chinese market, which will cause local parts companies to lose more market territory.

"The impact is inevitable, and it will certainly increase the pressure on domestic parts and components companies." Zhong Shi believes that the future pattern of China's parts and components industry will inevitably be affected. "The stronger local capabilities of transnational corporations, the more pressure will be for local companies to compete." But Zhong Shi also believes that this kind of impact is a double-edged sword. On the one hand, it will result in the elimination of some parts and components companies. On the other hand, It will also promote the growth of domestic parts and components companies. “However, the more important point is that the in-depth localization of multinational parts and components companies will also provide the Chinese market with the opportunity to cultivate local talents, and the flow of talents will also strengthen the local parts and auto parts companies. Skill building."



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