This year, after China became the first country to sell 10 million cars annually, the auto parts system has become a bottleneck restricting the development of China's auto industry. Yesterday, Xu Jiangming, director of the Resource Development Department of the National Information Center, said that the Chinese auto parts system must be integrated and the state’s policy of guiding mergers and reorganizations should be introduced as soon as possible. More experts at the meeting predicted that in the next decade, China's parts and components companies will reduce by 70%.
The "scattered spread" restricts the development of the industry
“A piece of scattered sand, this is the status quo of China's auto parts industry.†At yesterday’s summit, Xu Changming, director of the development department of the State Information Center, said that 82% of the company’s sales revenue is below 100 million yuan, and 15% of corporate sales revenue is 1 - Between 500 million yuan, only 2% of the company's sales revenue is between 5 and 10 billion yuan. There are very few companies with sales revenue exceeding 1 billion yuan, and most of them are foreign companies or joint ventures. "Compared with Visteon, Bosch, Magna, Delphi and other world giants, we are too weak." said Xu Changming. Jia Yongxuan, a well-known automotive consultant, also believes that low industrial concentration, lack of independent research and development capabilities, and no brand advantages are major problems that plague the development of auto parts in China.
Xu Changming also announced a surprising number of figures. "In 2007, we had 4.9 billion yuan in investment in R&D for a total of 8,000 parts and components companies above designated size, and Bosch, the auto parts giant, invested about 3 billion pounds in research and development. It is seven times our national total investment, which is enough to see the degree of backwardness in our own research and development."
Experts encourage mergers and reorganization
It is understood that in this year's series of plans for the revitalization of the automobile industry, the state has successively promulgated relevant support policies for the merger and reorganization of vehicle companies and support for the merger and reorganization of auto dealerships, but there is no guidance policy for the integration of auto parts industry. “The current situation is grave and integration is imminent. If the parts and components system fails to grow during the rapid growth of vehicle sales, it will no longer grow.†Xu Changming said in an interview with this reporter after the meeting.
Wang Xiaoming, a researcher at the Development Research Center of the State Council, said that in this round of consolidation, leading companies with strength must take responsibility. Xu Changming also stated that the central and local governments can encourage some enterprises to integrate in the form of industrial alliances. “For example, in the western city of China, there are dozens of gear companies in Liangjiang, which are mixed, and can be considered as integrated into several large enterprises. "Xu Changming said that the government may also consider introducing policies to support mergers and acquisitions, such as giving preferential treatment in taxation, land use and other aspects. Jia Yongxuan, an automotive consulting expert, predicts that in the next decade, China’s auto parts companies will reduce by 70%, form “small giant†companies, and compete with foreign parts and components companies.
According to experts' suggestions, companies have stated that they will first become bigger and stronger, and then talk about acquisitions.
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