China's core spare parts urgently need to be self-sufficient

In today's world, China has a huge automobile market, and China is a big automobile country, and the correspondingly derived demand for a large number of auto parts and components is also increasing. In the normal US market, the United States has produced 11 million automobiles and imported more than 5 million vehicles, totaling more than 17 million vehicles. The financial crisis in the United States produced less than 9 million vehicles. Japan's domestic production is probably between 7 million units and more than 9 million units. Japan's market capacity is more than 5 million, and Japan has been far behind us. Therefore, in 2010, we temporarily occupied the position of the world's largest manufacturing country and the largest consumer of new cars.

China’s core components and parts have always been dependent on foreign advanced technology and imports. When it is possible to get rid of dependence and achieve true self-sufficiency, this is the issue that has been the focus of most of our autos. Without first-class automotive parts technology, it is impossible to build a first-class vehicle. In the entire automotive industry chain, auto parts have a one-third share, especially high-end parts and even profits exceed the vehicle. Although the sales volume of the Chinese auto market surpassed 18 million vehicles last year, ranking first in the world, the parts and components industry lags behind and has been at a low level of development.

China needs to transform itself from a large automobile production and sales country to a strong automobile production country and urgently needs to achieve breakthrough in the core parts and components industry.

The earthquake in Japan has impacted some Japanese automotive electronics suppliers' production plans. However, these new orders will not necessarily bring opportunities to auto parts manufacturers in mainland China, but they may be favorable to some suppliers in Taiwan or in Europe and the United States.

The industry believes that although the localization rate of the Japanese joint venture models has reached 80%, and even some models have reached more than 90%, some key spare parts still rely on imports. In the procurement system of some OEMs, mainland component manufacturers are not in the procurement list at all.

The earthquake in Japan highlighted the fact that some car companies in mainland China are strongly dependent on Japanese auto parts. According to public information, in 2011, the value of Japanese parts imported from Japan was US$10.91 billion, accounting for 39.9% of the total imports of auto parts. From the perspective of component classification, the proportions of the import volume of parts and components in China's corresponding categories in the transmission system, brake system, feeder components, and steering system components accounted for a relatively high proportion.

If you want to improve the ability to produce core automotive parts and components and do independent innovation, it is possible to become a powerful automobile country. In a certain period, imitation is a prerequisite for learning advanced technology from others, but blindly imitating may lead to a loss of development opportunities. We must achieve development and make breakthroughs in key components. We must also strengthen our independent research and development capabilities and capital investment while drawing on foreign advanced technologies, and attract high-tech R&D talent. Equipment is our own key component industry. Strengthen cooperation and mergers and acquisitions among enterprises, share resources, and transform the parts and components enterprises from a “weak, small, and scattered” situation to “strong, large, and concentrated” to achieve fundamental improvement.

When will China's core components be self-sufficient? I think the solution to this problem is just around the corner. As China’s economic strength continues to grow, investment in the automotive industry continues to increase. China has achieved initial results in terms of technology, policies, market regulations, etc. It is believed that China will be able to grow a number of outstanding and powerful independent core component companies. Reducing the dependence on foreign technology and focusing on breaking up core automotive parts and components to achieve self-sufficiency at an early date.

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