China's spare parts industry has a global development advantage

At the dawn of the fifth anniversary of China's accession to the WTO, the topic of how the auto parts industry responded to the globalization process was raised again. At the International Investment and Trade Procurement Sub-forum of the 2006 China Automotive Industry International Development Forum on September 17, representatives from domestic parts and components companies and business officials from some countries’ embassies in China expressed their views.

Globalization brings opportunities for development

According to Lan Qingsong, executive director of Shanghai General Purchasing Parts, the auto parts industry in China will benefit from the acceleration of globalization. He said that globalization can promote the full participation of parts and components companies in global procurement and enhance the ability of parts and components companies to operate in multiple locations around the world. At the same time, the development capability and technological level of parts and components companies will also be improved.

Lan Qingsong said that globalization can lead to the integration of the resources of China's spare parts enterprises and global excellent parts and components companies, enhance the core competitiveness of China's parts and components companies, and enable excellent parts and components companies to participate in domestic and international market competition and accelerate development. . In addition, globalization can also optimize the supply chain system and shorten the supply radius.

"China Purchasing" Becomes an Element of Multinational Corporation's Competitive Strategy

With the continuous growth of the Chinese auto market, the growth rate of China's auto parts industry has been higher than that of domestic host plants. Parts manufacturers have begun to shift their sights to overseas markets.

Shanghai Nanyang Automotive Parts Purchasing Center general manager Nanyang analysis said that in addition to serving domestic OEM support and domestic aftermarket demands, Chinese auto parts manufacturers are accelerating their pace of exporting to the global market and starting to adapt to the international aftermarket. Global OEM supporting supply chain. According to customs statistics, in 2005 China's exports of parts and components exceeded 10 billion U.S. dollars and more than 1,000 parts and components export enterprises.

At the same time, Nanyang stated that with the restructuring of the global auto industry and changes in the market, multinational manufacturers and component purchasers have already adjusted and reorganized their traditional parts suppliers in order to increase their cost competitiveness. China's auto parts resources are included in its new global procurement resources and supply chain.

Nanyang pointed out that "China Purchasing" has become a hot spot in the competition strategy of multinational auto companies, and it is also a manifestation of the changing trend of global auto industry. According to statistics, in 2004 China's parts and components companies' exports have reached 5.632 billion U.S. dollars; it is estimated that by 2010 China's auto parts exports will exceed 30 billion U.S. dollars.

Domestic parts and components companies have obvious advantages in multinational supply chains

With the growth of the Chinese auto market and the continuous improvement of the localization rate, China's auto parts resources are becoming more and more abundant. Many types of parts and components have obvious advantages in cost and price, and they have considerable international competitiveness.

Nanyang stated that on the basis of resource advantages, China’s auto parts manufacturers have continuously improved their quality systems, supply chain standards, and international product certifications in recent years, and many domestic parts and components manufacturers have achieved the assessment requirements of international buyers through their efforts. , enter the multinational supply chain. The rapid increase in the overall quality of China's auto parts and resources has enabled local companies to rise rapidly and their capabilities have been comprehensively approaching foreign investment or joint ventures, providing buyers with more competitive options for realizing China's procurement.

Nanyang analysis said that because Chinese domestic suppliers are actively concerned about the development of multinational automotive companies, compared with suppliers in other regions of the world, they are more willing to invest in technology according to procurement requirements, so they can further cooperate with buyers and become a new international strategy. partner. In this way, Chinese auto parts companies can more smoothly go abroad, export international aftermarket, and join the global supply chain. In recent years, the export volume and export variety of auto parts have continued to increase, accumulating international business experience for export OEMs and forming a virtuous circle.

At the same time, domestic foreign-invested parts and components manufacturers have also adjusted their global strategies and gradually shifted their focus on manufacturing capacity and technology development in the Asia-Pacific region to China. In addition to the further “localization” of its own operations and the deep localization of its products, it further stimulated the development of the second- and third-tier local components and suppliers in the upper reaches, and improved the competitiveness of foreign companies in the international market.

Many countries shake their olive branches

The growing auto parts industry in China has attracted more and more countries to trade cooperation.

Li Xinyu, an official from the Investment Embassy of the Australian Embassy in China, said that China is currently the 20th largest investment destination in Australia and that as of December 2005, the total investment was A$2.043 billion. At the same time, Australia is China’s 18th largest overseas investment destination. At the end of 2005, it had a total investment of 2.275 billion AUD. Li Xinyu said that currently China is Australia’s second largest trading partner, with a total trade volume of A$33 billion in 2005. He hopes to make greater progress in the cooperation in the automotive industry trade in the future.

Li Xinyu said that Australia has a complete wholesale and retail network in the spare parts industry, with annual imports of components worth 2.7 billion Australian dollars, an annual increase of 3.5%. Australian parts and components have annual sales of about 8 billion Australian dollars (2004), of which the major importers of spare parts are Japan, the North American Free Trade Area, Germany, Thailand and South Korea. Li Xinyu said that Australia’s unique advantages can help Chinese parts companies to develop better.

As the world’s 11th largest automobile manufacturing country and the United States’ second largest trading partner, Mexico has a complete and mature supply chain system. Carlos Santos, commercial counselor of the Embassy of Mexico in China, said that Mexico, North America, North America, Canada, South America, Brazil, Argentina, Chile, and the European Union, as well as the European Union, have established sales agreements, which constitute a more developed sales network.

CarlosSantos said that the export of spare parts is Mexico's advantage. It has strong strengths in the production and processing of components such as steering wheels, steering rods, seat belts, and seat backs. The production capacity of these parts is continuously increasing. Currently, it is actively seeking partners. Mexico has the advantage of low labor costs, but labor education and overall quality are not low, so product quality can be effectively guaranteed. At present, the Mexican government has introduced a series of preferential policies and incentives for attracting foreign investment, including appropriate deregulation of China’s tariff policy and will be funded by the government to organize Chinese companies to visit Mexico on an irregular basis.

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