The 2009 China Automotive Industry Forum, the theme of the annual "Financial Crisis and the Adjustment and Rejuvenation of the Automotive Industry," was opened on September 4, 2009 in the Tianjin Binhai New Area. At the forum's VIP roundtable meeting, relevant government officials, senior corporate executives, and scholars of the automotive industry conducted extensive and in-depth discussions on the development of the parts and components industry under the financial crisis.
On September 5th, Xu Changming from the Information Resources Development Department of the State Information Center gave a report entitled “Opportunities, Challenges, and Countermeasures for Auto Parts Brand Enterprises†at the forum.
Three major opportunities for self-owned brand parts and components enterprises
Xu Changming: Ladies and gentlemen, ladies and gentlemen, Good afternoon, everyone. I am very happy to share with you the views on spare parts. I would like to give you an exchange, opportunities, challenges and countermeasures from three aspects today. From the perspective of opportunities, our own branded companies should have three opportunities. The first is the opportunity brought by the rapid development of the market. This is also the biggest opportunity, and the second is the opportunity brought by the development of the independent brand. It is an opportunity brought by the global financial crisis.
The opportunities brought by market development still maintain a speed of 9% to 10%. The average annual growth rate from 1998 to 2008 is 10.2%. The future is slightly lower than this figure. There are three basis for this judgment. The first is the future 10. In the past year, our economy will continue to develop at a relatively fast pace, and we expect it to maintain its initial level of about 9%. The rapid growth of GDP comes from two forces. One is industrialization. We are in the middle of industrialization and we need to be large-scale. The construction of large-scale equipment and the development of heavy chemical industry also requires the development of the industry. In addition to urbanization, so-called urbanization is the proportion of urban population in the country's total population. In the past few years, we have probably increased the urbanization rate on the average every year. In 2006, it was 43.9%. Now it is about 46%. It is estimated that it will increase in 2020. To 60%. After the peasants enter the city, the production efficiency will increase. The output value of the peasants on the land for a year is 10,000. The average output value of the automobile industry is 30 million. The efficiency will increase and the income will increase, which will increase the consumption level and boost the economy. increase.
Judging the development, we will have relatively high transportation intensity within the next 10 years. The so-called transportation intensity corresponds to the unit GDP. This intensity comes from the distribution of resources and the industrial structure. The resources of our country are not evenly distributed. The more uneven the distribution of resources, the higher the transportation intensity. The left side of this map (PPT) represents the distribution of coal in our country in the three regions of China and the East in 2007. As you can see, 86% of coal production is in the central region, followed by the eastern region, and just the output of the eastern region is 68.5%. The Central and Western regions combined to be 31.5%. We transported the coal and refined it and shipped it back. In addition, we also have a relationship with our industrial structure at this stage. If a country's economic development is at the cross of a production and a secondary production, especially when it depends on the secondary production to drive the entire economic growth, the transportation intensity will be higher, once our economy The development has reached a relatively advanced level. When the main tertiary industry pulls, the transportation intensity is low. The tertiary industry does not need transportation. Only the industrial and construction industries need a lot of transportation. We now have a 50% share of the secondary industry, and it will be difficult to change in the next few years. We have been urging to rely on the tertiary industry. The proportion of the secondary industry is now rising, the tertiary industry is declining, and we will The economic development of such an industrial institution will have this change as long as there is GDP growth. In addition, we have five transportation methods for freight traffic. Railways, highways, aviation, pipelines, water transportation, and pipelines are one. The upper right corner represents the price within a unit volume. The upper right corner has a short time requirement and the unit volume is also high. The downstream railroads and water transport mainly transport bulk goods, etc., and the middle part mainly uses road transportation, including home appliances, food, fruits, etc., depending on which transportation mode is faster, and our country does 7918 projects to develop the national highway network. After planning, when this plan is completed, the density of our road network is probably the same as the current level in the United States. After the completion of the project, we set off from Beijing. The 18 water transport lines, altogether, are 89,000 kilometers, adding up to a very large number. In this way, our economic development will be able to bring about a rapid growth in the volume of cargo, which will lead to a relatively rapid development of our demand.
There is also a passenger car market in the domestic market. We estimate that the passenger car market will be faster in 2020, roughly equal to 1.5 times GDP growth, 10% GDP annually, and 15% per year for passenger cars. This is the judgment that the station is equivalent to a multiple of GDP per capita. When it reaches 3 or so, it is the time when the country popularizes automobiles. The automobile pilot countries have proved this point. We quoted the situation of South Korea and Japan. Japan is In the early 1960s, when the value reached 3, South Korea reached 3 in the early mid-1980s. After reaching this value, the number of car ownership for 1,000 people began to increase rapidly. This is a basic situation. The same is true in our country. Basically, around 2000, the R value reached about 3, and it began to develop rapidly from that point of time. Now, the R value of the 456 cities is also approaching 3, and rapid development begins. This is the law that exists in both the pilot countries and the leading areas of our automobile development. Therefore, we have reason to believe that our R value will reach a level of about 3 this year. Basically this year, when the R value reaches 3 or so, that is, the number of thousands of people is about 15 to 20 vehicles. After that, it takes about 10 years and continues until 1000 people maintain 100 vehicles. Each will maintain a rapid development. In this period of time, Japan grew from a period of average of 22.2% between the years of 65 and 73. The average annual growth of South Korea from 86 to 97 in 12 years was very fast. Our country may be slightly lower than its speed, but our time may be longer. The main reason is that our income is more obvious than the order of their income, so our time is longer. In the future, the market for passenger vehicles in our country will also maintain relatively rapid development. From the perspective of exports, it should be said that it is also a relatively rapid period. This figure is the past few years, and the export has doubled for five consecutive years from 2003 to 2007. Every year is close to 100%, such a rate of development. Exports have declined since the financial crisis in the second half of the year. The first half of the year was very fast, and the second half was negative. In the first half of the year, it fell by 58% in the first seven months of the year, which was a high rate of growth in previous years. Generally speaking, in terms of exports, we have exported more electromechanical and light textile products in the first 20 years of reform and opening up, which corresponds to our initial industrialization period. We enter the heavy chemical industry stage after 2002, which is the rapid development of heavy industry and chemical industry. It is in this context that the industry is growing rapidly. In the future, we are still in the early stages of industrialization, and the international competitiveness of the automotive industry will become stronger and stronger. So, in general, in the future we will judge whether we should still be faster. The export of parts and components is now quite large. In 2007, our parts exports ranked fourth in the world, which is $29.5 billion. The first is the United States, the second is Japan, the third is Germany, and the fourth is It is us, but our growth rate is much faster than them. The average annual growth in these countries is 6% to 7%, and we are 7.5% per year.
The future automobile exports can maintain relatively rapid growth. The first reason is that the domestic large market will have a strong support for car exports. We have studied all the major automobile countries in the world and basically are reversible. As long as they are Car powers will become strong countries, cars need a large-scale industry to support, only to achieve the scale, it can be done is the quality is good, the price is competitive. Therefore, the large domestic market for our exports is very good, and it is a big support. The competitive advantage of our products is mainly reflected in the low cost. Now the fastest growing markets in the world are those countries with high price sensitivity and similar to ours in China. There are 6 billion people in the world. The combined number of developed countries is probably a little more than 1 billion people. 80% are developing countries. The value of their cars is very similar to that of Chinese consumers. There are also markets in the world. The independent brand companies now use internationalization as a strategy to implement. These aspects can support the rapid development of our exports in the future.
The export of parts and components will continue to maintain rapid growth. The competitiveness of China's parts and components industry will gradually increase. It is now an indisputable fact that the global competitiveness of China's manufacturing industry has improved. Nowadays, the global industries have been transferred to China. From spinning products to processed products, we will one day become the world’s largest car exporter. Not only will the market be the first, but exports will also be ranked first. The competition in global manufacturing industry is very intensified. Cost competition is called an extremely important competitive factor. Now that we have studied transnational corporations, many of them come from cost pressures, which basically come from cost pressures, and mergers also come from cost pressures. Separation comes from cost pressures. Therefore, this situation of competitive pressure is very large, and our cost advantage is very obvious. China's parts and components are gradually entering into internationalization. Now multinational corporations have agencies that cross procurement. The vehicle exports will drive parts and components. In this case, exports will be a market, the domestic market will develop rapidly, and exports will develop rapidly. These two factors will lead to the rapid development of our entire market. This rapid development will provide a very large reserve for our spare parts. This is a major opportunity. The development of self-owned brands brings opportunities. This is the development of self-owned brands over the past seven to eight decades. Since 2004 and last year, they have basically grown by more than 30%. This is the sales of self-owned brands. The future can also be faster. There are three reasons. The first is that the high-growth market provides ample room for the development of independent brands. It has maintained a double-digit growth for more than 10 years. This is a judgment, and it provides an independent brand. opportunity. Moreover, the uneven development of our country's economy has also given many opportunities for independent brands. This figure represents the per capita GDP. The lower the level of per capita GDP, the lower we go. We have made statistics on the share of local brands in each province, which was 25% in the previous years in the country, but in the less developed regions. Going further behind, the higher the share of landlord brands, the ultimate self-owned brand in Guizhou province accounted for 47.7% of the total sales. Our uneven economic development is also an angle to support independent brands have market opportunities.
The self-owned brand itself has done a lot of work and has done a lot of work, including product research and development, technological innovation, management innovation and overseas markets. So we have also recently paid attention to the auto show. Recently, there were two exhibition halls of Chery and Toyota on the Other side. It can be seen that Chery’s R&D products are indeed very rich and have certain competitiveness. The market share of self-owned brands was mainly in the A00 market, which is QQ level. Our market has accounted for 72%. In this level, independent brands accounted for a monopoly, and the A-class market accounted for 23.76%. It turned out that we were in B. There are basically no products in the market, and now it can account for 13%. We have more than 50% in MPA. So now we can see that our own brands are gradually improving their competitiveness from the low end to the high end. Moreover, our policy also provides a relatively good environment for the development of self-owned brands. One is to encourage innovation. In addition, the policies we introduced last year provide a very good opportunity for the development of independent brands and the development of independent brands. There will be a good prospect in the future. The development of independent brands will inevitably bring about the development of independent components. This figure is the data we surveyed last year. This is about 60% of Japanese companies are foreign joint ventures, 29% of the procurement is from foreign joint ventures, basically all of the components of domestic-funded enterprises, but the parts purchased by independent auto companies 52.8% are components of domestic-funded enterprises. Therefore, we say that the development of self-owned brand parts and components and the development of self-owned brand vehicles have a pulling effect on the components of the self-owned brands. Of course, they support each other. This is obvious. The opportunities brought by the global financial crisis have given us certain development opportunities.
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Excessive increase in policy standards has brought pressure on parts and components companies
There are three aspects to the challenge. The first is our small scale, weak strength, and a serious shortage of R&D capability. This is the distribution of about 7,000 companies we surveyed in China. Private enterprises also have domestic-funded enterprises. We have companies with sales revenue below 100 million yuan, and private companies. Enterprises accounted for 89%, which is a very large number, mainly below 100 million yuan, basically no more than 1 billion yuan, and the scale is very small. The largest companies are not one, they are many kinds of things and our scale is far from one another. When the scale is small, the strength is naturally insufficient. The investment in R&D of our parts and components is seriously insufficient. This is an investment in the R&D of China's auto parts and components. This is a data base of the database. The growth rate of R&D investment is very fast, but our R&D investment accounted for The proportion of sales is too low, accounting for 0.66%, as one company accounts for 10.2%, and another 10% or 5.8%. The following data is from the UK Department of Labor data. Our national investment in R&D is equivalent to one-tenth of one company. More than half of our companies do not have patents, and less than 20% of companies own invention patents. This basically reflects our R&D. The second challenge is the cost pressure brought about by fierce competition. Our own branded companies, the procurement of vehicle parts and components, and a new car dealer, are reducing their prices every year after they are listed. These companies also reduce their annual prices by 2% to 3%. %, is a clear goal, the purchase price of parts and components must also be reduced, this pressure on our business is very large, probably from 2004 onwards for so many years, each year is pushing down the purchase price, which is a pressure. On the other hand, our labor costs are on the rise, land costs are rising, and steel prices are rising. It is very difficult for parts and components companies. The rising purchase price is also a challenge for us. The third is the pressure brought about by too rapid policy standards. Our own technical standards are improving, and environmental protection standards have been raised. O1, O2, O3, and O4 standards have been used. After this standard was raised, we did Comparing comparative images, the higher the technical standards are raised, the greater the pressure on our own branded companies. This is an inverse relationship.
Reorganization demand for auto parts industry is more urgent than vehicle
When it comes to countermeasures, it is a big consideration. We are now in this position. The scale is relatively small, and it is also relatively weak. How do we go from a weak and a small place to a big, strong one? From weak to strong, from strong to big, and from small to large, from big to strong, I personally think that our parts and components companies should go this route, first do the scale up, with scale everything is good To do so is to pass the quality, the price must be competitive. Going along this route will be able to continue to maintain the cost advantage, increase the overall level, and gradually achieve great results. This is a strategic ideology. I think this road is impracticable, that is, it is very small. Very strong, this is very difficult. Parts require you to lower prices, to improve quality, which depends on the scale, no scale can not be resolved. One of the bigger companies is their own efforts. The second is to use both the domestic and international markets. The third, I think the government wants to promote mergers and reorganizations. I think the focus of our merger and reorganization is on the vehicle companies. In fact, I feel zero. The reorganization of parts companies is more urgent and necessary than the whole vehicle. This is critical. If there aren’t any large parts companies, the scale will be small, the costs will not come, and the quality will not go. It is very difficult for the development of the whole vehicle, but we are now focusing on the whole vehicle, so I think the parts companies are also It should promote this merger and reorganization and give certain policy support. Strengthening is also a consideration. First, improve quality, and then improve performance. Now it includes vehicle companies, component companies, and especially vehicles. Everyone is very enthusiastic about improving performance, but improving quality seems to feel more difficult. In fact, when a consumer buys a car, a car with a self-owned brand of 50,000 yuan can be tolerated in terms of performance and workmanship. However, reliability and quality cannot be tolerated. Therefore, the most pressing issue is to improve the quality and the performance can be improved. Gradual improvement, so that it matches the needs of consumers. Japanese and South Korean companies are basically the way to go after the auto country. South Korea and Japan have not invested a lot of energy in technology for a long time, but they are very demanding on the quality improvement. Both car companies and component companies should pay high attention to quality.
In general, I think our opportunities are greater than challenges. The most favorable key factor is high growth. As long as we implement correct policies and countermeasures, we will certainly be able to grow up with a group of outstanding and powerful independent brands. Thank you all. !
Pioneer Automation Instrument Co., Ltd. , http://www.lnvalves.com