"All of the production capacity is seriously over-abundant, and companies continue to build new plants like this. The prospect of this industry is hard to say." At the “Seminar on Cross-strait Wheel Industry Innovation†held in Liyang, Jiangsu, when other CEOs were happily visiting the “wheel hub industrial park†in Xiangyang Development Zone, a veteran from an equipment manufacturing company told reporters. Express your worries. The boss's concern comes from the status quo of the development of the automotive wheel industry. Aluminum wheels are a kind of material-intensive and labor-intensive low value-added products. Aluminum casting is also a polluting and energy-consuming industry. At present, this industry is gradually shifting to third-world countries. China has now become a big producer of aluminum wheels, but the industry concentration is low and there is a serious excess of low-end production capacity. The current situation of overcapacity does not seem to prevent many companies from investing in aluminum wheels. The reporters exchanged views with the bosses at the seminar and found that most people have the idea of ​​expanding their production capacity. Some of these companies are targeting high-end markets. Some companies intend to continue to invest in ordinary products. Some equipment manufacturers are also expanding their investment; some have only tens of millions of dollars in investment, and some have more than one billion yuan in investment. . According to Wang Xiaodong, deputy secretary-general of the Wheels Committee of the China Association of Automobile Manufacturers, at present, the number of automobile wheels produced each year exceeds 200 million. Even if the steel wheels used by trucks are not included, the production of aluminum wheels also greatly exceeds the use of automobiles. The result of overcapacity is that there are more and more companies entering this field, and the degree of industry concentration is very low, causing companies to rely on the current situation of vicious competition in price competition. One side is fierce market competition. On the other side, many companies are still building plants to expand production. Under the circumstances of serious excess production capacity of aluminum wheels, why do we all compete for capacity? According to Chen Rihong, chairman of Hubei Dongtai Aluminum Wheels Co., Ltd., there are issues of marginal cost and marginal benefits. More than 60% of the cost of aluminum wheels are aluminum ingots, and the raw materials account for a large amount of money. Coupled with the time required for the 3-4 months of repayment, the working capital and initial investment are both large. However, wheel companies usually occupy the market with price advantages. To achieve a certain scale, they can offset the fixed costs. Therefore, companies must absorb costs by increasing production capacity and scale. “This also allows the company to embark on a path that cannot survive without expanding production capacity.†Chen Rihong concluded. The opinion of an industry insider is that the status of the aluminum wheel industry basically reflects the overall status quo of the Chinese auto parts industry. In fact, many raw materials and labor-intensive products are similar to this one. On the one hand, they call for excess production capacity. On the other hand, they continue to invest in expanding production capacity, which has led to the entire industry entering a vicious circle of vicious competition. “This is mainly caused by market factors, but it also shows that the role of policy guidance is not in place,†said the person. Healthy Care,Hydrated Silica In Toothpaste,Silica For Sensitive Teeth,Improves The Feel And Texture Henan Minmetals East New Materials CO. LTD. , https://www.materials-silicon.com
Heavy domestic aluminum wheel production capacity is still excessively expanding