Where to go From here to the end

Recently, Zhengxing Group announced that it has officially signed a memorandum of understanding with China National Heavy Duty Truck, the two sides will establish a strategic partnership, Zhengxing Group and China National Heavy Duty Truck will jointly develop a variety of new steel and aluminum wheels.

In recent years, the cooperation between commercial vehicle vehicle companies and parts and components companies has become more in-depth. Signing memoranda of understanding, establishing strategic partnerships, and collaborating on the development of new products have made frequent reports. Does this mean that the zero-zero relationship in the commercial vehicle industry is no longer a simple “dependent” master-slave relationship, but rather a development towards closer collaboration?

Catch survival "entire" stronger "zero" weaker?

"The current zero-to-zero relationship has not improved much. Most of the parts and components companies are living in the cracks." Liu Gaoxiang, chairman of Yuyao Sengao Automotive Instrument Co., Ltd., told reporters.

“The economic situation in 2011 was not good, and it was even more difficult in the second half. There were many small parts and components companies that had closed down here. Now the spare parts companies are all losing money,” Liu Gaoxiang said. According to reports, the market situation is not good enough to cause the entire vehicle to fail to sell, and the matching price will not only fail to increase, but will continue to decrease. However, the cost of manpower and raw materials for parts and components companies will continue to increase.

“In 2011, the company’s wage costs increased by 20%, while the raw material costs increased by 5% to 10%. The OEMs are still keeping their prices down, and they need to be adjusted almost once a month.” Liu Gaoxiang said: “The company can now sustain it. , but lose money every month."

Survival in the gap is not only a problem in the OEM's price reduction. The early Steyr system supported many spare parts companies. Although the right to speak is small, parts companies that depend on vehicle companies can also survive well. Nowadays, most of the parts and components companies are attacked by foreign brands and counterfeit manufacturers.

With the improvement of the openness of the domestic market and the increasing importance of foreign brands to the Chinese market, foreign brands are competing to enter the domestic market. The change in spending power allows users to no longer simply focus on price, but give the brand more attention. The increase in the technological content of commercial vehicles also places high demands on the technical level of parts and components.

"The OEM will also lower prices for foreign brands, but it is not so rampant," said Liu Gaoxiang. He told reporters that the quality of domestic brands is comparable to foreign brands, and even better, but the prices are much lower than foreign brands.

“The price of domestic brands has been very severely compressed, and the price range is between 30% and 40%.” Liu Gaoxiang said: “This is the brand effect. If a host plant uses a foreign brand of parts, the vehicle can be said to have problems. It is not the responsibility of the main engine plant. The use of domestic components is the responsibility of the manufacturer."

A group of small enterprises that are not regulated do not seek a brand to seek profits, and gain profits through low-cost counterfeiting, which has a great impact on the auto parts market. This further squeezed the spare parts company's living space.

In addition to this, whether it is guaranteeing supply, improving the self-preparation rate of parts and components, pursuing better product compatibility, or improving the strength of the entire vehicle company, pursuing the need for product differentiation and individualization, or the needs of companies and localities. With the promotion of multiple benefits, such as the government, the self-built parts and components system of the vehicle manufacturers has become increasingly fierce. This has also further reduced the market share of parts and components companies from the side.

“In addition to a few large-scale enterprises, most of the parts and components enterprises are small and medium-sized enterprises, and the country’s policy support is also very small.” Liu Gaoxiang added: “A lot of small businesses cannot continue to collapse. We are also considering transformation. Go to other industries."

Using strength to speak "all" strong "zero" is also strong?

However, Chi Minjie, chief engineer of Longkou Zhongyu Machinery Co., Ltd., did not agree with this: “In the past few years, the OEMs felt that domestic products were not as good as foreign products, and domestic companies did not have the right to speak. However, after several years of market inspection, it was proved that domestic The company's products are comparable to foreign brands, and the voice of parts and components companies is significantly improved."

Chi Minjie believes that in 2011, the market is in a bad situation, the sales of automakers are declining, and parts and components companies are naturally affected. Small and medium-sized component companies are even more affected.

Chi Minjie also believes that the cost of the main engine plant is rising and the profit has been reduced. The depressive price phenomenon must exist. This is the relationship between customers and suppliers. It is a game between supply and demand. "Profits are falling, and profits are going to fall. We have to make some profits to the OEMs," Chi Minjie said.

"But the key depends on the product. If the product quality and product application are more advanced, there is no such problem." Chi Minjie told reporters. It is understood that Longkou Zhongyu Machinery Co., Ltd. and the auto manufacturer are still negotiating prices at the end of each year according to the usual practice. Frequent price reductions are not obvious.

From another perspective, the strength of foreign brands has also become a favorable condition for domestic brands to win the right to speak. Under the premise of comparable product quality, foreign brands will directly bring ready-made products to the domestic market. There is no cost advantage, and OEMs must also pay more attention to product matching. At the same time, domestic products have more advantages in service and can better meet the needs of users.

"The premise is that the product must be good, practical, and have a certain competitive advantage compared with foreign brands." Chi Minjie told reporters: "Maybe in the introduction of new technologies, because foreign technology development is faster than domestic, foreign brands will initially occupy Dominant, such as post-processing systems, etc. However, with the need to reduce costs, these technologies will inevitably be made domestically, and after the quality of domestic products comes up, the advantages will gradually emerge."

With the improvement of vehicle technology level and technological content, there is a need for more technical convergence and penetration of R&D systems between zero-slot companies, and closer cooperation is needed. “Now the relationship between OEMs and parts factories is closer, and cooperation is generally enhanced through strategic cooperation or signing agreements. We are doing this work,” Chi Minjie told reporters.

Parts companies are still at a disadvantage as a whole

Then, is there a balance in the domestic zero-swath relationship or is it stronger? “In addition to several domestic parts and components companies such as Yuchai, Weichai, Fast, Hande, and Wanxiang Transmission, most of the components The survival of enterprises is extremely difficult, said Tan Xiuqing, vice president of Shandong Heavy Industry Group Co., Ltd. He believes that companies such as Weichai, Yuchai, and Fast have started earlier and have a larger market share. This part of the first part of the development of the parts and components companies in the zero relationship has a certain right to speak, can negotiate with the vehicle manufacturer, the source of its profits and follow-up R & D investment can be guaranteed.

"The survival of these companies is no problem, but it can be said to be rare." Tan Xiuqing is very worried about the future of the parts industry: "The vast majority of parts and components companies do not have the core technology, that is, a simple copy, a lot of bankruptcies in 2011 , it will be more and more."

As international parts brands enter the domestic market more and more deeply, they will swallow more shares. At present, the real core components are almost all of the world's brands. Taking the heart of the vehicle, the engine, as an example, its core components include control systems, fuel injection systems, and engine aftertreatment systems. These areas are dominated by companies such as Bosch, Denso, and Delphi.

In addition, in recent years, more and more OEMs have put their cabs in locations such as Germany, Italy and Japan. “For another example, the interior of the cab is mostly Visteon in the United States, Bell in Germany is used for air conditioning, and the ABS system is Knorr and WABCO.” Tan Xiuqing explained: “The supercharger is also a very important component. Before I went Shandong Kangyue Technology Company has seen that their products are doing well, mainly for Weichai. However, the proportion of international brands such as Honeywell or Honeynite is increasing gradually."

The increase in the use of parts for international brands by OEMs will inevitably lead to an increase in the cost of the entire vehicle, and this part of the cost pressure will be transferred to domestic parts and components companies. “Domestic OEMs do not care about taking the parts factory. It can be said that they are squeezing and exploiting them. Parts factories are being forced to die by the main plant.” Some industry insiders describe the miserable situation of some parts and components companies.

“Each year, the parts and components bidding held by automakers is actually low in price and high in share.” According to informed sources, “The prices of foreign and domestic products used by OEMs vary greatly, and profits make foreign products available. Earn it."

“Although many voices in the industry have appealed to pay attention to this phenomenon, the state has also proposed to support component companies. But so far, except for a few companies such as Weichai, Yuchai, and Fast, the other companies have not benefited. There is also little policy support," Tan Xiuqing told reporters.

The upgrading of technology is more difficult and requires more investment. In order to pass on cost pressures, OEMs continue to reduce the profits of domestic parts and components companies, coupled with the lack of policy support, the domestic spare parts companies have smaller and smaller living space, unable to invest funds to enhance technology. , Foreign brands can continue to develop R&D through the profits they have obtained in the country. This formed a vicious circle, resulting in an increasingly wide gap between domestic parts companies and foreign brands, and a decreasing market share.

“This is terrible. In the future, core technologies must be monopolized by foreign countries.” Tan Xiuqing exclaimed: “The industry is currently unfair to parts and components manufacturers and will continue to suffer major losses.”

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