Chinese Auto Parts Industry Development Status And Competitive Advantage

In recent years, electric drive, intelligent network and other new technologies have emerged and integrated development, and the auto parts industry has ushered in a new opportunity for transformation and upgrading. The core competitiveness of many enterprises has been significantly improved, but also gives many auto parts enterprises the opportunity to overtake on the corner.

Chinese auto parts industry development status and competitive advantage

The performance of auto parts companies in 2022 was polarized. On the one hand, benefiting from the development opportunities of the industry, new-energy vehicle-related parts companies developed well; On the other hand, the competitive advantage of leading enterprises is more prominent, which promotes the differentiation of industry performance.

According to the China Research Institute of Industry estimates, from 2021 to 2025, China's auto parts market size will maintain a stable growth trend, 2025 market size will reach 6.79 trillion yuan.

Lin Shi, deputy secretary-general of the Intelligent Network Committee of China Communications Industry Association, believes that the rapid increase in the penetration rate of new energy vehicles, the demand for auto parts will expand, and the boom trend of the new energy vehicle industry chain will continue. Benefiting from the rise of independent brands, domestic auto parts suppliers are accelerating the layout of the new energy vehicle industry chain, gradually building local supply chain advantages, ushering in a golden era.

In the future, the auto parts market is bound to face more intense competition, small and medium-sized enterprises with lower product technology content and poor scale effect may be eliminated at an accelerated pace, the industry differentiation will be further intensified, and the industry concentration is expected to be continuously improved.

Current state of the global auto parts industry

The supply chain of auto parts is formed from "parts → components → components → system → assembly" to form a pyramid supporting system. Under the mature auto industry chain system, vehicle enterprises are fully engaged in model development and design, vehicle assembly and terminal brand management, and parts enterprises are responsible for the modular and systematic development, design and manufacturing of parts. Auto parts suppliers are usually divided into Tier 1, Tier 2 and Tier 3 suppliers. A pyramidal industrial chain structure is formed between auto manufacturers and auto parts suppliers.

Due to the impact of the global pandemic, coupled with macro factors such as continued slowing economic growth and escalating trade frictions, the global auto parts industry is facing the pressure of transformation. AutomotiveNews released its 2021 Global Top 100 auto parts Suppliers list based on their 2020 auto parts revenue, and Germany's Bosch ranked No. 1. The top 10 suppliers did not change, but just switched positions. In terms of the revenue of auto supporting businesses of major companies in 2020, most of the top 100 companies experienced a decline in revenue in 2020 due to the impact of the global pandemic.

After long-term development, the auto parts industry in developed countries has been characterized by large scale, strong technical force, sufficient capital strength, high industrial concentration and global synchronization and supporting facilities. The industry has emerged a number of German Bosch, Japan's Denso, Germany's ZF, Canada's Magna and other companies as representatives of the sales revenue of more than 10 billion dollars of world famous auto parts enterprises. These internationally renowned auto parts enterprises have strong economic strength and research and development strength, leading the development direction of the world's auto parts industry. The top 10 companies are dominated by traditional component giants, while the top five have fluctuated.

In the international auto parts market, multinational auto parts giants such as Everheart, ZF and JATCO in the transmission field, Bentler in the car chassis field, Bosch and Continental in the body stability system and braking system, Johnson Controls, Lear Group and Faugia in the car seat field have all formed a monopoly position respectively. And controls the core technology of the global auto parts industry.

According to the "2023-2028 edition of the Automotive parts Industry Government Strategic Management and Regional Development Strategy Research Consulting Report", China Research Institute Priceprice Research Institute shows:

As for the export of auto parts, with the development of the globalization trend of auto parts procurement, our auto parts industry is facing a single customer and a single market, increasing the export of auto parts products.

Chinese auto parts export trade

At present, our auto parts export trade has basically covered the major countries and regions in the world. With the continuous improvement of Chinese automobile parts manufacturing level in the past 10 years, Chinese automobile parts export trade has established a basic pattern of mainly developed countries and supplemented by emerging markets and subdeveloped countries. In recent years, the total export of Chinese auto parts enterprises has been rising. China's exports of auto parts reached $75.6 billion in 2021, up 33.7 percent year on year, according to the General Administration of Customs.

In terms of automobile parts import, the main parts imported in our country are the key parts of high-end automotive electronic systems and transmissions that do not have manufacturing capabilities in the country. The import of such key auto parts is greatly affected by the international situation and tariffs, and the import amount fluctuates greatly in recent years. Affected by the initial outbreak of the novel coronavirus, the import and export scale of China's auto parts showed a downward trend, but with the international epidemic control and effective control of the novel coronavirus, the import and export scale of China's auto parts showed a rapid rebound. China imported 37.6 billion U.S. dollars of auto parts in 2021, up 15.9 percent year on year, according to the General Administration of Customs.

The retail sales volume of automobiles in 2022 was 20.5443 million

At the end of last year, the heat of the car market picked up significantly. The latest retail sales data of the Automobile Market Research Branch of the China Automobile Dealers Association showed that the total retail sales of the whole year in 2022 was 20.5443 million, with a year-on-year growth of 1.9%.

It is worth noting that the retail sales of fuel vehicles were 14.868 million units, a decrease of 2.302 million units year-on-year; New energy retail sales totaled 5.674 million units, a net increase of 2.687 million units year-on-year. In contrast, whether it is due to the promotion of various policies or the increasing support of people's environmental protection concept, it seems that fuel cars are losing consumers and have been flowing to new energy sources. This shows that in terms of automobile consumption, Chinese people's consumption cognition has changed. People's rejection, questioning and other resistance to new energy vehicles have gradually disappeared, but are accepting new modes of transportation at an astonishing speed.

In addition, the recognition of the brand, has also taken place earth-shaking changes. In the comprehensive ranking of manufacturers' sales from January to December 2022, the era of "Volkswagen + GM" dominating the list has passed. Instead, BYD, the domestic leader, leads the manufacturers' retail list with a significant difference.

Especially in the field of new energy, from the annual data ranking in 2022, BYD achieved 1,799,947 cars, a year-on-year increase of 208.2%. Saic GM-Wuling was second, with sales of 442,118 vehicles, up 2.5 per cent from a year earlier. Tesla China fell to third place, with sales of 439,770 vehicles, up 37.1% year on year. Among the Top15, domestic brands dominate the list in overwhelming numbers.

New force car companies in January sales collective cold

As of February 2, BYD, Nextev, Ideal, Xiaopong, Krypton and other car companies disclosed January sales. Affected by the Spring Festival holiday and other factors, the superimposed "state subsidy" of new energy vehicles was withdrawn at the end of 2022, and part of the demand was overdrawn in advance. In January 2023, the sales volume of new energy vehicles fell significantly month-on-month. Among them, zero run sales decreased 87%, Xiaopeng sales decreased 54%.

Industry insiders said that with the withdrawal of "state subsidies", local subsidies or become the dominant stimulus of new energy vehicle consumption. At the same time, the price reduction of new energy vehicle enterprises will drive the growth of terminal sales.

Sales of traditional car companies such as BYD and GaC Aean as well as new car companies such as "Wei Xiaoli" fell month-on-month in January. From the new power of car building camp, "Wei Xiao Li" into "Li Wei Xiao".

In January, Ideal delivered 15,141 cars, down 29% from the previous month, outselling Nio and Xiaopeng combined. Nio delivered 8,506 units and Xiaopang 5,218 units, down 46 percent and 54 percent from the previous month.

Nezha delivered 6,016 vehicles, down 22.8 percent from the previous month, surpassing Xiaopang to take third place on the New Power delivery list. Nezha was the New Power sales champion in 2022.

In addition, the sales volume of new energy vehicles in January reached 4,885, down 70.6% month-on-month and up 38.78% year on year.

Polar krypton and zero run slide is more obvious. A total of 1,139 cars were delivered in January, down 86.6 percent month-on-month and 85.9 percent year-on-year. Krypton delivered 3,116 vehicles in January, down 11.7 percent year-on-year and 72.5 percent month-on-month. Polar Krypton said its smart factory resumed work on February 1 after a 21-day suspension for upgrades.

In terms of traditional car enterprises, BYD and GaC Aean still maintain strong competitiveness. In January, BYD sold 151,300 new energy vehicles, down 35.7 percent month-on-month and up 62.4 percent year on year. According to the passenger federation forecast data, January new energy vehicle retail 360,000 units. Byd has more than 40% of the market.

In addition, GAC Aean sales in January still more than 10, 206 units, down 66% month on month.

For January new energy vehicle sales fell month-on-month, industry insiders said that, affected by the decline of subsidies and the Spring Festival holiday, the overall data of new energy vehicle sales in January was weaker than the normal performance, but still optimistic.

As for the reasons for the large month-on-month decline in January sales, Cui Dongshu, secretary general of the Federation, said that the growth of new energy vehicle sales has reached a bottleneck stage. Early, the price of new energy models is too much, fewer orders. As leading companies such as Tesla cut prices, consumers are in a wait-and-see mood.

Industry insiders said that Tesla, Xiaopeng, Ceris and other car companies adopt the "price for volume" model, which is expected to further boost sales in February.

According to an official of the company, the price of some models of the company reached 30,000 yuan in January. As the campaign has continued, orders for AITO's series of models have grown steadily.

On February 2, Nio announced a price reduction promotion, with the 2022 ES6 and ES8 dropping by up to 100,000 yuan. A salesman at Nio's direct store in Beijing told the China Securities Journal, "The campaign will start from February 1, but there will be fewer cars with a discount of 100,000 yuan. ES6 and ES8 naked models of the preferential intensity of 50,000 to 60,000 yuan, 70,000 yuan, the more options, the more preferential price." The sales staff admitted that this move is mainly to boost sales.

"2023-2028 edition of auto parts industry government strategic Management and regional development strategy Research Consulting Report" is written by China Research Institute Puhua Research Institute. This report analyzes the supply and demand situation of the industry, development status, industry development changes and so on, focusing on the analysis of the industry's development status, how to face the development challenges of the industry, industry development suggestions, industry competitiveness. And industry investment analysis and trend forecast and so on. The report also synthesizes the overall development trends of the industry and provides reference suggestions and specific solutions for the industry in terms of products.

Source: China Research Network