China's auto parts industry market analysis in 2017

Hits:Updated:2018-04-28 16:04:31【Print】

In 2017, the automotive industry developed steadily. Existing auto purchases take a long time and gradually exceed the insurance deadline. The number of “off-guarantee” autos continues to increase. The achievements and problems of China's auto parts enterprises coexist, and the issue of “small, weak, scattered” in both corporate scale and brand promotion remains prominent.
1 The development space of China's auto market is vast
Relevant data show that in 2016 China's auto production was 28.19 million. Driven by the increase in residents' automobile consumption demand, the improvement of urban public transport facilities, and the release of engineering construction vehicles, China’s auto output has maintained rapid growth, ranking first in the world for eight consecutive years. By the first half of 2017, China’s auto production stood at 13.97 million vehicles, an increase of 6.34% year-on-year. Although the growth rate has slowed down in the past five years, with the strong support of national policies for new energy vehicles and the rapid development of the sharing economy, the number of Chinese cars will continue to climb.
China is in the stage of rapid development of urbanization. The income level of domestic residents continues to rise, and the quality of life continues to improve. People's demand for car purchases is gradually becoming more prominent. Therefore, there is still a large demand for cars in the future. At present, the frequency of changeover of domestic family-owned passenger vehicles is generally concentrated in 3-6 years, so the age of vehicles is concentrated in less than 6 years, and the proportion of vehicles with a vehicle age of less than 3 years is as high as 25%. With the acceleration of the speed of new automotive product renewal, people will purchase new automotive products in advance when the vehicle does not reach the corresponding retirement period, which will lead to the shortening of the replacement cycle of automobiles, which will lead to the improvement of demand for some of the automobiles; The technologies such as design and manufacturing have been greatly improved and can provide the market with cost-effective automotive products. As a result, domestically-produced automobiles are increasingly favored by the international market. Based on the above factors, China's auto market will continue to grow steadily in the future. According to the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Science and Technology issued in April 2017, the “Long-Term Development Plan for the Automotive Industry”, it is expected to reach 30 million by 2020. About 30,500 vehicles will reach about 35 million vehicles in 2025.
With the rapid development of China's auto industry, China’s auto ownership has also increased year by year. According to statistics, China’s auto ownership exceeded 200 million at the end of 2017. However, China’s population base is huge. Compared with mature international markets, the level of per capita car ownership is still relatively low. In 2016, the number of thousands of cars in China was 140 vehicles/thousand, and the world average reached 182 in 2015. Thousands of people have a larger gap than developed countries such as the United States, Japan, Germany, the United Kingdom, and South Korea. Two years ago, the United States reached 821 cars/thousand, and South Korea also reached 417 cars/thousand.
At present, the number of vehicles owned by thousands of people in China is only equivalent to that of Japan in the 1960s and 1980s, and is below the world average. As the world’s largest automobile production and sales country, driven by the continuous progress of urbanization in China and the continuous improvement of people’s living standards, the domestic automobile market in the future is still facing a broad development prospect. Even with the target of South Korea’s per capita ownership, China’s There is room for development of nearly 300 vehicles/thousand people, and the market demand is still huge, which leads to the continued growth of domestic automobile production and sales.
2 The “small, weak, scattered” problem of parts and components companies is highlighted
Ma Ligang, Vice Minister of the China Automotive Engineering Society's Parts Department, pointed out at the 2017G20 annual meeting held in Nanjing and the parts and components industry development summit under the new situation that after years of development, the scale of China's spare parts industry has continued to grow, and research and development capabilities have been continuously improved. The production quality of parts and components of some enterprises has approached the international advanced level.
However, there are still outstanding problems in the development of the auto parts industry.
01 The problem of "small, weak and scattered" is still significant
The number of China's parts and components industry-wide industry is conservatively estimated at more than 100,000, but most of the companies are concentrated in the low-end, low-value-added areas, the product quality is not high, innovation ability is not strong, homogenous low-cost competition is common, and operation management is extensive.
02 The problem of the foreignization of high-end parts is becoming increasingly prominent
Foreign-funded parts and components companies rely on their own advantages to focus on high-end, high-value-added markets to seize their share and accelerate their expansion in China, while Chinese branded parts and components companies mainly compete in the low-end market.
03 The Core Competence of China's Parts Enterprises Needs to be Improved
China's spare parts enterprises still have large gaps in R&D facilities, management, and talents. Many key component core technologies are in the hands of foreign-funded enterprises.
04 The zero-sum partnership needs to be improved
In the zero-sum cooperation model, it is necessary to promote the efficient and coordinated development of the entire industry chain. Establish a strategic alliance and build a mutually beneficial cooperation mechanism for decree-making enterprises. At the same time, zero-strength collaboration to open up overseas markets, enhance the strength of zero-zero companies. Of course, we must systematically sort out the parts and components business of the entire vehicle group so that we can do something and do something wrong. Efforts to enhance corporate capabilities, face the market, independent management.

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