China's auto parts gap in Latin America and abroad

The gap between China's auto parts industry, which was won at a low price and simply copied, has not narrowed the gap with the foreign auto parts industry. Instead, it is widening. In the fierce defeat of the market-for-technology model, China needs to accelerate the transformation of the automobile industry. The transformation is risky, but it also brings great opportunities. Transformation is another model of competition.

As China's auto industry continues to grow, the auto parts industry continues to improve. However, in the areas of key components with high technological content, such as EMS engine control systems, airbags, ABS systems and other systems and components, the competitiveness of local parts and components companies is still not strong.

The survey shows that China’s auto parts companies’ R&D investment currently accounts for only 1.4% of sales revenue, far below the average of 5% for multinational companies. Due to the low level of research and development, there is no independent brand, and it is only possible to imitate the production of other people's products. As a result, domestic parts and components companies do not have the right to speak in the market and they are vulnerable to vehicle companies.

Practically speaking, the development of multinational corporations in China has now shifted from merely pushing products, propagating brands to pushing practical technologies, and moving from purely supporting vehicles to marketing designs, and entering a new strategic stage. This makes long-term adherence to vehicle companies, and the challenges facing China's auto parts industry, which are obviously at a disadvantage, such as capital, technology, management, and research and development, are even more severe.

The autonomous zero automotive parts industry faces challenges. Xu Changming, director of the Information Resources Development Department of the National Information Center, believes that, first of all, with the constant rise in factor prices, the cost advantage of independent components is being weakened, and foreign-funded parts companies rely on the advantages of scale and the localization of R&D to create a clear cost advantage. Secondly, standards for energy conservation and environmental protection have been tightened and regulations tightened, bringing double pressure on technology and costs to independent components and parts. Third, the popularity of modular production and simultaneous development has brought higher and higher technical barriers to autonomous parts and components.

Without first-class automotive parts technology, it is impossible to build a first-class vehicle. In the entire automotive industry chain, auto parts have a one-third share, especially the profits of high-end parts and components are even higher than that of the entire vehicle company. If auto parts technology is improved and independent innovation results are significant, then vehicle technology will also develop simultaneously.