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"The track of the development of China's auto industry in recent years has also fully proved that the parts and components industry is no longer an industry affiliated to the entire vehicle. It already has the conditions and ability to develop into an independent industry. Therefore, the establishment of an industry organization of its own. Not only is it necessary but also imperative.†This was a recent interview with the general manager of the Beijing Automotive Industry Group Co., Ltd. and the auto parts industry Shi Hongshi, who left a deep impression on the reporter.
In the past two years, China’s auto parts industry has experienced unprecedented development. In the face of historical opportunities and intricate international competition, where are our parts and components companies going? How relevant departments and agencies can guide companies to participate in competition and embark on the track of healthy development? Does the auto parts industry need an independent industry organization? This series of issues should be mentioned by the relevant departments on the agenda.
Reporter: First of all, please give an assessment of the living environment of China's auto parts companies.
Shi Hong: First of all, I would like to point out that, as a world-class product, the automobile is at the forefront of global economic integration. Its main performance is the strong global alliance among automotive multinational corporations, asset restructuring, and joint product development. The interaction between the integrated procurement and sales service network has further reduced costs, expanded the scale of production and improved the overall competitiveness. The competitive advantage of auto multinationals in China is emerging.
The spare parts companies that have been separated from the old car companies are gradually forming a global professional spare parts group. They have used their advantages in product development and interaction with vehicle companies, and have formed a competitive advantage in system development and modular supply. Under the pattern of major adjustments in the structure of the auto industry, it has spawned a global purchasing business model.
Under the above background, local Chinese parts and components companies are restricted by the different product standards and management systems of multinational corporations such as Germany, the United States, Japan and South Korea, and it is very difficult to directly enter the procurement system of multinational corporations. Therefore, starting from joint ventures and cooperation, starting from the second matching, starting with the reorganization of assets, mergers and acquisitions to start a difficult exploration. Due to the lack of national standards for auto parts products that adapt to China's national conditions, local Chinese parts and components companies lost their right to speak when they met the product standards of multinational companies. In the process of integration into the global economy, Chinese domestic parts and components companies face enormous barriers to their survival and expansion.
As China enters the WTO's post-transition period, the market will be fully open to the outside world. China's auto parts market is characterized by rapid development, large market capacity, and the gathering of international giants. Its auto parts companies have fully placed themselves in the competitive environment of international auto parts and components.
Compared with mature market economies, China's auto parts companies still need to gradually improve their living environment.
Reporter: You made early on that auto parts have become an independent industry and should have their own corresponding organization. What is your comment on this now?
Shi Hong: In the automotive industry, vehicle companies and parts and components companies are complementary and indispensable components. Components are the basis of the vehicle. From the perspective of technological progress, the technical level of parts determines the technical level of the vehicle and reflects the value of the vehicle. Due to historical reasons, in our country's auto industry, the situation is exactly the opposite. Parts companies can only chase the entire vehicle company and become the sustenance of the entire vehicle company. Especially after most of the vehicle industry was controlled by multinational corporations and China lost its right to speak, Chinese auto parts companies, especially the old state-owned enterprises that are the backbone of this industry, even lost their status. Some even reached the point where they were desperate. The living space is also getting smaller and smaller.
In the past two years, due to changes in the procurement of supporting rules, coupled with the increase in raw material prices and vehicle prices, parts and components companies have been unbearable, unsustainable, the contradiction between the entire vehicle and parts and components companies to the imminent The trend. In the near term, the parts and components companies tried to adopt a variety of methods and strive to obtain a platform for equal dialogue with vehicle companies. However, due to the inconsistency of "industry status", this dialogue has not made substantial progress. Also at this time, the parts and components companies found themselves in a distorted and embarrassing position in the auto industry. Even the industry organizations were the vassals of the entire vehicle industry organization, and they did not send out their real voice at all.
The old minister of the Ministry of Machinery Industry, Shao Qihui, pointed out two years ago that auto parts can be relatively independent of the auto industry and gradually develop into a separate industry. The development process of the automobile industry has made the industrialization of auto parts become inevitable.
Reporter: From the market point of view, how to understand the establishment of auto parts industry is imperative? Are some of our current organizations not also performing this function?
Shi Hong: The socialization of the parts and components system of large auto companies such as FAW Fool and Dongfeng Parts and Components, and the healthy development of independent parts and components companies have made it clear that Chinese auto parts companies have become market-oriented. Twenty years of reform and opening up and the transition period of China's accession to the WTO have made China's auto parts and components market internationalized.
It is a common practice in the international market to use market-oriented methods to solve practical problems in business operations. The establishment of the China Automobile Parts Manufacturers Association to solve the current high-speed development of multinational companies and the long-term development of China's auto parts industry, requires real self-regulatory organizations in the industry.
China's auto parts companies are affiliated with multiple organizations and management. Many of the automotive industry's organizations are mainly vehicle manufacturers. At present, the industry organizations that truly represent the interests of the industry and auto parts manufacturing industry have not.
In Japan, the Auto Parts Manufacturers Association is completely independent. In the United States, Germany and other developed countries, its related associations are more developed. Since the development of history, Chinese companies have begun to fully integrate into the international market. It has become imperative to manage the industry with internationally accepted rules. China's auto parts manufacturing industry needs its own association organization.
Reporter: Please talk about some specific suggestions and ideas.
Shi Hong: China's auto parts manufacturing industry should have its own association organization. It is imperative to establish an independent "China Automobile Parts Manufacturers Association." If there is a strong industry organization, we can make full use of the period of national development opportunities and create a development environment according to the needs of the enterprise. For example: in accordance with the survival needs of enterprises, create a market environment for peaceful coexistence and harmonious development; in accordance with the security needs of enterprises, Acquire information, grasp the market and technological trends; according to the needs of the company's improvement, give full play to the advantages of associations and other organizations, conduct industry exchanges, and go global, please come in.
The specific recommendations in the near future were to select an appropriate time to convene an enterprise forum for China's auto parts manufacturing industry, and listen to representatives of some major companies in the industry on the current understanding of the development of auto parts manufacturing industry and their attitude toward establishing their own independent industry organization.
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