In the past few years, the monopolistic wave of one-sided parts companies began to return. On June 5, 2014, Li Jingcheng, Deputy General Manager of Faurecia China stated that the next step will be to promote the development of the Chinese market through joint ventures.
Before this, Johnson Controls and Yanfeng Automotive Trim Systems Co., Ltd., a wholly-owned subsidiary of Huayu Automotive, a subsidiary of SAIC, signed an agreement to jointly establish a global joint venture for automotive interiors. In early May, BAIC Group just formed a joint venture with Siemens to establish Beijing Siemens Automotive Electric Drive System Co., Ltd.
The National Development and Reform Commission officially canceled the share-ratio restrictions on foreign-invested parts and components in the 2004 edition of the "Automobile Industry Development Policy." In the past decade, the strategy of multinational automobile companies in China has undergone new changes. Foreign-funded parts and components factories in China are mainly controlled or wholly-owned, and are rarely willing to joint ventures. Geely Automobile CEO Chen Wenkai said that this also led to high-tech and core technologies, such as automotive electronics and engine parts and other key areas, foreign-controlled market share of up to 90%.
Although auto parts companies represented by Foglia, Johnson, and Siemens are leading a new round of joint venture returns, it is generally believed in the industry that joint ventures are still not a major trend, but only a small part of the wave of spare parts. The choice to return to the joint venture mode is only because these multinational companies hope to use the joint venture to obtain the market, and the competitive and competitive parts and components companies that have mastered the mainstream technology still choose to expand their own capital.
Most of the joint venture is to gain market strategy <br> <br> multinational auto parts enterprises to find the object is a joint venture vehicle assembly plant. Our goal is to achieve maximum development. Li Jingcheng stated that in the Chinese market, Faurecia has formulated a new round of development plans. Foggia's current main business is in Europe, accounting for more than 50% of the total business volume. In the future, the Asian market will be from the current 13%. Increased to 15%-20%, the number of factories in China by 2018 will be expanded from the current 27 to 55.
Foreign-funded parts and components companies must protect their core technologies from leakage, in order to maintain their technological advancement, but at the same time they must also consider the market's expansion needs. In the end, they will combine the two to find a balanced approach. Chen Wenkai thinks.
Foglia’s choice of joint ventures is largely related to its business scope. Foglia has four major business segments: car seats, emission control technology, automotive interiors and automotive exteriors. The current part of the joint venture mainly focuses on the business of car seats and automotive interiors. These two services are relatively more dependent on the OEM. A joint venture is a means by which a foreign company takes business in China. Although every host plant purchase is to be publicly tendered, its joint venture will always be given priority under the same conditions.
If you don't join a joint venture with someone else, you don't have a share. Whoever gets the orders from the OEM will do a lot. Chen Wenkai thinks. For instance, if Johnson Controls is willing to form a joint venture with Yanfeng to share 70% of Yanfeng's shares, a very important reason is that establishing a joint venture with SAIC's subsidiary will help Johnson Controls get more orders from SAIC.
The competition for domestic and foreign-made parts and components begins to come true. Chen Wenkai believes that the joint venture between multinational parts companies and automakers can obtain a market, and joint ventures with parts and components companies do not have much effect. This has led to very few joint ventures between multinational parts companies and domestic parts and components companies.
However, even if it is a joint venture with a vehicle manufacturer, multinational parts and components companies are mainly based on interior and exterior trim parts. It is still rare for strong parts and components companies with core technologies to choose joint venture routes.
A responsible person in charge of a certain automobile group in China told the reporter that after the release of the joint venture shares of the parts and components companies, the pressure on them was very high. Some of the original joint venture companies had asked for controlling or sole proprietorship. Although the joint venture was ultimately hindrance, it had been a joint venture. The foreign parties will seldom withdraw their capital, but their newly established businesses in China will generally adopt sole proprietorship.
In recent years, two factories and two test centers established by Bosch have been wholly-owned. The newly-opened companies including TRW, Mahler, Schaeffler, and ZF are all based on sole proprietorship.
These parts and components companies are committed to the sole proprietorship road because they have excellent technology and have basically monopolized in some areas. Even if they do not have joint ventures with automakers, OEMs will still purchase their products. And they generally have key component technologies. This also means that even if some parts and components companies choose joint ventures, the key parts and components companies are still dominated by sole proprietorship.
The return of joint ventures will not become the mainstream, and the gap between domestic parts companies and foreign-funded parts companies will not change as a result. Chen Wenkai analysis. At present, apart from interiors and Huaxiang, other major parts and components systems including air-conditioning systems, seat systems, safety systems, brake systems, suspension systems, steering systems, and engine control systems are all foreign-funded and even connected. Good precision castings such as cylinder heads are also foreign investment.
However, this does not mean that domestic companies have no chance at all. As Chinese self-owned brand companies become more powerful, Chinese companies with more say can gain more bargaining chips with international parts companies. The self-owned brand enterprises represented by Chang'an have developed rapidly in recent years. In order to obtain business, some foreign-funded parts and components companies have established joint ventures with them. For example, Changan has established joint ventures with Weststone and Foglia.
In addition, China's parts companies may also emerge in emerging areas. For example, Beijing Siemens Automotive Electric Drive System Co., Ltd., a joint venture between Beijing Automotive and Siemens, will mainly produce electric drive powertrains for electric motors and power electronic equipment used in new energy vehicles, and will be applied to BAIC S, C, and L series. Energy models. SAIC Motor has also made a sound layout for the key technology of New Energy, Sanyo. It does not rule out the possibility of Chinese companies acquiring new energy component technologies.
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