Daixi Auto Parts: How can we meet the rainbow without experiencing storms?

The auto parts industry was once one of the six pillar industries in the Luxi County. Before the rise of the hydropower industry, it was the county's largest source of tax revenues and the leader in the taxation list. Its economic role and social contribution are self-evident. However, with the restructuring of the Dongfeng Company and the transformation of the new organizational system, management model, and procurement methods, the auto parts and accessories industry in the west of Fujian Province has been severely affected. What is the status quo of the western Fujian auto parts industry? What are the factors that affect the development of the western Fujian auto parts industry? How to develop? How to realize the coordinated development of auto parts industry and taxation? The author conducted a special investigation.

I. Status Quo: Competitive Power is Increasing

Xie Youhua, chairperson of Yanxi Qicheng Automobile Parts Co., Ltd., told the author: “The county’s auto parts companies have improved the core competitiveness of the company through fierce competition through product mix adjustment, market diversification, and basic management. To survive and develop."
Daixi Auto Parts Industry started from the construction of Auto Parts Factory in the 1980s and relied on “Dongfeng” for more than 20 years. It gradually grew into a pillar industry in West Fujian and became a member of Dongfeng Commercial Vehicle Auto Parts. . The following patterns and features are presented:

- Constructed a "four-wheel drive" pattern. After the end of the last century and the beginning of this century, enterprise restructuring, resource integration and market friction, Daixi auto parts industry has reshuffled, existing "Yunxi County, with sincere limited liability company, Luxi County Shenfeng Industrial Co., Ltd., Shiyan Gimhae Fengfeng Co., Ltd., Shiyan City Feishun Automotive Engineering Plastics Factory and other four companies, the products are: main bearing cover series, separation fork series, flange series, second bearing series, exhaust branch pipe series, 33N-00315, 50N -01003, 50Q37-01004 flip bracket beams, rubber cover, passenger seat frame, three-way bracket, automotive interior parts, packaging boxes.

- A stable scale effect has been formed. After the painful economic benefits of the “Ninth Five-Year Plan” Dongfeng Co., Ltd., the western Fujian auto parts industry showed a trend of economic growth and stable and synchronized growth of tax revenues. Compared with the other five pillar industries in western Fujian, the western Fujian auto parts industry has become the most stable pillar industry. In 2005, Daisy Auto Parts Industrial Assets amounted to 26.948 million yuan, the total production value reached 56.865 million yuan, accounting for 6.4% of the county's industrial output value, and the sales income was 57.94 million yuan, and the tax revenue reached 3.919 million yuan, accounting for the county's tax revenue. The total amount of 9.41% from the end of the “Ninth Five-Year Plan” period to the end of the “Tenth Five-Year Plan” period, the total tax revenue of the auto parts industry in the west of Fujian rose from 2.438 million yuan to 3.919 million yuan, and the average annual growth rate reached 9.27%.

- Nurturing a diversified market. In recent years, due to the accelerating adjustment of Dongfeng’s strategic structure, the proportion of passenger vehicles has surpassed that of commercial vehicles, while the auto parts products in West Fujian have been seldom matched with heavy-duty vehicles and passenger vehicles, and the supporting share has been shrinking. This forced the auto parts of Longxi County. The company has intensified its efforts in market development. While supporting the Dongfeng Company, it actively seeks for other manufacturers to support and expand sales channels. At present, our auto parts products have been sold to 23 provinces (municipalities) across the country, and the Luxi County Auto Parts Co., Ltd. has even entered its own products into "FAW" and "Fukuda" companies.

——Accelerate the pace of product structure adjustment. From the production of single-use commercial vehicle accessories to passenger cars, high-tech products and high-end products began mass production. The self-funded research and development of "Steam bladder holder" and trial production of "Flywheel Casing" by Shenfeng Company is a leap in the quality of commercial vehicle components in West Fujian. Sincere Auto Parts Co. has reached an agreement with Ford Motor Co., Ltd. The exclusive "Differential Gear" is A historic revolution in the transformation of Fujian Auto Parts from a commercial vehicle to a passenger vehicle

Second, the problem: supporting with the Dongfeng shrinking

Mr. Zhang, the dealer of the western Fujian province in Shiyan Auto Parts City, told the author that “In recent years, the overseas auto parts have continuously seized the Shiyan market. Nowadays, the auto parts products distributed by Auto Parts City are nearly half of the foreign products. It seems that Shiyan's auto parts have a real need. A good reflection.” The survey found that due to business philosophy, product structure and other reasons, has seriously affected the county's auto parts industry's healthy development. Specifically, there are the following problems:

——The product did not support the load company. At present, the truck company is the main channel that Shiyan City provides for Dongfeng. The relevant data shows that in the Dongfeng truck company's annual purchase price of around 12 billion yuan, my county is almost zero. Although some companies are developing passenger car products and actively expanding the social supporting market, they have not yet formed a true support.

- Low technological content of products. At present, the auto parts companies in western Fujian, regardless of their technological content or product cost, do not have a competitive advantage, and it is difficult to keep pace with Dongfeng's new product support. Therefore, in the future automobile development, the challenges faced by county-level auto parts enterprises will become increasingly severe, which will directly affect the continuous growth of tax revenue.

- Slow structural adjustment. Since the end of the “Ninth Five-Year Plan” period, Dongfeng Company has accelerated the pace of structural adjustment. At the beginning of the “Tenth Five-Year Plan”, the proportion of passenger cars has crossed commercial vehicles. Since the beginning of this year, Dongfeng’s commercial vehicle production has been sloppy by 46%. In July, Shiyan commercial vehicle produced only 900 vehicles per month, which is 91% lower than the planned 10,000 vehicles. The demand for commercial vehicle accessories has naturally dropped drastically, while 90% of the auto parts products in western Fujian are commercial vehicle accessories. The structural adjustment has just started and there are fewer products supporting heavy-duty vehicles and passenger vehicles. The supporting share is shrinking, and the scale, strength, In terms of quality, price, and service, it is impossible to compete with the auto parts companies in Jiangsu, Zhejiang, and Shiyan districts, let alone cope with the aggressive competition of Nissan's original ancillary companies.

- The production cost remains high. Saturation of the market and reduced demand have led to continued declines in the prices of commercial vehicle accessories. Since the beginning of this year, the prices of major OEMs have dropped substantially, and they have generally fallen by 4%-6%. The rising prices of the raw material market have increased the production costs. Since the county auto parts products are unmarketable in Dongfeng Company, all companies must be farther and farther and sell products to foreign provinces and cities, plus the increase in the price of gasoline, bridge tolls, high-speed passing card fees, and so on, resulting in a marketing cost. Correspondingly, the use of space is greatly reduced.

Daixi auto parts industry is also facing the constraints of economic soft environment, cultural environment and financing difficulties. Under the constraints of these unfavorable factors, two of the four companies have plans to switch production or relocate. The prospects of Fujian Auto Parts Industry are mixed.

Third, hope: the advantages and opportunities are still obvious

Faced with the severe situation, what are the unique advantages and major opportunities for the development of Fujian Auto Parts Industry?

—— The "blood" advantage of Daixi and Dongfeng. Shiyan is the cradle and birthplace of Dongfeng Company. Daixi Auto Parts Industry grew up under the care of Dongfeng Company. They have a “blood relationship” that is difficult to separate from each other. There are four auto parts companies in West Fujian and three bases in Wuhan, Xiangfan and Shiyan. There are countless connections. In addition, the west of Fujian Province is close to the Shiyan base, and the integrated operating costs such as transportation, transaction, and communication are low. These emotional advantages and geographical advantages must be turned into economic tax advantages.

-- The restructuring of Shiyan commercial vehicle base contains significant business opportunities. In addition to designating the Shiyan as a heavy truck base, Dongfeng Company will also deploy the Dongfeng buses and mini-computers to the city. This is a rare opportunity for the development of the auto parts industry. Dongfeng Company regards the development of passenger cars and mini-vehicles as an important content. In particular, the localized production of passenger cars in Shiyan and the enlargement of the mini-vehicle business will surely bring significant impact to the production of interior parts and parts for passenger cars and mini-vehicles. Business. At the same time, Dongfeng Bus will also be integrated as an important part of the commercial vehicle business, which still contains many business opportunities.

Huang Gang, party secretary and deputy general manager of Dongfeng Commercial Vehicle Co., Ltd., said: “Although Dongfeng has moved its headquarters, Dongfeng Commercial Vehicle Co., Ltd., which has been dependent on Shiyan for many years, has not moved nor will it move. Dongfeng Commercial Company is following The business plan is steadily advancing, and the development of the commercial vehicle business will surely provide continuous driving force for the development of the Shiyan economy."

Fourth, the way out: do not experience the storm, how can we see the rainbow

In the face of opportunities and challenges, how will the county auto industry develop?

Tong Shenglu, deputy county governor, said: “The Dongfeng windmill project is increasing, the technical content is continuously improving, and the supporting benchmarks are also correspondingly higher. The auto parts companies must complement it and must also carry out technological transformation. This is for my county auto parts. The company poses a serious challenge."

Tong Yugui, chairman of County Shenfeng Company, believes that: “To change the status quo of the western Fujian auto parts industry, the government must do a good job of guiding and guiding the company to develop to scale and brand.” After the investigation and study, the person in charge of the State Taxation Bureau, the government, the department , the company made specific suggestions

The government: Planting phoenix trees to attract phoenixes. There are four auto parts industrial enterprises in the county, which are small-scale, aging equipment, single products, supporting vision is too narrow, combined with their own, lack of brand awareness and joint operations experience, low competitiveness, it is recommended that the county party committee and the county government do There are four things:

"Focused." The county government took the lead in setting up a small and medium-sized enterprise association. The economic and trade bureau and the planning bureau carried out specific operations and came up with a “general process (planning)” to form a joint organization with various companies to jointly create “Yixi brand” and guide enterprises in funding. The cooperation in technology, talents, etc. should be well coordinated, and prevention should be a piecemeal and mutual restriction. Make existing resources play a role in jointly expanding and strengthening companies.

"Bridge." The county government must use the advantages of the administrative chain to “bridge” the company and integrate the international and domestic first-class auto parts companies for cooperation and common development. Formulate policies that encourage the integration of enterprises within the county and allow companies to participate in Dongfeng and domestic and international first-class auto parts companies.

"Introducing Phoenix." Accelerate the pace of the “Wangjiaping” industrial park construction, formulate investment promotion policies that are superior to the coastal areas, attract foreign companies to invest in Luxi, and focus on the successful entrepreneurs in the western part of the country, especially on Liu Yanfei, Liu Hebing, etc. Well-known domestic entrepreneurs. On the basis of the introduction, existing enterprises, such as auto parts companies that grafted and reformed, quickly transformed the county’s economic composition from an agricultural economy to an industrial economy.

"nest". We must continue to create a relaxed macro environment, a good public opinion environment, a harmonious humanistic environment, a standardized law enforcement environment, and a sincere service environment in order to continuously enhance the attractiveness of western Yunnan to international and domestic first-class auto parts companies. For existing enterprises, we must “focus on protection,” implement “fee-free zone management,” and give preferential price concessions on electricity use and water consumption, discuss issues that are in dispute, discuss issues on a one-to-one basis, and coordinate with specialized agencies to ensure that enterprises One mind grasps business.

Taxation Department: Build a greenhouse to grow large trees. The development of the young Daisy auto parts industry not only requires the government to act as a “nanny”, but also requires the meticulous care of various functional departments, including the taxation department. Wang Jian, the director of the State Taxation Bureau, said: “After tax revenue reduction and CTAIS software are put on the line, tax monitoring has become more rigorous. As the county-level taxation department, it is difficult to reduce taxes, reduce taxes, and ease taxes, but There are still many things to do in law enforcement, service, and planning."

Be a good staff officer. On the one hand, the government should be a good adviser, based on the government's practice of borrowing from certain coastal areas, and on the premise of guaranteeing local fiscal expenditures, it should introduce fiscal returns, financial incentives, discounts on technological changes, establishment of special support funds, and zero return on government land as soon as possible. ", And policies such as administrative fee reductions and incentives to encourage auto parts companies to become bigger and stronger. On the other hand, it helps enterprises to do a good job in tax planning. Help companies not only against the premise of the tax law, but also taking into account the interests of the country and the enterprise, using sufficient tax incentives for the government, reasonable tax avoidance, allowing enterprises to shift to low-tax projects, and guiding enterprises to become commissioned and transformed into direct production and sales. To make the company profitable, it can also leave more tax revenue in western Yunnan.

Just law enforcement. The taxation department must earnestly implement the powers conferred by the tax law, implement fairness, impartiality, and open law enforcement, strictly follow the “ABC” level management, implement sun inspections, humanity inspections, and fully respect the rights of taxpayers; actively conduct investigations and studies and actively reflect The reform of the tax plan will shift the tax burden of the auto parts industry from high to low; pay attention to research on taxation policies, aim at the implementation of the “direct delivery” sales model of Dongqi Motor Co., Ltd., and flexibly handle the problem of business convergence and taxation left over from corporate restructuring.

Excellent service. Further improve the taxation environment, improve service attitudes, open tax processing procedures, simplify taxation procedures, and maximize the convenience of taxpayers, so that taxpayers have a strong sense of taxation. Continue to implement a series of "window" service projects: "all-day, no holiday" taxation, "first question accountability" management, "one-window, one-stop, one-stop" services. We will continue to open a "green channel" for laid-off and re-employment taxpayers, provide "on-site service" for disabled taxpayers, use various channels to promote tax law, and popularize tax laws.

Enterprise: Self-hematopoietic body. Zhang Yibing, general manager of Qixi County Jingcheng Auto Parts Co., Ltd., said: “The government’s matchmaking and departmental law enforcement services are external factors. The key to the development of the auto parts and accessories industry is to rely on enterprises to improve their 'hematopoietic' function and enhance their competitiveness.” The picture shows Zhang Yibin (middle), general manager of Qixi County Jingcheng Auto Parts Co., Ltd.

Strengthen the basic management of the company. It is necessary to embody humane care everywhere, retain technical talents, start a business in western Fujian, and ensure the advanced nature of “the first productive force”. It is necessary to increase financing methods, obtain more funds, further transform equipment, and improve product quality and technical content. Q (quality), C (cost), D (production and loan period), S (safety), M (employee skills and morale) work hard, consolidate the key foundations of the company; scientifically formulate development plans and work systems Foster advanced corporate culture and create a good internal entrepreneurial environment.

Accelerate the pace of strategic adjustment. The cooling of commercial vehicles and the heating up of passenger vehicles are indisputable facts of the auto market. To survive and develop, auto parts companies in the west of Fujian must adjust their product structure, dare to transform themselves, develop new products, and contract "high-tech" jobs. We must have the courage to "hit the wall" and seek cooperation from first-class companies; we must be good at seizing business opportunities, and must "order" the first-class OEMs such as "Ford"; we must be diligent in research, master the dynamics of new products, and grasp high-tech products. The direction; to give the vitality of the product, in the quality of efficiency, change traffic, financial disadvantage for the quality, brand advantage.

Adhere to the road of market diversification. Daixi auto parts companies should regard “relying on the east wind but not relying on the Dongfeng” as sales ideas and should actively leave the embrace of the “mother” and open up sales channels. It is necessary to employ information officers throughout the country, and to grasp the sales dynamics, strengthen ties with major OEMs, avoid the positive competition between Nissan’s original supporting companies and large enterprises in Jiangsu and Zhejiang, and use flexible tactics to make up for the disadvantages of cost and technical content. He keeps the industry, focuses on the Sichuan, Shaanxi and Shanxi provinces, marches in Tibet and Mongolia, and guerrillas on the Henan and Henan provinces. He has come out with a sales strategy of “relying on the east wind, taking off the Shiyan, based on the Central Plains, and taking a broad view of the world” and strives to lead the Daixi Auto Parts to “specialized and wide varieties”. The development of mass production, high-volume, high-quality, low-cost, and integration has enabled the county's auto parts industry to be rejuvenated.

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