How can Chinese auto parts enterprises break through the technological "bottleneck"?

The deep global automotive industry affected by the financial crisis is gradually picking up. Reports on vehicle sales in the first half of the year have already been made public. China's auto sales have topped the list with 6.09 million units, making it a well-deserved “world's number one auto market”. Behind numerous auras and numerous data supporting this view, there are still some people in the industry who emphasize that this “virtual name” should be viewed with a rational eye. The Chinese auto industry is also facing a series of arduous strategic tasks from a big automobile country to a powerful automobile country. There is still a long way to go before the automobile industry powerhouse.

Recently, Gasgoo.com's survey of 183 local auto parts companies showed that 89% of the companies said they would not engage in independent development and there was no plan for independent development in the near future. According to Chen Wenkai, president of Gasgoo.com, “Chinese suppliers are heavy production, not quality, and heavy production, but they are not focusing on R&D. Many suppliers have large factories, but they do not have a dedicated R&D center.”

The key to the development of the automotive industry lies in technological innovation, and the technological innovation of parts and components is the core competition. It is understood that in the domestic auto parts and components supporting, foreign-funded enterprises with strong technical strength, firmly occupy the commanding heights of market competition, Chinese OEMs and auto parts manufacturers in the core technology dependence on foreigners is quite high. In 2007, China's automotive EFI system, engine management system (EMS), ABS, micro-motors, and airbag production, foreign-funded enterprises accounted for 100%, 100%, 91%, 97% and 69% respectively. Among the more than 5,000 automotive parts and components companies in the country, there are currently more than 1,200 foreign-invested enterprises, and the trend of wholly owned and controlled foreign-owned enterprises is becoming increasingly apparent.

“There is no long-term concern for people and there must be some concern.” Improving the ability of independent research and development and mastering advanced manufacturing technologies are the top priorities of Chinese local parts and components companies.

In this regard, parts and components companies have three ways to go:

The first is to strive to strengthen in-depth cooperation with domestic OEMs such as Chery, Brilliance, etc., and strive to enter their supporting systems to conduct simultaneous development, training and improve their R&D capabilities. Domestic OEMs are relatively weak in terms of their technical strength and rely heavily on parts and components companies. At the same time, through cooperation with OEMs, internal OEMs can also optimize the internal management of their parts companies and upgrade their technology. According to data from Gasgoo.com, domestic high-end equipment is currently undergoing a new round of expansion. A large number of OEMs have increased their efforts in developing high-quality suppliers in China. Currently, over half of the top ten OEMs in China are now Car network looking for suppliers.

The second is to realize joint ventures or mergers and acquisitions with foreign parts and components companies. The international financial crisis has prompted some foreign technology, branded and marketed small and medium-sized component enterprises to face unprecedented financial difficulties. This is the best time for Chinese companies to acquire valuable assets. This is conducive to rapidly improving the technological level and overall competitiveness of enterprises, laying the foundation for enterprises to participate in global competition and achieve sustainable development.

The third is to actively understand the latest developments and trends in international automotive technology and standards, and participate in international exchanges. Many parts and components companies reported that they lack an effective platform for technical exchanges with their counterparts in the country, lack intuitive understanding of international high-end technologies, and participate in many forums with little taste. The material gains are not significant. In view of this, the series of technical seminars held by Gasgoo.com and the special parts procurement matching meeting effectively solved the bottlenecks of theoretical exchanges and long-term separation of trade cooperation at the practical level, and effectively combined the two to allow participation. The participants received real gains.

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