What have we learned from the joint venture industry after the parts and components industry began its joint venture?

"A joint venture between Chinese and foreign parts and components companies has brought products, technology, capital, and management to China, which has increased the overall level of China's auto parts industry and made a certain contribution to the Chinese auto industry." “For many joint venture parts and components companies, their 'ten years of marriage' is successful. After continuous running-in, both parties (or tripartite parties) have identified common interests, development goals and concepts, and have grown together. ”


Joint venture guarantees supply of high-end parts for passenger cars

“Partnership joint ventures have ensured the supply of domestic high-end and high-end auto parts. This is one of the most active contributions of the joint venture.” An expert who has been engaged in parts and components industry research for many years said, “The joint venture parts and components company is a passenger vehicle in China. Local production provides the preconditions for ensuring the production of passenger cars and meets the needs of the public at the primary stage for the automotive market.”

In the mid-1990s, the foundation of China's auto parts industry was relatively weak, and it was difficult for local parts and components companies to become first class or second class suppliers for passenger car companies. The weak technical strength and low development capacity make it difficult for these companies to support the joint venture passenger car companies. Under such circumstances, large multinational component giants entered China through joint ventures to solve the problem of mid- to high-end product support for passenger vehicle companies.

“The products of local companies that did not have joint ventures at that time were difficult to support. The parts and components produced after the joint venture were greatly improved in terms of product quality and technology, and the number of matching products was greatly increased.” said Wang Rongzhen, former general manager and senior engineer of Shanghai Volkswagen AG. .

"Through the cooperation with foreign partners in the past few years, we have grown up together with our joint venture partners." The original Chinese staff of a joint venture parts and components company said, "Originally, we were only a small manufacturer, sat working, and did not know what to call. The kanban system, which does not know what pipeline operations are, was only available to a whole vehicle company at that time, and through 10 years of operation with the foreign side, we have raised to a very high level in many aspects, in line with our partners’ interest goals. Now we can not only support a number of domestic vehicle companies, but also become an important global producer. This has never been thought before."

Higher levels of "technical spillovers" at management and production operations

At present, among the disputes over joint ventures, the most mentioned is the impact of "technology spillovers." The "technology" mentioned here does not simply refer to the technology of product development, but also includes the influence of the joint venture's production technology, management technology, and marketing techniques on local companies.

"To a certain extent, the joint venture has a high level of technology spillover at the level of management and production operations. However, in terms of core technology research and development, the joint venture's technology spillover is very low," said a senior industry expert.

At present, foreign-funded parts and components companies have come to China mostly with mature products and mature technologies. Although more and more well-known parts and components companies have established R&D centers in China, they are mainly engaged in localization work, and therefore mature products The shift is difficult to bring about the spillover of core product technology. Therefore, from the point of view of product development and production, the “spillover” is also only at the production operation level.

"The management technology spillovers of joint venture parts and components companies in the areas of procurement, production management, finance, and logistics have enabled us to learn a lot from them and benefit from them." Someone in the industry said. Effectively promote the development of upstream and downstream related industries

“The joint ventures have effectively stimulated the development of upstream and downstream related industries, which will not only help improve the level of secondary and tertiary local suppliers, but also have a certain technical demonstration role for vehicle manufacturers, especially for OEMs that produce their own brands. In addition, there are also contributions to taxation and employment.” Experts pointed out that joint venture parts and components companies have effectively promoted the technology and management of upstream and downstream affiliates, which is also one of the contributions.

The joint ventures set up by domestic large-scale or medium-sized component companies in China are mostly Chinese-owned parts and components companies. In the process of cooperation, the joint venture companies provide them with technical guidance, instill in them the lean production concept, and guide them on how to match the products on the system. Through this cooperation, the comprehensive capabilities of local parts and components companies have been improved.

In addition to demonstrations and assistance to upstream companies, joint venture parts and components companies can, to a certain extent, pull up and pull off the downstream vehicle companies. A joint-venture component company stated that a large part of their EFI products is for small cars produced by companies such as Changan and Hafei. “EFI needs to be calibrated under extreme conditions. Initially, based on the principle of customer service, we helped some vehicle companies train technicians to calibrate until the technicians are mature.”

Recently, Yin Tongyao, General Manager of Chery Automobile Co., Ltd. also commented on the contribution made by foreign-funded enterprises in China at a forum during the Guangzhou Auto Show: “We have cultivated the basis of auto parts for China, cultivated talents for autos, and established supporting systems.”

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