Domestic auto parts sector: structural adjustment urged

Domestic auto parts sector: structural adjustment urged
Jan 14, 2010 By Zhang Ya , eChinacities.com

It's estimated that the total auto output and sales volume in this year will reach 13 million sets, and the total production value in auto parts and components industry of the whole year will also reach a record level of RMB1.2 trillion yuan. According to the statistics of China Association of Automobile Manufacturers (CAAM), from January to August of 2009, 10,761 domestic auto parts and components enterprises have created the value of gross output of RMB774.5 billion yuan, the sales volume of RMB753.8 billion yuan and the export volume of US$16.6 billion.

The reason why China's auto parts and components industry can get such an excellent performance this year is directly related to national timely-issued policies and measures on encouraging auto consumption. Although progress has been made, the manufacture of parts and components has always been a relatively weak link in China's auto industry, and its development lags behind the manufacture of complete car. Many parts and components enterprises have small production scale, low technical level, weak research and development capability and laggard affiliating manners. Therefore, to alter such a status-quo and promote the further development of parts and components industry has always been the common target that the whole auto industry strives for in the development course. To accelerate structural adjustment is not only needed for the complete car enterprises, but also for parts and components enterprises.

On the 2009 annual conference of China's auto parts and components industry held recently, Dong Jianping, Deputy Secretary General of CAAM, stressed that all parts and components enterprises shall focus on improving enterprise quality in the round; continuing to improve the relationship between complete cars and parts and components; guiding and promoting leading parts and components enterprises to take a collectivized and internationalized path; supporting small-and-middle-sized parts and components enterprises to take a professional, small-enterprise-based and big-market-targeted path; insisting on opening up and strengthening international cooperation.

In fact, for the parts and components industry, to adjust structure does not only mean to alter enterprises' current situation of small scale, decentralization, low level repetition, weak technical innovation capability and extensive operation through regulation, but also to encircle the theme of developing energy saving, emission reductive, secure and new energy autos closely, so as to grasp the development opportunity in the future.

When talking about the development of electric power autos' parts and components industry in the field of new energy, Wang Binggang, the leader of supervision and consultation expert team on the key projects of nation ??863 program?? energy saving and new energy autos, expressed on the 2009 annual conference of China's auto parts and components industry that the core technology of electric power-driven autos falls into parts and components, so what shall be done is to reinforce the support to the technical innovation and R&D of key parts and components, increase the investment on raw material, parts and components, and avoid being hollow of electric power-driven autos; additionally, the link between complete car manufacturers and such industries, for example, the battery and electric engine industries, shall be strengthened, a close alliance shall be shaped up and cooperation shall be supported in the entire course from product development and commercialization; the formulation work on related standards shall be expedited to avoid blind investment.

After the annual output and sales volume of China's auto industry broke through a critical point of 10 million sets, becoming powerful is the next demand for industrial development. And the development of parts and components industry is significant for China to become an auto power. The development and progress of parts and components and the development of complete car enterprises are complementary each other. The development of complete car enterprises drives the development of auto parts and components enterprises, at the same time, if the auto parts and components products fall short of demand, the level of complete cars will also be influenced, and it is also impossible that the entire industry can develop well. Therefore, related insiders point out that, "Powerful self-owned brands of complete cars will not exist without powerful self-owned brands of parts and components." Only China's parts and components enterprises really realize localization and internationalization can the competitive strength of China's auto products be really reinforced in international market.

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