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Since 2012, due to the lacklustre growth of the auto market and the political disputes between China and Japan, the new investment in the overall auto parts market seems to have lost the momentum of strong growth over the past years. In particular, some Japanese parts and components companies are not clear about the situation of Japanese vehicle companies. For the sake of capital and operational safety, they have either slowed down their investment in China or shifted some new investment projects to Southeast Asia or South Asia and other countries and regions. .
Even in this context, some parts and components companies based in Europe and the United States have increased their investment in China, and each investment project has aimed at the long-term development of the Chinese market.
The investment of major parts and components companies in China is unabated
Looking back at the 2012 China auto parts industry log, it is not difficult to find that whether the giants from Europe or North America have left clear traces in the domestic market – they will continue to invest in new construction or expansion in various ways. The enterprises and infrastructure in China are fully prepared for the long-term development in China.
Bosch Group, Germany: In February 2012, the groundbreaking ceremony was held at the new Bosch Chassis Control System plant in the Chengdu Economic Development Zone, Sichuan Province. It covers an area of ​​approximately 127,000 square meters and has a total investment of US$137 million, becoming the Bosch Chassis Control System in China. Two production bases; In October, the Bosch Automotive Component New Technology Center and new factory in Changsha, Hunan Province, officially opened. The new plant covers an area of ​​13,000 square meters, with a total investment of 700 million yuan; in November, Bosch Automotive Multimedia Corporation was established in Anhui. With the establishment of Wuhu, the new company will become the engineering technology and production center of Bosch Automotive's multimedia instrument business units in the Asia-Pacific region. It is expected that the annual output will reach more than 2 million pieces. In November, the new base of Bosch Automotive Diesel Systems broke ground in Qingdao, Shandong Province. 160 acres, with a total investment of about RMB 1.6 billion, will become the second production base of Bosch Diesel Systems in China.
Continental Group: In February 2012, Continental Heilongjiang Heihe Winter Testing Ground was formally put into operation. In March, the expansion of the Continental Horse Brand tire Hefei Tire Factory in Foshan broke ground. The total investment of the expansion project exceeded EUR 134 million, and the annual tire production capacity It will increase from 4 million to 8 million; in May, Continental Group officially opened a new warehouse in Tianjin TEDA Economic and Technological Development Zone. The new Treasury has a total investment of 35 million yuan, covering an area of ​​3,700 square meters, providing 3,120 square meters. Storage space; in August, Continental Group announced two major investment projects to speed up its development in China – investing RMB 120 million in the second phase of the newly-built factory in Jiading Industrial Zone, Shanghai, with a total construction area of ​​10,000 square meters. A second plant will be established in Wuhu, with an initial investment of 33 million Euros for the construction of land and factory buildings. In December, the Continental Group’s second auto parts plant in Changchun, Jilin Province will be put into operation. The new plant will be the Continental Group in China and The largest production base in Asia with a total construction area of ​​109,000 square meters and a total investment of 300 million yuan.
Actually, it is not only the above two group companies, including France’s Foglia Group in Europe, Valeo Group in France, Delphi Corporation, Visteon Corporation, Honeywell Corporation, Dana Corporation, Johnson Controls, and Federal-Mogul Corporation. Many Japanese companies also have investment moves in China. What they see is not only the actual market, but also the future market's sustainability and stability.
The degree of localization determines foreign-invested parts companies
The depth of development
The reporter noted that even if the current growth rate of the Chinese auto market has slowed down, among the many parts and components companies, Bosch, the world’s largest parts and components company, still implements its strategy in China step by step. Not long ago, when the reporter interviewed Dr. Chen Yudong, president of Bosch China, he stated that it is the established strategy of the Bosch Group to continue to increase investment in China, especially to the central and western regions of China.
In fact, if we look closely at the observations, the Japanese Denso Corporation, which did not have large investment moves in China in the past year, did not slow down. They continue to cooperate with the China Association of Automobile Manufacturers to help domestic parts and components companies achieve lean production support projects, including the expansion of their research and development center in Shanghai, and work together with Tongji University in China to carry out on-site testing of wireless communication traffic control system technology, etc. All are proceeding in an orderly manner.
The reporter found that some of the world’s most well-known companies that currently have relatively good business operations in the Chinese market not only have support for the sales volume of their related car fleets. For example, the German market is a good market for Germany’s Bosch and mainland companies. In terms of revenue, the US Department of Cars has supported the performance of Delphi, Honeywell and other companies. These companies have developed and supported domestic self-owned branded products, as well as more and more in-depth localization strategies of various companies. They are in China. The important factor that can be vigorously developed.
For example, in 2012, Bosch conducted a series of management changes in China. After Dr. Chen Yudong took office as President of China, Wang Weiliang served as president of Bosch Diesel Systems China, Dr. Liming Chen served as president of Bosch Chassis Control Systems China, and Sun Guozhong took over Bosch startup. President of China for the Aircraft and Generator Division, etc., Bosch's localization in China has spared no effort in terms of production and management, R&D, and management appointments.
Other companies also have localized R&D and strategies for the domestic market. For example, Delphi's China R&D team has developed wire harness systems for electric vehicles that not only meet the needs of the domestic market, but have also been extended to the US market. The globalization of marketing brought about by China's localization strategy has begun to take shape.
Although the growth rate of domestic vehicle production and sales has slowed down, Dong Yang, executive vice president and secretary general of the China Association of Automobile Manufacturers, once stated at the annual conference of China's auto parts industry in 2012 that China's auto parts industry will remain in the next few years. More than 20% increase. Some famous foreign companies have also expressed their opinions on different occasions and believe that the compound annual growth rate of multiple parts and components in China in the next few years could reach more than 10%.
Relying on years of operating experience in China and a solid foundation for localization, many multinational parts companies have become virtually domestic domestic manufacturers. In addition to making necessary adjustments to the product structure with the development of the market, they cannot and have no reason to reduce investment and production scale in the huge Chinese market. In fact, it is not only the parts and components manufacturing industry of the former market, but also the huge amount of car ownership in China, and it also opens a huge aftermarket market space for the whole industry of auto parts and components. Compared with the entire vehicle industry, domestic components have better growth potential and development prospects. This is why major auto parts suppliers in Europe, America and other parts of the world still invest in China and are optimistic about China's overall auto industry growth rate is not high. The biggest reason for the market.
February 22, 2023