Automotive Parts: Confused Before Exporting


On January 26, the State General Administration of Customs released the latest statistical data on China's auto product import and export in 2003. Data show that last year, China’s auto product import volume reached a record high of US$14.447 billion, an increase of 84% over the same period last year. The annual export value of automotive products was only US$4.71 billion, an increase of 34%, and the import and export deficit was close to US$10 billion.
Before talking about the domestic car industry's exports, experts pointed out that although China's vehicle manufacturing industry still has a large gap with the international level and it is difficult to complete large-scale exports in the short term, the auto parts industry has developed to a considerable level and has resolved some
After entering the market at the beginning of the difficulties that can not be avoided, it is fully conditional to quickly achieve rapid growth in exports.
So, before the international market is shaken, what problems do domestic automobile spare parts companies need to face? A few days ago, relevant persons of the Shanghai Automobile Parts & Accessories Industry Association told reporters that according to the differences in the enterprise systems, the confusion mainly comes from three aspects.
Vehicle manufacturer:
It was all the trouble of “treatment” When we interviewed a joint venture parts supplier of a large auto group in China last year, facing the reporter’s question on how to expand profits, the company’s CEOs looked at ease: “We are a subsidiary of a large group. With the group, we have our profits." He explained that the company produces a kind of automotive transmission components, the market price of up to 120 yuan, the group's purchase price is 480 yuan, because the group president hopes to subordinate every spare parts supply Businesses can "live a good life." What the boss did not think of was that this kind of enjoyment and enjoyment has caused the company to lose several opportunities to rush into the international market.
Due to the group's excessive “caring”, the company’s profits have been excellent over the years, and it has become a habit of “big money”. The quality of products is unsaid, but the production management costs are also quite high. In the middle of last year, a multinational group came to visit the company to negotiate the procurement plan. It was very satisfied with the quality of the products. The quality of the employees was frequently nodded and the thumb of the company's culture was heard. However, after the inquiry, they dropped the following sentence: The real meaning of global sourcing is cost savings, which is three times higher than the market price, indicating that you are not yet familiar with the game rules of international sourcing."
In the face of international market competition, the paralysis of the subordinate enterprises of this large group may be the common problem that most domestic suppliers of spare parts for complete vehicles provide. As the saying goes, "regular troops" who have been used to making things difficult for themselves and have been used for good days obviously have to use most of their profits as "buying money" to enter the international market.
Fortunately, many experts believe that this painful price return process will be completed soon. They analyzed that the competition in the domestic auto market is becoming more and more fierce. The sales period for one model is getting shorter and shorter. The cost of the diluted vehicle is on the rise and the price is falling. This double squeeze will eventually Significantly reducing the “excellent treatment” of parts and accessories suppliers, therefore, the competition in the domestic market is increasingly converging with the international market. After a period of pain, these most powerful manufacturers in China are expected to be the first in the international automobile parts and components. The market succeeded in playing the "Chinese card."
Private parts companies:
It is undeniable that the brand is missing, so far, China's auto parts exports, mainly due to little-known private enterprises. However, walking in the international market has also brought them many pains. The biggest pain is that many companies do not even know what kind of brand labels their products will be affixed to.
The CEO of a company that produces generator components in Shanghai once sighed hard at the Shanghai Auto Parts Industry Association: Although orders have been kept and the products have been exported to several continents in the world, I rarely know what brand products my company produces. Such companies are often referred to in the industry as "brand owners." Most of them started low and early, starting from the hands-on workshops, they started by using the method of drawing lessons from large companies' product drawings and hiring "part-time engineers on Sundays." Gradually upgraded to the current level of purchasing advanced equipment, recruiting first-rate talent. However, most of them failed to establish their own brands and always played the role of "processing factory".
Without their own signboards and intangible assets, the added value of profits will not be discussed. These companies are often subject to “unreasonable pressure” from the ordering party, and the price is low enough to be low. Therefore, although they have launched a large number of auto parts and components exports for China, the export regions basically cover Africa, Southeast Asia and the Middle East. Less developed areas are the mainstays, and even if they occasionally enter the European, American, and Japanese markets, they are mostly secondary facilities. They cannot make much profit for themselves, nor can they earn more foreign exchange for the country.
From an expert's point of view, "licensed households" are almost the "landscapes" that will appear when the auto market in each developed country and region rises. The future of a branded door will depend entirely on survival of the fittest. A very small number of companies will break out of the chaos and eventually win their own brands. Most companies will find it difficult to shake off the fate of bankruptcy and mergers.
Inland parts suppliers:
Where are the orders?
In addition to price divergence and lack of brands, domestic auto parts suppliers, especially those in the Midwest, are eager to ask questions: Where are the orders? Where is the next family? Among them are companies with good brands and excellent products. However, because of the obstruction of information channels, in the next 3 to 4 years, the world’s automotive multinational corporations and retail markets will purchase large orders of 30 to 50 billion yuan for domestic auto parts. It is no different from castle in the air.
Similarly, multinational group purchasers also suffer because they cannot find them. Ford’s purchasing staff has discovered that it is almost impossible to complete billions of large-scale purchases in China alone. One of the company’s managers, who had been responsible for purchasing in the North American region, said that the major challenge facing China’s current procurement is that finding the right companies and products in the huge Chinese market is almost equivalent to a needle in the haystack—China. The biggest bottleneck of the auto parts industry entering the global purchasing industry is the lag of information dissemination channels and efficiency. The executive said that in foreign countries, the usual practice is to use “industry associations, peer evaluations, intermediary agencies, professional newspapers and magazines, and other channels to “widen the bottleneck”, and at the same time invite world-renowned consulting companies to assist implementation and supervision. A responsible person of Shanghai International Automobile City Development Co., Ltd. believes that only the current comprehensive information collection method in the international procurement process can make many domestic excellent spare parts suppliers who are only one step away from the international market.
For a mature automobile industry, the status of spare parts supply in the international market is one of the pillars that support it. Looking at the world, no one dared to underestimate the role that the Chinese car industry will play in the future of the international auto market. However, before entering the show, the Chinese auto parts and accessories industry was confused. In this regard, should we do something? (Lee Wu)

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