Multinational parts companies are accelerating the process of China's localization

In the face of the impact of the global auto industry, auto parts companies, as suppliers to vehicle companies, will undoubtedly face huge losses.

Dr. Chen Yilong, Asia Pacific Director and Chief Representative of China Automotive Industry Action Group in Asia, described the status quo of the parts suppliers to reporters: “Ford, General Motors and Chrysler have faced more worries after bankruptcy and restructuring. Because most parts suppliers in the United States are Supplying three major groups, GM, Chrysler’s bankruptcy will affect the supply of large parts and components companies, Ford will not be spared if it faces huge losses, the entire supply chain will be greatly affected.Fortunately, the supply chain so far I haven't collapsed yet."

Although there is no breakdown, it does not mean that there is no crisis at all. More and more multinational parts and components companies think about where the future growth point of interest is. Just as with the large-scale acquisitions and reorganizations that have occurred in the entire vehicle sector, component suppliers are also intensifying their integration due to changes in the global auto industry structure. After the merger and reorganization, one of the biggest issues facing all suppliers of parts and components is localization.

Localization is a key step for multinational parts companies to strengthen their competitiveness

In the process of developing global markets and promoting global marketing strategies for multinational component companies, internationalization and localization are two crucial aspects. The internationalization of marketing is the ultimate marketing strategic goal of multinational parts and components companies. In order to achieve this strategic goal, multinational corporations must adapt to the different needs of target consumers in each country's markets, maximize the organic integration of internationalization and localization, and achieve "thinking globalization and action localization." To this end, multinational parts companies must establish a marketing concept that integrates internationalization and localization.

As a component giant, Denso is actively carrying out the process of localization in China. Due to GM, Chrysler’s bankruptcy and restructuring, and loss of Toyota’s business, the company’s business in Europe, the United States, and Japan has also been affected to varying degrees. According to the reporter’s understanding, the current scale of business installed in China is still relatively small (around 5 in the world). %). Yamada said that the recent goal of Denso is to achieve a 25% market share in China, and Denso China will reach 20% of the world's total. “We hope to increase our market share in the Chinese market,” said Denki Yamada, general manager of Denso China Investment Co., Ltd. in an interview with reporters: “The future market growth will be emerging in China, India, Brazil and Russia. National transfer. "There is no doubt that multinational parts companies should strengthen their competitiveness in the above areas, and the localization process is one of the most critical steps.

China Becomes an Important Field for Procurement of Multinational Component Enterprises

Compared with other emerging markets such as India, Brazil, and Russia, China is undoubtedly an important market with both cost and quality advantages. In retrospect, initially the three major automakers in North America were under pressure from their domestic markets to increase their procurement efforts in China, followed by their first- and second-tier component suppliers, as well as large-scale OEMs from Europe. First-tier suppliers have also invested in the army of Chinese procurement. Of course, there are also some companies that have strong strategic capabilities. They started their global procurement strategy ten years ago and they have achieved extraordinary results, such as the German Bosch company. According to statistics, only domestic parts and components account for only 20%-25% of the time. Foreign (shared or wholly-owned) parts and components account for most of the market share. Among them, there are many transnational giants such as Delphi, Denso, Sumitomo, Dana USA, Valeo of France, and Fujitsu Electronics of Japan. After five years, this boom has not returned.

As a result, China has become a hot global procurement destination. Many companies are ambitious when setting up China's procurement targets. If they add up their total target purchases, they will be worth more than US$200 billion from 2003 to 2008 and set up in China. The various procurement centers also reached about 400 to 500.

HC consider:

There is a very important problem that a large part of domestic domestic parts and components companies are engaged in the production of labor-intensive and processing-type products. The products mainly involve seats, batteries, wheels, bumpers, universal joints, Drive shafts and windshields, these products have lower technical content requirements. In key automotive parts with high technological content, many Chinese auto parts suppliers rely on the support of large parts suppliers in the world in terms of technology, capital, and sales channels. And most of its products just stay in the imitation stage.

Therefore, we have to think that when multinational parts and components companies are flooding into China and accelerating their localization process, if China’s domestic parts and components companies still imitate and rely on it, then Chinese parts and components companies will A huge market will lose more and more words.

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