In 1978, Comrade Deng Xiaoping’s instructions that “joint ventures could be done†opened the door to Chinese-foreign equity joint ventures in the automotive industry in China, and vehicle joint ventures were established one after another. For the auto parts industry, Sino-foreign joint ventures and cooperation projects started several years later than the entire vehicle project. In 1988, the company established the Shanghai Natiefu Company for Shanghai Volkswagen Santana. This company, which is a joint venture between SAIC and the British GKN Group, became the earliest Chinese-foreign joint venture auto parts company. Since then, multinational auto parts giants have begun to enter China in large numbers. Bosch, Delphi, Denso, BorgWarner, Valeo... 70% of the world’s top 100 auto parts companies have set up factories in China. There are more than 1200 multinational auto parts companies that have invested. Over the past 30 years of reform and opening up, multinational parts and components companies have made investments in China from scratch, from little to large, and have now become an indispensable part of China's auto parts industry. The trajectory of the development of multinational component companies in China presents the following five characteristics. Increasing investment Over the past 30 years, the investment of multinational parts and components companies in China has been continuously rising. Even under the adverse circumstances of the global economic crisis this year, multinational parts and components companies still have a strong investment enthusiasm for China, which is rare in the past. of. At the beginning of the reform and opening up, the investment of multinational parts and components companies in China was centered on a whole vehicle project, such as the establishment of a supporting system around Shanghai Volkswagen Santana, and the establishment of a joint venture component supplier company around FAW-Volkswagen. And most of them adopt the form of technology introduction. This form is the way that domestic manufacturers introduce the manufacturing technology of certain parts and components of multinational companies through the way of purchase, and strictly speaking does not belong to the direct investment of multinational companies. At this time, the investment of multinational component giants in China is only a tentative stage and the amount of investment is not large. With the constant establishment of vehicle joint ventures and the entry of multinational vehicle companies into China, the investment of multinational component companies in China continues to grow, but overall it is at a relatively low level. As China's "heavy host light components" idea still existed at the time, the development of parts and components industry encountered certain difficulties. According to statistics, from the “6th Five-Year Plan†period to the “Ninth Five-Year Plan†period, the investment in China's auto parts industry is roughly equivalent to 30% of the investment in the entire vehicle, which is far behind the 1:1 average level of the developed countries in the auto industry. There are not many investments by multinational corporations. In spite of this, compared to when they first entered China, the investment of multinational component companies has increased by a certain margin. The real increase in the investment of multinational component companies in China is due to the gap in technical strength, and the core components and technologies of automobiles have been firmly controlled by multinational corporations. High-value-added products such as engines, transmissions, and fuel injection systems are all provided by foreign manufacturers. The market share of more than 90% of the domestic high-end parts and components market is controlled by foreign-funded parts and components companies. For China's domestic parts and components companies, multinational companies adopt acquisitions and other methods to control and suppress, and strive to achieve a monopoly in a certain market. Such as Bosch, Denso's monopoly on fuel injection systems, ZF, Aisin and other monopoly on automatic transmissions. In contrast, the highest sales of parts and components produced by local companies in China are axles, universal joints, and transmission shafts. The technical content of these products is not high, and the added value is relatively low. Under such circumstances, local Chinese companies can only be second- or third-tier suppliers of foreign automakers, and they cannot enter the complete vehicle support system. At present, foreign-funded enterprises already occupy more than 60% of the market share in the Chinese auto parts market. Some people even estimate that foreign companies occupy more than 80% of the car parts market. In the field of high value-added products such as automotive electronics and engine parts, the market share controlled by foreign companies is as high as 90%. With the entry of major vehicle manufacturers in Europe, the United States, Japan and South Korea into China, driven by different standards and interest targets, multinational vehicle companies and component companies have formed a new closed supporting system, which has greatly limited The optimized allocation of auto parts industry resources has affected the integrity of China's auto industry industrial chain. Through the control of core technologies and key components, the entire industry chain is controlled, which is the main strategic means for transnational companies to carry out industrial transfer and industrial layout globally. In the past few years, Europe and the United States have not concluded complaints against China's "complete vehicle characteristics" and its purpose is also here. [next] High-energy and high-pollution enterprises transfer to China With the increasingly stringent control of high energy consumption and high pollution industries in various countries in the world, multinational component companies gradually began to transfer these industries to China, such as tires and castings. Multinational companies expand through mergers and acquisitions and building factories in China. Take the tire industry as an example, local companies are not being merged by multinational corporations, that is, market share is divided up. After Michelin formed Shanghai Michelin Warrior Tire Company, it plans to build this joint venture into one of Michelin's world's largest passenger car and light duty radial tire production plants. After Bridgestone established its third plant in Shenyang, it also established the Tianjin company. To this end, Bridgestone has four production bases, a training center and two research and development institutions in China. The distribution of Pirelli, Goodyear and other multinational tire giants in China has also been basically completed. Tire giants have established a complete management system in China and they want to use China as a base for global radiation. This example of rapid deployment of high-energy and high-pollution industries in China has become commonplace. In 2006, the export of auto parts with high energy consumption and high pollution accounted for 54% of the total export volume of auto parts in China. From January to May of 2007, the export value of such products accounted for 79.26% of the total exports of parts and components, a large part of which was the products of multinational companies. Multinational corporations have drilled our country's lack of sufficient restrictions on high energy consumption and high pollution industries. Moving the production bases of these products to China can greatly save costs and maximize profits. It will not cause damage to the country's environment. This is the wishful thinking of multinational corporations. Sole proprietorship, holdings as the main investment method At the beginning of reform and opening up, in addition to the introduction of technology, the investment of multinational component companies in China was mainly equity participation. As the Chinese market has become increasingly open, the investment strategy of multinational companies has also changed. Sole investment and holding companies have become the main means of multinational parts and components companies in China. Multinational auto parts companies are eager to establish R&D centers in China. They are no longer confined to providing product development and technical services for multinational and joint-venture vehicle companies, but also extend their reach to local auto companies. Delphi, Bosch, Visteon, Lear, Magna, Johnson, Aisin Seiki, Valeo, and BorgWarner have all set up R&D centers in China. These R&D centers are mostly established in sole proprietorship to ensure their technological leadership. For domestic auto parts manufacturers trying to obtain advanced technology through joint ventures, the sole proprietorship gives them no chance. Multinational companies tend to have a controlling and sole proprietorship for monopolistic products in China. There is a policy of not exceeding 50% of the ratio of foreign capital to the entire vehicle joint venture, but parts and components have no provisions in this regard. Therefore, foreign-funded enterprises control parts and components factories through controlling and sole proprietorship to obtain greater profits. Foreign parties control the core technologies of parts and components and control the profits of the entire vehicle. In 2005, about 4 billion U.S. dollars were invested in China’s spare parts industry. Key assemblies such as engines, transmissions, chassis, and brake systems and related projects accounted for the bulk of the total investment, of which sole proprietorship accounted for Almost 70%. Pay more attention to localization Economic globalization and fierce international competition have promoted the transfer of international industries. Transnational corporations have started to implement localized business strategies in China in order to increase their global competitiveness. They not only use China's abundant labor resources to produce products in China, but also transfer several core parts of the global business network to China, strengthening the localization process in all aspects of production, R&D, management, procurement, and branding. In addition to the transfer of production and manufacturing centers to China, Bosch, Delphi, BorgWarner and other multinational giants have set up R&D centers and regional headquarters in China, accelerating the strategic adjustment of R&D localization. With the expansion of the investment scale of multinational corporations and the improvement of investment level, the original model of decentralized investment and decentralized management has not been adapted to the needs of its development strategy. Localization management has become an inevitable choice for multinational parts and components companies. Pet Chips Csd Grade,Pet Chip Csd,Pet Plastic Raw Material,Pet Chips For Csd Jiangyin jietong international trade company , https://www.jietongpetresin.com
30 years of reform and opening up, China has become a paradise for multinational auto parts companies