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Automotive parts companies urgently need to create an international upgrade

January 05, 2023

The year 2016 is the first year of the “Thirteenth Five-Year Plan”. Auto parts companies are also formulating their own "13th Five-Year Plan" development plans. Judging from the plans that have been disclosed so far, internationalization has become the focus of development during the “13th Five-Year Plan” period for auto parts enterprises.

Judging from the general trend of global economic integration, it is wise and necessary for auto parts companies to expand into the international market. However, the author believes that the current internationalization strategy of various companies is slightly monotonous and the level is not high enough. Entering the “Thirteenth Five-Year Plan”, auto parts companies urgently need to create an internationalized upgrade.


The "Thirteenth Five-Year Plan" is the best opportunity period for the transformation and upgrading of China's auto parts enterprises. Judging from the external environment, at present, a new round of scientific and technological revolutions and industrial changes have formed a historic convergence with China’s accelerated transformation of economic development patterns, and the pattern of international industrial division of labor is reshaping. China is actively participating in international economic governance. The “Belt and Road” and “Asian Investment Banking” have created unprecedented opportunities for Chinese companies to “go global”. Chinese auto companies must seize the opportunity to actively participate in the global industrial division of labor and occupy a place in the world auto industry structure.

Judging from the internal environment, the internationalization of China's automobile companies is far from the internationalization and comprehensiveness of auto parts companies. In the export volume of automotive products, auto parts always occupy an absolute majority share of 75%. Moreover, auto parts companies not only have export products, but also have entered large-scale global supporting systems for multinational car companies, frequent international cross-border mergers and acquisitions, and even overseas factories are not uncommon.

However, the current internationalization of auto parts companies is relatively simple, the international perspective is relatively narrow, and the international operating capabilities are still in its infancy. Recently, I heard that a turbocharger company is mainly responsible for the export business because it feels that "the domestic auto three bags are too cumbersome." It was shocked. The domestic sales are worried about the quality problems of the products. They are blamed. Is it possible that exports will not provide after-sales services? Is it service? How short-sighted!

Let's take a look at the “Thirteenth Five-Year Plan” objectives of auto parts companies: Fast is expected to achieve 20% of sales revenue in the international market at the end of the “Thirteenth Five-Year Plan” period; Exquisite tires strive to produce and sell tires during the “Thirteenth Five-Year Plan” period. It has reached 90 million units and has entered the top ten in the world's tires; Hainakawa has to enter the top 30 of the top 100 auto parts companies in the “13th Five-Year Plan” period.

It can be seen from this that most parts and components companies still use scale heroes. Concerned about the international market sales or international trade volume, but the primary internationalization. The American economist Irving Kravis once said that foreign trade is only a “maid” for economic growth. For auto parts companies, product exports are only a small part of internationalization, and now an internationalized upgrade is needed.

The author believes that the internationalization of auto parts upgrades is not a simple product export, nor is it accidental overseas mergers and acquisitions, but a three-dimensional strategy of globalization, global business development. This upgrade has three main features.

The first is innovative products that break through demand. Now the country advocates “many innovations”. This is not a simple slogan but a real business demand. Our country has already gone through the stage of introducing technology and following development. Or that there are not many advanced technologies that can be introduced, and the cutting-edge technologies of international companies will not be sold to us. We have no choice but to innovate independently so that we can go further.

Over the years, Chinese tires and other products have frequently encountered "anti-dumping" blows in the international market, setting aside trade protectionism, and China's tires are still in a stage of low-quality, low-price competition. This is an unavoidable reality. China's auto parts companies should innovate to increase their gold content, break through the low-end market, and meet high-end needs. Only in this way can the problems such as "anti-dumping" be solved, and the creation of Chinese manufacturing can be truly realized.

The second is the integration of resources, foreign use. The internationalization of auto parts companies should be based on their own needs, utilize global resources, enhance the competitiveness of enterprises and develop their abilities, and make global markets, technologies, talents, factories and other resources available to us. The "Made in China 2025" proposes to support the development of a group of multinational corporations and to accelerate their core competitiveness through global resource utilization, business process reengineering, industrial chain integration, and capital market operations.

In recent years, China’s auto parts companies have become more and more frequent in cross-border mergers and acquisitions, but the effect of resource integration after mergers and acquisitions is not satisfactory. After some acquisitions, only the foreign production lines were shipped to China; after the acquisition, the original global supporting customers of the target companies were lost; moreover, the acquisition of international advanced transmission enterprises could not be continued after a few years and they could only be sold again. Out. Therefore, how to make good use of global resources will be the core content of auto parts companies building an upgraded international version.

The third is the international perspective and global layout. With the deepening of the integration of the world economy, the domestic and international markets have merged into one. The truly ambitious automotive parts and components company must have an international perspective and conduct a global unified layout. This goes to a higher level of internationalization - globalization.

According to the view of modern economics, internationalization is a way of designing and manufacturing products that meet the requirements of different regions. It can be mainly understood as localization. Globalization is a concept that refers to the growing global connections, the development of human life on the basis of global scale and the rise of global awareness. Therefore, the ultimate goal of the internationalization of auto parts companies should be: R&D globalization, production globalization, marketing globalization, and after-sales service globalization.

Once there is a global vision and global operating capabilities, real Chinese auto parts and multinational companies will soon emerge. This is much easier than if the Chinese self-owned brand vehicle companies became multinational companies. It is hoped that by building an upgraded version of the international automotive components, China will be able to emerge a large number of multinational automotive parts companies.

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Author:

Mr. Liu Keda

이메일:

syzdhx@163.com

Phone/WhatsApp:

+8613904003748

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Author:

Mr. Liu Keda

이메일:

syzdhx@163.com

Phone/WhatsApp:

+8613904003748

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