Dong Jianping: Component Enterprises Should Go Out to Acquire Core Technology

"In order to further improve the financial strength of small and medium-sized auto parts enterprises, the state should create conditions for the listing and financing of leading auto parts enterprises." This is a suggestion made by the deputy secretary-general of the China Automobile Industry Association, Dong Jianping. On November 25th at the 10th China Automotive Industry Development Summit Annual Meeting held in Baotou City, China, and the 2012 China Automotive and Component Market Analysis and Forecasting Conference, Dong Jianping raised the level of technology and breakthroughs in foreign companies in China's auto parts enterprises. He put forward his own opinions on the monopoly of core technologies.

Dong Jianping explained that since the Chinese auto market is completely open to the outside world, almost all foreign well-known auto parts companies, including the Global 500, have entered China with complete vehicle companies, and have formed independent and complete parts and components with complete vehicles. The system has made the Chinese automobile market the most competitive market in the world. Locally-owned auto parts companies are mainly targeted at domestic autonomous automakers. The automaker’s products are at the low-to-medium end of the market, and their use of autonomous auto parts companies is insufficient, and their product technology, quality, and management The improvement of the overall quality does not play a very good role in promoting. Therefore, the core technology of most of the key components still controls the hands of foreign companies and the domestic market lacks a complete, stable and harmonious component supply system.

At the same time, China's automobile-related industries have not yet been able to effectively support the development of the auto parts industry, such as automotive basic raw materials (rubber, chemicals, etc.), electronic components, high-end mechanical parts and molds, **, etc. Imports have uncontrollability in terms of both supply and price protection.

Dong Jianping pointed out that despite China’s entry into the WTO, China’s auto parts and components exports have greatly increased. In 2010, the total export value reached US$36.6 billion, which was more than 30 times before the accession to the WTO. However, it is in the core areas of automotive technology, especially with respect to vehicle safety and energy saving. The electronic control technology related parts and components related to environmental protection also lag behind. This part of the products and technology is basically still in the monopoly of multinational companies, which seriously restricts the technological upgrading of China's independent enterprises and the products entering the high-end market.

Since the growth of the domestic auto market has slowed down this year, market demand has decreased, and competition has intensified. Foreign-funded enterprises are also developing low-cost products while continuing to expand into the low-end market while maintaining the original high-end product market. At the same time, the Chinese auto market continues to attract foreign auto parts companies, including non-mainstream auto parts companies. The market space for auto parts companies has further narrowed, the competitive pressure has increased further, and the risk of being marginalized has further increased. .

In view of the various unfavorable factors mentioned above, Dong Jianping believes that the most effective way to introduce domestic auto parts enterprises is to acquire small and medium-sized parts and components companies that have certain core technologies in Europe and the United States. These enterprises not only possess certain core technical capabilities, but also possess A considerable number of brands and goodwill, but also has a good upstream and downstream customer relations and marketing network, the need for a certain strength of the Chinese parts and components companies in a global perspective of active international development.

Since China’s auto parts market is completely open to the inside and outside, domestic and foreign-funded enterprises all enjoy the same policy, so Dong Jianping suggested that the host country should formulate more preferential incentive policies for domestic-funded enterprises and support the powerful and qualified enterprises to be bold “ "Going out" to invest in foreign auto parts industry entities, the relevant state departments should further simplify the procedures for the approval of foreign investment, and organize supporting foreign affairs, legal, financial, financial and other professional organizations to provide assistance and services for SMEs.