Multinational Auto Parts Enterprises Layout Domestic Recently, ZF, an internationally renowned component supplier, announced that they will establish a joint venture with Beijing Benz to establish an R&D center in China. In fact, ZF's actions are just a microcosm of the domestic production of many multinational auto parts companies. At this year's Shanghai Auto Show, many auto parts companies including Delphi and Bosch exhibited their most advanced products and technologies, and expressed various occasions to strengthen their localization strategies at home.

Follow up on the strategy of international car companies

In fact, ZF is not the only company that has established an R&D center in China. BASF, which has just announced its presence in the automotive market in the Chinese market, has also set up an R&D center in Shanghai and has provided solutions for automotive lightweighting and component materials for domestic self-owned brands.

“Overseas auto parts companies have entered the domestic market and are undoubtedly seeing great benefits.” Industry insiders said that in recent years, the outstanding performance of the domestic auto market has attracted the attention of many international car companies, and they also tend to make more The economic benefits, at this time, the follow-up of parts and components companies can get a share from it.

Some analysts predict that the number of domestic vehicle sales in 2015 will reach 30 million vehicles. If calculated according to the global car ownership of developed countries, China will have a large gap with it. In other words, the future domestic market has great potential.

"And the above data is only the level of vehicle sales, which does not include the production of spare parts needed by the domestic auto market." Experts said that the acceleration of strategic deployment in the Chinese market became inevitable. According to the trend, if domestic automobile brands want to enter the Chinese market on a large scale, it is bound to have localized production in China. With the government's requirement for joint ventures to establish joint ventures, multinational automobile brands also need to establish localized R&D in succession. Under these factors, the localization of auto parts has become inevitable.

In this respect, the Volkswagen brand has set a good example. At present, North and South VW have successively established production bases. Due to the vast geographical area in China, vehicle manufacturers must require parts and components companies to establish spare parts supply clusters around their host plants so that they can better get close to the main plant to achieve timely production work. For component companies, logistics costs have also been reduced accordingly.

Local companies face competition

Although the market has unlimited potential, the competitive localization of foreign big-name parts and components companies will cause existing local parts and components companies to face greater competition and change the existing domestic auto parts industry structure.

On this point, many industry experts deeply agree. For a long time, the domestic parts and components companies have a weak foundation. Prior to this, the scope of domestic parts and components companies' involvement was limited to parts such as automotive parts and non-core electronics and vehicle-outsourcing plastic parts, and some key core parts and components had almost no local company involvement.

“On the one hand, local component companies themselves lack core technologies. In the high-end component sector, domestic companies cannot compete with international companies; on the other hand, many independent brands and joint venture car companies do not want to use products of local component companies. Even if the technical level of individual companies has reached the standard, but if there are choices, many car companies will still use the products of international parts companies." Industry sources said that with the deep localization of multinational companies, they will be strong technology, Strong funds are brought into the domestic market, which will force local companies to lose market share.

However, this may also be a "double-edged sword." Industry insiders say that, like the previous tire industry, competition will cause some companies to be eliminated, but it will also accelerate the merger and reorganization of enterprises and promote growth; moreover, the localization of multinational component companies will provide local talents for the domestic market. In the long run, there will undoubtedly be an increase in the research and development capabilities of local auto parts companies and auto makers of their own brands, and will promote the development of the industry.

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