At the 110th Canton Fair, the reporter learned that due to weak external demand, trade protection and other reasons, China's auto parts industry has experienced a decline in export transactions, and the export situation in the short term is not optimistic. According to the analysis, competition in the industry will become increasingly fierce in the future, and the industry will shuffle or be difficult to avoid. Enterprises should make more efforts to improve the technical level and product quality so as to avoid being eliminated.

The decline in exports is not optimistic in the short-term data show that China's auto parts exports have grown faster this year. According to customs statistics, from January to July this year, the total value of China's auto and auto parts exports was US$22.86 billion, an increase of 33.3% year-on-year. Among them, the cumulative export value of engine components, transmission system components, brake system components, driving system components, and steering system components were respectively 2.739 billion, 1.382 billion, 2.054 billion, 10.38 billion and 527 million U.S. dollars, which was equivalent to the same period of last year. It increased by 36.45%, 25.44%, 25.19%, 37.40%, and 39.58%, respectively.

However, the sales data of auto parts at the 110th Canton Fair was not optimistic. Auto parts are one of the major products of the first electromechanical museum of the 110th Canton Fair. In the first three days of the first phase, a total of 458 million U.S. dollars were sold for auto parts, which was 4.8% lower than the same period of last year.

From the perspective of buyers’ attendance, there are fewer European and American merchants present at the Canton Fair. Sales staff of several auto parts companies, such as Wanxiang Import and Export Co., Ltd. and Chery Automobile Co., Ltd.’s engine sales company, have told reporters that The number of European and American merchants who came to their booths this year to consult was significantly reduced. Some countries in the United States and Europe are the main export markets for auto parts in China. Affected by the economic crisis, Europe and the United States have a sluggish economy, or are the main reason for the lack of European and American merchants.

In addition, some companies have reported that the continued appreciation of the renminbi and rising raw material costs have caused prices of auto parts products to rise. Ji Peiwei, sales manager of Wanxiang Import and Export Co., Ltd., said that the prices of products exported by the company at the current Canton Fair have increased by 10%-20%.

Exports face three major problems The reporter learned from the survey at the 110th Canton Fair that the impact of the current global economic crisis has not yet been dispersed, the economic situation of the major economies remains unclear, and the demand for automobiles and parts is weak. At the same time, China's auto parts exports are still facing the following major issues.

The first is the overcapacity of domestic low-end products, and the vicious competition in price reduction is serious. Wang Baohong, manager of Guangdong Machinery Import and Export Co., Ltd., said that there are too many auto parts companies in China and there is a pattern of “small disarray”. Local protectionism is prevalent and local production lines all over the country. Repeated construction is serious. The consequence is to drive down prices or to cut down on the quality of products, and to compete at a low price.

The second is the lack of core technologies and the poor ability to develop key components in synchronization. According to Ji Peiwei, the current auto parts industry lacks core technology and is still in the imitation stage and primary stage. If foreign auto companies give sample parts and parameters, domestic auto parts companies can develop production on schedule; however, if they are developed synchronously with the entire vehicle, most companies will have a hard time keeping up. On this point, there is a gap between China's auto parts companies and large foreign companies in the same industry. Wang Baohong also believes that many companies basically do according to samples, but they lack the core parameters and products can be used, but the quality is difficult to guarantee.

Third, trade protection and export laws and regulations have restricted exports. Ji Peiwei, for example, said that bearings faced great resistance when they exported to Russia, because they imposed anti-dumping measures on China and the tax rate was as high as 42%. This trade protection act also exists in Brazil and other countries. In addition, some countries have delays in exporting their products for customs reasons due to political reasons. For example, in Iran, every batch of products exported there must be inspected.

These problems have brought obstacles to the export of China's auto parts industry, and the industry itself has also become a bottleneck.

Reshuffle in the industry is unavoidable According to reports, the United States sold 6.333 million new cars in the first half of this year, an increase of 13%. However, due to the high unemployment rate and the European debt crisis, the economic prospects are not clear, and it is expected that there will be no significant increase in demand. In the first half of the European countries, the sales of cars in the first half of the year were 6.97 million, a decrease of 2%. Germany, with a rapid economic development, increased by 11%, Sweden and the Netherlands increased by 1-2%, Greece decreased by 40%, Portugal decreased by 20%, Spain by nearly 30%, and consumption in southern European countries was depressed.

In the first half of this year, the global demand for cars slowed down. The current international economic situation is still uncertain. Affected by this, it is expected that the outlook for China's auto parts exports will be poor this winter and next spring.

While the external environment is unfavorable, Yao Wenping, vice chairman of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, also believes that the domestic auto parts industry is inevitable to reshuffle. She said that simply relying on export tax rebates and other policies to upgrade an industry will not work. Policy support is effective but it is lagging behind the development of the enterprise. In this lag, before forming an industrial cluster and forming a good foundation for industrial development, enterprises must be forward-looking and have the consciousness of independent innovation.

Moreover, the localization trend of the automobile manufacturing industry is becoming more apparent, which will further aggravate the fierce competition in the domestic auto parts industry. Fu Zhongsen, president of the China-Britain Business Council, said in an interview with reporters at the Canton Fair that more and more companies in the UK have shown interest in developing markets in China. This has become a trend. At present, some British companies have tended to move some high-tech manufacturing with high technological content, such as auto parts manufacturing, to China. Yao Wenping believes that many large car companies such as BMW have invested and built factories in Shenyang and other places in China, and that multinational car groups have entered the Chinese market, making Chinese auto parts companies more deeply integrated into the global automotive industry chain.

Ji Peiwei said that competition in the auto parts export market has become increasingly fierce. In the past, low-end companies still made profits, and now low-end products have low profit margins, and companies are forced to develop high-end products. High-end products are embodied in more independent research and development patents. He suggested that SMEs expand their markets and accumulate funds. On the basis of having a certain amount of financial strength, on the one hand, it has increased its own research and development efforts, and on the other hand obtained overseas advanced production technologies of auto parts and components through overseas mergers and acquisitions.

Some domestic auto parts enterprises have already had a relatively clear understanding of the situation and are striving to increase investment in research and development. Huang Wentian, marketing director of Chery Automobile Co., Ltd.’s engine sales company, said that the company pays great attention to R&D investment, and some technologies have reached international standards. The company pursues its goal with excellent companies in the same industry in foreign countries and gradually adapts itself to international standards through independent research and development.

As a typical example of successful overseas mergers and acquisitions, the experience of Wanxiang Group, the largest auto parts manufacturer in China, is also worth learning from domestic auto parts companies. According to Ji Peiwei, Wanxiang started from the blacksmith shop and after decades of efforts, it has become a leader in the industry. In recent years, Wanxiang has acquired some of the best auto parts companies in the world, such as the acquisition of some shares in American AI Corporation, and has absorbed its advanced technology through acquisitions. Wanxiang is also a first-tier supplier of large-scale car companies such as Chrysler and General Motors, and these companies have taken a large share of the U.S. market.

In addition, Wang Baohong also believes that the role of industry associations in reorganizing the auto parts industry should be strengthened. Trade associations can effectively regulate the market order and guide the orderly development of the market by formulating measures such as product production standards.