Automotive Parts Industry Analysis

  China's auto industry The automotive industry in China has gradually matured, with the number of domestic enterprises even exceeding that of other countries, which shows China's economic strength. With the development of the automotive industry, auto parts have also developed better and better, and the industry has grown year by year.

In 2015, China produced a cumulative total of 24,503,300 vehicles, an increase of 3.25% year-on-year, and sold 24,597,600 vehicles, an increase of 4.71% year-on-year, maintaining the world's top position in production and sales. Due to China's huge automotive consumption demand and significant resource cost advantages, foreign vehicle manufacturers have flocked to the domestic market. At the same time, multinational parts suppliers have also accelerated the pace of building factories in China. With the transfer of vehicle production capacity to China, China's auto parts industry has developed rapidly, and this trend provides a good development opportunity for domestic auto parts enterprises.

According to the analysis data of the auto parts market size, in 2015, the sales revenue of China's auto parts manufacturing enterprises was 3,211.7 billion yuan, an increase of 10.47% year-on-year. In 2016, China's auto production and sales exceeded 28 million vehicles, ranking first in the world for eight consecutive years. Driven by the continuous and rapid growth of China's auto production, sales, and ownership, the size of China's auto parts market has continued to grow. As of 2016, China's auto parts output value reached 3,496.4 billion yuan, with an average annual growth rate of 27%. It is estimated that by 2018, the growth rate of China's auto parts market turnover will reach 7.1%, and the turnover is expected to reach 4,004.7 billion yuan. Since 2012, the proportion of China's parts manufacturing output value to the total auto output value has remained at around 40%.

Development Trend of Auto Parts Industry

After decades of development, China's automotive industry has established a relatively mature industrial supporting system and a huge sales network. However, the policy tendency of "emphasizing complete vehicles and neglecting parts" in the development process has caused parts enterprises to fall into a development crisis of technological hollowing out for a long time. A large number of small and medium-sized parts suppliers face difficulties such as single product lines, low technical content, and weak ability to resist external risks. The sharp rise in raw materials and labor costs in recent years has accelerated the erosion of the profit margins of small and medium-sized auto parts enterprises that rely on low-price competition.

Through the analysis of the auto parts market size, the "Made in China 2025" outline document released in 2016 clearly pointed out that the automotive industry, as a pillar industry of manufacturing, will no longer take capacity and scale expansion as the primary development goal, but will focus on forging core competitiveness and enhancing the ability of independent vehicle and parts enterprises to lead industrial upgrading and independent innovation. Therefore, from the perspective of national policy guidance, the current situation that the development of China's auto parts industry is significantly lagging behind the development of the auto vehicle industry will continue to improve in the future, and there is a large development space in the auto parts industry.