Review of new policy may not good for auto parts producers
2012-3-14 0:00:00Author： Xinxin WangFont Size：Big Medium Small
Newly released “Guidance of Foreign Investment Industries" (“Guidance” for short) has come into force since January 30th, 2012. It aimed to transfer focus from "whole car manufacturing" to "development of essential parts".
However, we don’t think that it isn’t a good news for China's local auto spare parts enterprises.
At present, foreign enterprises' share in China’s essential auto spare parts market is as high as 70% to 80%. Chinese enterprises mainly concentrate on non-essential parts market. As foreign parts enterprises are shoving to establish wholly self-controlled enterprises in China, whether local enterprises are losing chances to grow up with foreign competitors￡?
As we observe, there are several three reasons to worry about :
First, lack of core technology.
Most of Chinese automobile parts producers only have processing capacity. Small operation scale, low product added-value and weak market competition ability maintain them at the end of industry chain, not to mention poor core technology.
Second, weak quality control ability.
As for quality control ability, Chinese enterprises still have a long way to go compared with foreign companies. We can not deny the fact that most of local auto spare parts enterprises still rely on low labor cost as its competitive advantage currently. Cheap labor and poor management cause high defictive percentage.
Third, missing chance to grow up with Chinese whole car manufacturing industry.
Chinese auto spare parts enterprises once benefited from rapid growth of China’s passenger car market. But along with “Guidance” carrying on, China’s homegrown car makers will encouter exceptional development, same for Chinese parts enterprises.
Moreover, the U.S. Manufacturers Alliance and some members of American Congress held news briefing on January 31, 2012 to criticize Chinese government’ subsidy for auto industry, which causes damage to American industry. They called on American government to take measures to restrict auto parts import from China.
If American government insisted on conducting anti-dumping, anti-subsidy investigations toward Chinese auto spare parts manufacturers, it will be a fatal strike towards Chinese auto parts industry, especially tire industry.
According to data released by CAAM, auto parts export to American posted $12.8 billion, amongst $2.4 billion was gained by tire parts, exceeding electronic automobile components and engines together.
(Edited by Mo Lin, mol@tireworld.com.cn)
tireworld
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