The matching market is a strategic highland for auto parts

The domestic matching market is the battleground for the auto parts companies. However, the complete vehicle market is also a relatively difficult "fortress." The topic of public relations is to begin with the qualification of prototypes. After many approvals including sample prototypes, tooling samples, and small-volume supplies, it is only possible to enter the imported parts catalog to “reduce goods”. The whole process often takes two or three years. Even so, from the 1980s onwards, the matching and tough battle of auto parts companies has never subsided. Only in recent years, the parts and components supporting systems of various car companies have been gradually improved, especially the implementation of the platform strategy, the sharing of auto parts is relatively common, so the supporting market is also relatively stable. A considerable number of companies have turned their energies to developing overseas markets. In the current global financial crisis, the aftermarket has become a new hot spot. However, no matter how mature and stable the supporting market can be, it can be described as a strategic highland where auto parts and components must compete. And with the steady growth of car sales, the supporting market is expected. Therefore, it is necessary to make an analysis of the domestic auto parts supporting market.

Composition of the supporting system

According to the different capital sources of domestic vehicle companies, the supporting system can be roughly divided into four categories: autonomous, Japanese, European, and American. In these systems, their supporting systems also have their own characteristics.

In any kind of supporting system, independent suppliers dominate, while almost 100% of American cars are supplied by independent suppliers. The rest are European and Japanese. 22% of the auto parts suppliers in the autonomous models have capital relationships with the OEM.

If the suppliers of parts and components are divided from the basic properties of the entire vehicle factory, the supporting suppliers of the joint ventures will be mainly foreign-funded parts and components enterprises. However, in recent years, in order to reduce the cost pressure brought about by the market price war, many joint venture car lines have also adopted a considerable number of reliable private auto parts products.

However, the main suppliers of Japanese-funded enterprises are mainly Japanese-owned parts and components companies, accounting for 80% of the suppliers, indicating that the Japanese system is extremely closed. This performance is even reflected in the aftermarket. Due to the strict management of the main engine plant, these Japanese auto parts companies have even refused to supply to the aftermarket channels other than the Japanese car 4S shop. Of course, most of them are still "don't dare."

This has also caused the production capacity of some large-scale Japanese parts and components enterprises to be surplus. Once the main plant is not in a good condition, the subordinated parts and components companies have also suffered. As the saying goes, "put eggs in a basket." In terms of supplier selection, the European and American vehicle system is relatively open. However, due to high profits in the after-sales market, vehicle companies also have stricter management in an attempt to create a monopoly. The autonomy department is mainly based on domestic suppliers. From this point of view, the development of self-owned brand models has significant implications for driving the development of national brand auto parts companies.

Supplier selection and cooperation stability

In addition to the capital constitutional factors, the entire vehicle company selects suppliers, and pays more attention to product quality, R&D capability, manufacturing level, and cost control. If the evaluation of these factors is the most important with 5 points and the 1 point is the least important, then the different values ​​of different vehicles in different cars can be seen in the following table.

In general, regardless of the system of automotive manufacturers, their cooperative relationship with major suppliers is relatively stable and will not be easily replaced unless there are serious problems such as quality defects. After the product was put on the market, the replacement of the main distributor accounted for only 5%. The main distributor refers to the supplier who has the largest amount of supply in each auto parts category.

Synchronous R&D involvement

Judging from the formation of supporting systems for each vehicle series, Japanese and European auto parts suppliers have acquired an important position in the development of new products. The role of autonomous and US-based suppliers is relatively small. However, in general, joint ventures have involved auto parts suppliers in product design early in the development of models, and the time for parts suppliers of auto brands to participate in research and development has lagged behind. This may be due to the high percentage of “used” and “referenced” components in the self-owned brand vehicles. I believe this trend will gradually change in the future.

In addition, European and American car lines determine the main suppliers more time. Japanese companies have already identified the main supplier even before they sampled.

Price and Quality Control

Cost control is now an important goal of major auto companies. This is to make the new car has a strong price competitiveness as soon as it is listed. Therefore, as early as the product development stage, the vast majority of vehicle companies have firmly controlled the cost. As for the launch of new products, the actual supply cost of auto parts has been lower than the previous target cost, and the purchase price of auto parts auto parts has dropped the most after the listing. This may also be due to market competition.

However, it is not a good thing for car companies to continuously reduce the supplier's matching prices every year. In the case of price increases on materials and the compression of purchase prices under the two conditions, there may be so-called “spoofing”. Specifically, material material labels, dosages, processing techniques, etc. will all aim to reduce costs, in order to cope with the price reduction behavior of OEMs. In this regard, the relationship between Japanese car companies and parts and components companies is relatively well handled. While strengthening cost control, more emphasis is placed on quality control, production process control, and improvement. Japanese companies appear to be better.

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