"I hope that you will help us clarify the facts." Recently, PAC Group Chief Executive of China's summer headquarters for Nuozi (ShahFiroozi) sincerely to the Chinese media said.

     PAC would like to clarify what the facts » In fact, in the meantime, China's auto parts industry and the automotive industry caused a great uproar.

     Is only a misunderstanding »

     May 2008, "16 billion U.S. dollars large-Pangla, Made in China being marginalized," and "no longer cost advantage, China lost hundreds of billions of parts or orders," so the title of one after another thriller in the major media in the country's important Layout, the 16 billion U.S. dollars, this figure alone is sufficient to shock. These reports cited the fact that from a company - the global consulting firm PAC Group. The provision of a survey data showed: North America, sales of the three largest automobile manufacturers, 2008, the procurement of spare parts in China than originally anticipated decrease of 8 billion U.S. dollars up to 2010, a total decrease of 16 billion U.S. dollars (about 110 billion yuan). If the real data, the loss of hundreds of billions of orders, in terms of China's automobile manufacturing industry is very serious consequences. This triggered a trade for the automotive industry, "Made in China" worried about the future.

     "This can not be," "is a joke," and "translation problems", "communication error." "This kind of figure I am Yitouwushui, because Ford automotive parts procurement in China every year in the amount of solid growth." This is the report as one of Ford China, Xu Guozhen, vice president of that figure after the first A response.

     If report said, only three car makers in 2008, matching the amount of reducing by 80 billion dollars, already matching the total amount of 17 percent (in the mainstream, multinational companies have 11 cars: GM, Volkswagen, Toyota, Nissan, Honda, Ford, Peugeot - Citroen, Fiat, BMW, Dai ¨¡ grams (Resolution), Hyundai), which no doubt to be included in the auto industry "red alert" areas, then how To look at the data authenticity »

     In a series of tracking, data issued by the data have to admit that there are unreasonable places. PAC Group Chief Executive of China's summer headquarters for Nuozi explained that the previously reported existence of errors: First mentioned in the investigation of the three major automobile manufacturers in North America refers to the three major automobile manufacturers, namely General Motors, Ford and Klein Faessler, and not Toyota; Second, the conclusions of the data is not directly multinational companies to reduce procurement volume in China, but by 2005 transnational Motor Company announced the expected amount and the actual purchase of procurement that the projected shortfall.

     Of course, "This is not very scientific method of calculation, but we really would like to explain some of the problems: local car plant in China developed rapidly, matching the increase in demand, the appreciation of the renminbi, and other objective factors, China's R & D of spare parts suppliers Capacity and quality is still not up to the requirements of multinational companies, I hope you will help us clarify the facts. "Thank God, finally clarified the matter, this is a misunderstanding. But even a misunderstanding, there are also people reflect on the deep meaning, even if there are mistakes in the conclusions of data elements, it also means that China's auto parts industry can sit back and relax? »

     Is the loss of market

     "Now the export business more difficult." Just "2008 Shanghai International Auto Parts Exhibition" to return to the Taizhou Mr. Zhou clear that there is some frustration, he obviously felt the pressure from the international market. Mr. Zhou in a special after-sales market for automotive water pumps and matching pumps for the Taizhou providers engaged in foreign trade work. He recalls that in the 2002 to 2005 the so-called "golden stage", the company's gross profit margins of domestic exports were more than 30 percent, to 2006, the situation came, basically in. Michelin such as the large parts enterprises, with the industrial chain on the lower reaches of the bargain, can transfer some of the pressure of rising costs. By contrast, "Mr. Zhou were" on the strength of the rival, especially those export-oriented and market local service providers, the reality is very worrying situation.
 
    RMB appreciation, rising raw material prices, changes in tax policy, labor costs increased, the new "Labor Contract Law" promulgated, new environmental regulations and higher oil prices caused the rise in the cost of logistics, parts and components that affect the global competitiveness of China's seven major elements. - New "Labor Contract Law" promulgated one, it will lead to rise in the cost of parts and components manufacturers of 20 percent. Low value-added products and materials, such as raw material consumption of larger products, is the most obvious loss of competitiveness of the two major categories of products. Although China's current situation and the mid-1980s when the yen's appreciation is very similar to (the appreciation of the renminbi, the domestic demand, etc.), but the biggest difference is that the then Japan has become the world's biggest exporter of cars.

     "China's automobile and spare parts in the technology and export has not yet become a major country, but production costs have already increased." Industry veteran said.

     Transnational auto companies in China to delay the procurement performance, a survey report shows that multinational companies in China in 2007 the results of the procurement was not as optimistic as expected, almost 80 percent of the company have not reached the procurement volume in China And procurement costs drop goal. One can be sure of the fact that the vehicle procurement base of transnational corporations are gradually transferred. According to reports, the Fiat Group in New Delhi, India has set up a global procurement office, is expected in 2008, will purchase 30 million euros worth of spare parts, plans to 2010 this goal will be upgraded to 250 million euros. And 2007, the Fiat Group in Shanghai, has just opened a similar procurement offices. Fiat originally planned in 2008, the value of the procurement 500 million euros (5.42 billion yuan) of spare parts, initially hoped to 2010 purchases will rise to 1.5 billion euros, but in India the establishment of the Office of Procurement, procurement in China To reduce the amount of 1.2 billion euros (13.01 billion yuan).

     It is reported that BMW is the establishment of an international procurement center in New Delhi to purchase auto parts, IT software and automotive engineering services. The company is currently working with India over the local automotive parts manufacturers to conduct negotiations in order to expand procurement of spare parts in the Indian channels and variety. Not long ago, the company has just purchased a small number of Indian car driver and car door handles, and so on.

     But for the majority of local suppliers, and lost due to poor ability to multinational corporations in China procurement orders is not what is fatal, the most frightening thing is that now even on the domestic market own-brand enterprises have begun to abandoned their own products This is the vision into a cruel reality. The development of the brand constraints of Geely, Chery and other own-brand enterprises in order to shake off the image of cheap, low quality, to begin in product quality, know they have taken to reduce the number of suppliers and joint ventures with foreign components to the strategy of trying to Parts links strengthen product quality assurance, and the production of low-end products of local parts and components are also automatically be excluded from the list of its major customers outside. Once the provider to target due to cost control, vehicle plant eliminated, affecting more than one order, to some extent it will be seen as being "completely Darulenggong." If the trend continues accordingly, autonomous vehicle was also inevitable, "Kabo Zi" - does not have its own system components, and in key parts procurement dependent on foreign investment, the autonomous vehicle will gradually lose their cost advantages, the Chinese The independent auto industry, is a cause for concern.

     "Marginalized" to show concern

     Related statistics show that the current foreign investment in China's nearly 500 parts and components enterprises, including Visteon, Delphi, such as BorgWarner and the world's top 500 transnational companies, parts suppliers, without exception, are in China has set up joint ventures or wholly owned enterprises. , The trial of strength in foreign investment, mostly from local suppliers in China, has become increasingly marginalized.

     A typical example is that almost all the domestic enterprises are the core components of transnational corporations in the form of wholly-owned or controlled monopoly. According to statistics, foreign investment in Chinese auto parts market has accounted for more than 60 percent of the share, and in the car parts industry, some experts have estimated will reach more than 80 percent.
In addition, automotive electronics, and other high-tech products as well as engine, gearbox and other core components, and other key areas, foreign control of the market share even as high as 90 percent.
     This situation formed one of the main reasons is the lack of protection policies. "Restructuring of light," seems to be China's auto industry policy has always been the characteristics of the accession to the WTO, parts and components industry is the most was pushed to the front, when the vehicle is still in the "50% 50% restricted shares than the" policy Protection, parts and components already achieved a very early to open. Once the policy constraints and for the Chinese market parts giant naturally more willing to choose solely owned or controlled.

     According to a survey conducted recently, parts of transnational companies in China in research and development, localization of procurement, manufacture and sale of these four important part of the localization level far higher than the car factory. With foreign investment in China localization of parts in-depth, which will further squeeze the survival of local manufacturers. Most local parts manufacturers have not formed their own technological superiority, even if some of the current business days of live reasonably well, but still remain in the low-end products or marginalized, while the core parts and components market is almost entirely dominated by foreign-funded enterprises. This means that the owners have to support the profits of the foreign capital flows. Local parts and components suppliers, has in fact put itself in the interests of a vulnerable chain.

     Threat not only here. From India's "cost killer" Tata have already entered parts of the factory in Nanjing, and this called the "Nanjing Tata automotive components Systems Limited," the factory has quietly started to GM and Changan Ford Mazda supply The interior.

     BorgWarner (China) Purchasing Department minced no words in the official said, BorgWarner nearly 70% of suppliers from mainland China, but only 30 percent of the suppliers may shortlisted core ranks of suppliers, other "Sooner or later have to be eliminated."

     It is understood that in parts and components suppliers in the ecosystem, in accordance with the division of different size and strength, may generally be divided into three levels: the Tier1 (level) for the automotive systems supplier; Tier2 for automotive assembly / module suppliers; Tier3 Is the auto parts / components suppliers. "Most of the local parts and components of domestic enterprises, are Tier2 and Tier3 camp, nominated almost no Tier1. Tier1 the camp is almost Bosch, WEI Shi-Tong, Delphi and other transnational enterprises parts of the world, while local enterprises are mostly raw materials Production, low technology content, labour-intensive production methods Tier3 small parts suppliers. Is not sufficient competition in the domestic market, or encourage or protect the policy is not in place before the local parts and components today's "passive" situation »

     With the price advantage in domestic and overseas markets to fight a Xuelu of China's auto parts supplier, suddenly found they had been cornered the reality of life and death edge, a clear signal that the local parts manufacturers for the survival of low-cost Advantages are radical (R) loss of speed. In less than a year, some of the cost of domestic exports of parts and components increased 16 percent, the Chinese parts of the manufacturing cost is no longer cheap.

     But also parts suppliers worried about is: With the appreciation of the RMB and the export tax rebate rate of decline in procurement in China will face greater pressures, many international buyers Yiqingbielian, attention has shifted to a more price advantage of Vietnam , India, Thailand and Australia and other countries and regions, which are heavily dependent on international procurement suppliers fell into the abyss of death.