China's auto market has slowed, it is an indisputable fact that, but the capital market will always have Boyi Zhe. Recently, the three major automobile sector investment of about 4.5 billion yuan have put the item on the parts and components manufacturing.

Dongfeng Company plans to invest 200 million yuan to build auto parts manufacturing pilot base a total investment of 25 million U.S. dollars of Taiwan into a car mold of R & D center set up in Qingdao Development Zone; invest 2.5 billion yuan of new auto parts manufacturing project Kay settled in Yinchuan. State-owned enterprises, foreign-funded enterprises and private enterprises in the automotive industry chain Game of the most upstream.

However, according to industry reports, the automotive industry slowdown, automobile business investment rate of return is lower. The first half of 2008 cars, auto parts section of the gross profit margin was 13.96%, 15.45%, respectively year-on-year decline 1.26,1.47 percentage points.

At the same time data show that the first half of this year, auto parts and accessories industry sales revenue increased by 32.03 percent year-on-year, the growth rate dropped by 3.3 percentage point margin fell 0.08 percentage point, but the total industry profits grew by 36.28 percent, higher than the Income growth.

But on the whole industry's development trend, some analysts believe that "the automobile industry profits are likely to further deterioration of."

4.5 billion capital investment in spare parts

Although the automotive industry has been gradually return to normal, is no longer a profiteering industry, there are still willing to invest the capital market. In the overall lack of investment opportunities in the background, businesses have to look on the parts of investment.

The end of July, economic and technological development zone of Yinchuan greet new guests, economic and technological development zone of Yinchuan CMC and Hebei Xinkai Automobile Group held automobile production project cooperation agreement signing ceremony. The signing ceremony, autonomous regions, Yinchuan City officials attended the signing ceremony that introduced the importance of this.

According to the project agreement, the new Kay Automotive Group in the economic and technological development zone of Yinchuan invest 25 billion yuan, the building of cars and light vehicles stamping, welding, painting, assembly, engine production line and other top-five car industry chain supporting the project. Xinkai Automobile Group is principally involved in production of cars, auto parts processing, real estate development, chemicals, and other fields, has built more than 10 of the advanced level of the domestic auto welding, painting, assembly, testing and other modern production lines.

There is also a major investment is the entry of Taiwan-funded enterprises. Recently, a total investment of 25 million U.S. dollars and registered capital of 10 million U.S. dollars of Taiwan into the car mold research and development centers set up development zones. The project started construction during the year, production in 2009, Dachan Hou is expected to achieve annual sales income of 1.2 billion yuan.

It is learnt that the Taiwan Co., Ltd. in a metal factory in the northern markets open up a strategic decision, the decision will be China Taiwan's automotive R & D center moved to die Qingdao Development Zone, the construction of the North's largest automobile molds, accessories R & D and production base, mainly Beijing Mercedes-Benz, BMW Brilliance Shenyang, Qingdao and Shanghai, and other five companies.

Taiwan into the metal factory Co., Ltd. was established in 1955, is the automobile industry in the production of large panels, injection mold of the well-known enterprises, Ford global procurement system in China Taiwan's main supplier.

In addition, the Dongfeng company plans to invest 200 million yuan, with a new three-year period covering 300 acres of auto parts to create the pilot base, when completed, the estimated annual processing of waste can be recycled and 50,000 vehicles, scrap materials 100,000 Tons, to manufacture 100,000 sets of parts and components.
At present, annual domestic car scrapped amounted to more than 300 million vehicles, if we can achieve these products to manufacturers, these products would greatly reduce the negative impact on the environment, energy conservation and cost effective. According to the National Development and Reform Commission issued the "recycling of automotive products and technology policies", 2012, all China-made cars and imported cars recyclable utilization rate to 90 percent, of which the re-use material not less than 80 percent. Currently, the east has been in the east Hongtai, Dongfeng Cummins re-create the pilot.

Parts and components industry slowdown

According to data of the National Unification Council, 2008 from January to May, automobile spare parts manufacturing enterprises realized 367.7 billion yuan sales revenue, an increase of 32.35 percent, the growth rate than last year, 1-11 in the 37.45 percent drop 4.1 percent total profit 24.6 billion yuan, an increase of 36.63 percent, the growth rate than last year, 1-11 in the 68.61 percent drop 32 percentage points.

Gross margin, the 2008 January-May, automobile spare parts manufacturing enterprises gross margin 14.59 percent more than last year 1-11 in the 14.95% drop 0.36 percentage points. Cost rate, the 2008 January-May, automobile spare parts manufacturing companies for rate 7.95 percent more than last year 1-11 in the 8.67 percent fall 0.72 percentage points. And vehicle manufacturers similar to automotive parts manufacturing companies current cost levels in 2002 the lowest level since.
According to Center Daily News, 33 auto parts and accessories listed companies to achieve a total sales income of 59.93 billion yuan, an increase of 31.02 percent, below the industry growth rate of about one percentage point, a total profit of 4.65 billion yuan, an increase of 27.56% , Below the industry growth rate of profits and sales growth. 6 (excluding the Yellow Sea ST) tire and rubber companies to achieve a total of 14.335 billion yuan of business revenue, an increase of 16.20 percent, higher than the growth rate of industry sales. A total profit of 417 million yuan, an increase of 0.22 percent, below the industry growth rate of profits and sales growth.

Analysis The main reason is that the first half of 2008, raw material prices have experienced a sharp rise. Brent crude futures for the main force from the end of 2007 of 93.85 U.S. dollars / barrel up to the end of June 2008 of 143.91 U.S. dollars / barrel, or 53.34 percent. Shanghai Futures Exchange main contract price of natural rubber from the end of 2007 of 24,000 yuan / ton shocks has been high, to the end of June 2008 reached 27,600 yuan / ton level. 2008 steel prices in the first half of the year-on-year growth rate of about 40 percent.

The industry believes that the auto manufacturers to directly face the rising prices of raw materials, making its profit growth, gross margins are corresponding decline in the first half of commodity raw material prices high background, including the United States, Europe, Japan, etc., Developed countries and regions cool down the economy, makes automotive parts manufacturing industry slowdown in external demand, which also dragged down the auto parts business income growth.

Guangfa Securities analysts believe that the current valuation of the auto parts industry is relatively reasonable. PE from the point of view, A-share market auto parts enterprises to 20.47 times the average PE, and the Americas, Europe and the Asia-Pacific mature types of enterprises with the average PE were 16.7,12.9 and 10.8 times. From the perspective of the PB, A-share market auto parts enterprises was 2.17 times the average PB, and the Americas, Europe and the Asia-Pacific mature types of enterprises with the average PB were 1.77,2.47 and 1.26 times.

But that Guangfa Securities, the current valuations are relatively reasonable but has not underestimated, given a rating of automotive components segment.