Self-made self-provisioned zero supply chain
At present, China's auto industry has established itself as a big country in terms of manufacturing capacity and market size. However, there is still a huge gap between the development goals of industrial powers. Among them, the overall strength of the parts and components industry is not strong is one of the important factors that restrict the healthy and sustainable development of China's auto industry.
According to statistics, there are 5,000 enterprises above designated size for auto parts and components, and the total industrial output value is about 600 billion yuan. The number of employees is about 1.3 million. If small non-state-owned enterprises are added, the total number of enterprises will reach 20,000 to 30,000. Although the parts supply chain is changing to socialized and specialized supply, it has long been in a “subordinate†position in the entire vehicle industry, and the current relationship between vehicle and parts and components companies is a strategic and sustainable development. There is a huge gap between the zero-to-zero relationship. The zero-sum relationship is not optimistic.
Starting from this issue, this series of articles on the relationship between the development of Chinese vehicles and parts and components of this column will be serialized to help readers understand the development of China's auto parts industry.
The "big and small" in "large and complete" and "small and complete" refer to the relative size of the company's scale and production capacity; "all" refers to the many and comprehensive homemade products. In fact, this is a derogatory term. General refers to the unreasonable mode of enterprise construction before the reform and opening up.
Since China's first automobile manufacturing plant was built in 1953, the auto parts supply chain has followed. The production and management mode of the early automobile industry was based on the vehicle factory. The automobile factory was also the manufacturer of parts and components. It was a comprehensive “large and complete†enterprise. Take FAW as an example, in addition to manufacturing “Liberation†brand medium-sized commercial vehicles and “Hongqi†brand passenger vehicles, it also produces engine, transmission, clutch and other assembly components, as well as general parts such as water tanks, wheels, and pistons. Self-control rate of 70%. There are altogether more than 400 types of parts and components in 15 major categories, including tires, glass, bearings, and batteries.
After FAW was established, Nanjing, Shanghai, Beijing, Jinan and other places completed the construction of vehicle manufacturers. At the same time, according to the “big and full†model, the formation of a number of “workshops†for auto parts was formed, forming a “small and completeâ€. "The business.
From 1953 to 1966, it was the beginning stage of China's spare parts industry. According to statistics, in 1966, the total number of auto parts enterprises in the country was 520, with an output value of 690 million yuan (original price) and a total vehicle output of 56,000. The zero-to-zero relationship in this phase has three characteristics: First, the vehicle company is mainly self-employed (internal allocation), and the self-control rate is as high as 70%; secondly, it is supplemented by external procurement. At that time, in order to resettle employment and seek a balanced economic development, A number of parts and components factories are also arranged in different places; Third, the fragmentation phenomenon is more obvious. The automobile industry is mainly engaged in mechanical processing (iron and steel products), but it involves rubber (chemical industry), textile (light industry), glass (building materials), etc. Products do not belong to the Ministry of Machinery (Ministry of Heavy Industry, Department of Machines) management, and factories naturally do not belong to vehicle companies.
In the late 1960s, the Central Government organized the construction of the second automobile manufacturer, and the site was selected in the mountains of Hubei Province in Shiyan, according to the idea of ​​"preparation for war."
The parts and components were built in cooperation with Shiyan to build a number of factories. At the same time, in order to accelerate the construction speed, the company selected 126 suppliers in 19 provinces and cities across the country in order to adopt cross-selling and ordering methods.
In this period, Tianjin, Shenyang, Chongqing, Xi'an, and other areas completed and put into operation a "local state-owned" vehicle production company. The country’s automotive product categories have also evolved from the original mid-tonnage commercial vehicles to the automotive industry with small-scale heavy-duty commercial vehicles, light vehicles, off-road vehicles, and passenger vehicles.
By 1980, there were 2076 auto parts companies with an output value of 2.85 billion yuan (original price) and a total vehicle production of 222,000 vehicles. There are three characteristics of the zero-to-zero relationship in this stage: one is the “big and full†construction model, the supply chain is mainly self-made and self-provisioned, and the second is the emergence of an independent supplier in the machinery industry, that is, not belonging to any vehicle company. , for a number of vehicle manufacturers supporting, independent, professional parts production companies, such as Beijing Internal Combustion Engine Plant, Jinan Parts Factory (valve), Wuhan Auto Parts Factory (piston ring), Zhangdian Spring Factory (leaf spring ), Binzhou Piston Factory, Qingdao Universal Joint Factory, etc.; Third, the entire vehicle industry can be summarized as "deficient, less light, and no cars."
From the rapid expansion of the supply chain to global procurement
In 1978, China established a basic national policy of comprehensive reform and opening to the outside world. The automotive industry has entered a new phase.
In 1983, Beijing Automotive Manufacturing Plant and the United States Jeep Company (later incorporated into the United States Chrysler Corporation) jointly established China's first vehicle company - Beijing Jeep Automobile Co., Ltd., marking the official start of China's auto industry reform and opening up, foreign cooperation .
In June 1984, the “Automotive Parts Industry Start-up Conference†was held in Shanghai. This was a milestone meeting in the history of China’s auto parts industry. The meeting put forward the “localization†of introduced models for the first time, and made the first time for parts and components. Advance ahead of the development of the vehicle, build a batch of high-level, professional, high-volume components pioneer companies.
Subsequent “Five-Five†to “Nine-Five-Year†Five-Year Five-Year Plans have all increased the investment in the parts and components industry, together with the “one-stop†measures for the localization of cars. The parts industry has been developing rapidly.
By the year 2000, there were 2,496 parts and components enterprises with an output value of about 110 billion yuan and a total vehicle output of 2.068 million vehicles, including 700,000 cars. There are four main characteristics of the zero-to-zero relationship in this phase:
First, the modern automobile industry with the car as the core is beginning to be established, and the parts and components industry has changed from the commercial vehicle to the passenger vehicle.
Second, the supplier’s manufacturing capabilities, management capabilities, and product technology content have been comprehensively promoted through joint ventures and cooperation and technology introduction.
Third, OEMs have adopted double, three, or even multiple distribution methods to ensure the supply chain is safe and reliable. That is, the same product is produced and supplied by a number of companies, and orders are assigned according to the basic principle of “who is qualified first and who has a larger market shareâ€.
The fourth is the diversification of corporate forms in the supply chain, and private enterprises have gradually become the mainstay of the supply chain. In the supply chain business model, it mainly includes: global procurement, products from overseas; foreign-owned enterprises in China, such as Guangzhou Japanese-funded parts and components enterprises; Sino-foreign joint ventures such as Shanghai Yanfeng Visteon and United Electronics. The wholly-owned vehicle manufacturers, such as FAW Fuao (has been controlled by private enterprises Zhejiang Huaxiang); state-owned industrial enterprises, such as Diika, Binzhou Pistons; private enterprises, such as Wanxiang, Wanfeng and so on.
The total amount of private enterprises in the country has grown by more than 20,000, and the privatization of state-owned enterprises has also been accelerated. Private enterprises have become the mainstay of the supply chain.
After China's accession to the WTO in 2001, the automotive industry developed rapidly and the output market expanded rapidly, and it basically integrated into the global automotive industry. The comprehensive ability of the parts and components industry has been greatly improved, the total volume of enterprises has increased rapidly, and it has begun to enter the global procurement system.
At this stage, there are four main characteristics of the automobile zero-to-zero relationship:
First, the supply of spare parts for China's joint-venture vehicle companies has become increasingly "localized." With the joint venture of the entire vehicle industry and the further expansion of the market, the foreign partners of the joint venture considered the brand factors, cost factors, and supply chain security factors and called on the original suppliers to set up factories in China. The supply chain is increasingly showing “localization†characteristics. . Such as Guangzhou Japanese-owned parts clusters, Beijing Korean-owned parts clusters.
Second, the supply chain has become increasingly "internationalized," and OEM OEM parts exports have grown rapidly to achieve a trade surplus. In 2005, China's auto industry achieved a trade surplus of US$200 million with exports valued at US$8.5 billion. China's domestic parts and components companies have begun to provide OEM supporting businesses for overseas vehicle companies. There are two main types of companies that join the global supply chain: one is a wholly-owned or joint-venture component company set up in China by a foreign multinational company to sell back to its parent company or other international company. Cooperative companies, such as Delphi China, Bosch China, and Shanghai Xiaoxuan automobile lights, etc.; the other category is the export of Chinese domestic-funded parts and components enterprises. The main force is private enterprises in Jiangsu and Zhejiang.
Third, the radius of the supply chain is becoming shorter and shorter. In order to improve response capabilities, service capabilities, reduce logistics costs, stimulate local economic development, and stimulate local employment levels, with the support of local governments, host companies require suppliers to establish productive and service-oriented enterprises nearby. At present, within the range of 50 km around the host company, a relatively obvious component industrial cluster has formed.
Fourth, the supply chain is highly competitive. At present, each company in the domestic spare parts supply chain, besides responding to unequal competition from inside and outside, and developing “unequal†competition in the environment, must face the disorderly competition between the zero and the other. This kind of market competition is becoming increasingly fierce. The survival environment of enterprises is not optimistic.
[next]
New Zero-to-Zero Relationship in OEM Match Market
At present, China's automobile manufacturing industry is maturing, but there is still a huge gap between the "strategic partner" type zero-relationship relationship from a reasonable and sustainable development, and the zero-sum relationship is not optimistic. The new zero-to-zero relationship in the OEM matching market is mainly represented by four types.
One is the vertical capital-type zero-to-zero relationship. The earliest manifestation of the zero-relation relationship is the "large and complete" and "small and complete" affiliation. That is, the parts factory is the "factory", "subsidiary" or even "workshop" of the host company. The "longitudinal capital type zero-sum relationship" is formed by "capital" relations such as "sole proprietorship," "controlling," "joint ventures," and "vertical" methods at lower and higher levels.
Although the rapid development of the modern automobile industry represented by cars, parts and components processing companies affiliated to the vehicles are all independent, but their capital structure and affiliation have not really changed.
The typical representatives of the "longitudinal capital type zero-zero relationship" include the former FAW Fooch (who has been controlled by Huaxiang) and Dongfeng Corporation's Parts Business Unit. The joint ventures of many parts and components held by SAIC are also "longitudinal capital-type zero-to-zero relationship." representative.
The second is the reverse capital-type zero-sum relationship. With the overall transformation of the socialist planned economy toward the socialist market economy, capital diversification has gradually replaced the purely nationalized economic system. The emergence of a new "reverse" capital model broke the "longitudinal" model of the original, large-scale state-owned subsidiary company's main plant.
This "reverse" capital model means that the parts and components companies are in the ownership of the host company and are the investors and "shareholders" of the host company. For example, in the early stage of the development of Beiqi Foton, attracting a large number of suppliers’ capital to acquire shares in Beiqi Foton, the main reason is mainly to consider capital as a link, benefit sharing, and seek a more stable and close relationship of zero, followed by the settlement of financing in the early stage of development. problem". The auto industry has a huge investment. The financial costs of bank loans and venture capital are huge, and the operation is relatively difficult. With the use of funds from parts companies, even the operation of “paying off the goods with stocks and buying shares†is relatively easy, and it does not have to bear the financial costs, which is ultimately reflected in the decline in vehicle costs. This is the core of the "reverse capital-type zero-sum relationship."
The third is non-capital-type zero-relationship. On the one hand, specialization has become the development goal for parts and components companies. Host companies have stripped out the socialized operation of subsidiary parts companies and established a simple supply relationship with parts and components companies to enable them to develop more markets. On the other hand, with the expansion of the "blowout" of the auto market and the continuous growth of the demand for the parts and components market, huge amounts of social capital have been attracted to the auto parts industry, and the socialized supply network has grown.
At present, non-capitalized, socialized parts and components companies have become the mainstay of the supply chain. Emerging car host companies, such as Chery, Geely, BYD, etc., mainly supply social supply.
The fourth is the internationalization of zero relations. With the continuous improvement of the internationalization of China's auto industry, the degree of internationalization of the parts supply chain is also continuously developing. The main manifestations are two forms of supply.
The first form is that parts and components multinational companies build factories in China. With the rapid development of the national economy and the automotive industry, global 6+3 automakers have all achieved joint venture production in China, which has led their original suppliers to establish wholly-owned, joint venture, or cooperative enterprises in China. The reason is that, on the one hand, the 1994 Automobile Industry Policy puts forward the requirement of “localization†for the whole vehicle and guides the entire vehicle company to accelerate and increase the content of localization; on the other hand, the entire vehicle company also urgently needs to go through localization. Production and service reduce manufacturing costs. Delphi, Bosch and other multinational parts and components groups have set up a number of manufacturing, R&D and investment sole proprietorships and joint ventures in China.
In the international zero-relation relationship, international suppliers are basically in a reverse dominant position in the supply chain due to factors such as technological monopoly, strong brands, and original suppliers of joint-venture vehicle companies. They enjoy “super national treatment†in domestic competition.
The second form is transnational international procurement. While the Chinese government and enterprises have increased their localization support, some parts and components products still need to rely on imports because of various factors. Imported products are mainly divided into the following categories: First, new products need to be imported for vehicle development; secondly, key core components need to be imported due to lack of domestic technologies, such as automatic transmissions, a small number of engines, and other automotive front-end products; , process, scale, quality, price, reliability and other factors of the product, such as part of raw and auxiliary materials, electronic components, ECU, rubber parts and so on.
No "strategic partnership" between vehicle and component suppliers
Recently, the “30-year reform and opening up†campaign of the auto parts industry has been held in a number of places. Looking back at the achievements, everyone is happy. However, in my opinion, the current relationship between domestic vehicle suppliers and parts suppliers is far from reaching a "strategic and cooperative partnership" of benefit sharing, market sharing, development collaboration, and investment interaction.
Due to the history and development of Chinese auto parts and components, the existing zero-removing relationship is extremely complicated. There are both high-end car companies and high-end parts companies; there are both traditional supply-demand relationships that are capital-linked, and competitive relationships among emerging companies; there is a strong competition for transnational components with "supernational treatment." Damage to intellectual property at low cost and price competition. In short, the current zero relationship (whole vehicle and parts), overall relationship (whole vehicle and vehicle), and zero relationship (parts and parts) of the Chinese automotive market can be summarized as "inequality" and "unstable". Competitive relationship.
The first is the inequality in the market competition. In the historical development process of “large and complete†and “small and completeâ€, the domestic vehicle companies have left behind a number of component manufacturers with “blood†relationships. The "internal match" market has been "protected." Although several developments such as “joint venturesâ€, divestiture, and capital diversification reforms have taken place, these companies will still gain more market share than other non-institutionalized social enterprises. In addition, there will be more price-inclining policies, more personal connections, technical support, and information support. This obviously puts social enterprises in a relatively weak position in competition and unequal competition.
With the continuous expansion of international cooperation, the entire vehicle joint venture foreign party to promote the original supporting enterprises to build factories in China to achieve the local supply of spare parts. At present, most of the world's leading auto parts companies have established joint ventures or wholly-owned enterprises in China. According to incomplete statistics, there are nearly 2,000 foreign-funded auto parts enterprises. Among them, Delphi (2.846 billion), Denso (2.314 billion), Yazaki (21.68 billion), and Visteon (2.523 billion), the four giants, accounted for more than 20% of the total sales in the Chinese market. After the international parts and components companies enter China, their original supporting host companies will inevitably give foreign investment parts and components "protection" in the matching market.
Therefore, it is not difficult to understand that the local suppliers in a weak position of comprehensive ability and the above-mentioned foreign-funded enterprises are in a state of extreme “inequality†competition in the market competition, and it is difficult to break the existing phenomenon of foreign brands' supply networks.
The second is the development of environmental inequality. "Inequality" in the development of the environment is mainly manifested in the fact that foreign-funded enterprises enjoy "super-national treatment."
In order to develop the economy, our central government and local governments have formulated many policies to attract foreign investment. Foreign-invested enterprises enjoy a series of preferential policies such as preferential land prices, reduction of the second exemption and three tax incentives, reduction of import equipment tariffs, preferential financing, and supporting financing, while domestic-funded enterprises cannot enjoy, that is, foreign-funded enterprises enjoy “super national treatmentâ€.
In a certain period of time, these policies are correct and reasonable. However, these policies will eventually be reflected in the decline in the cost of foreign investment products, and cost is the most important means of competition. However, domestic-funded parts and components companies that also need to develop are not only unable to obtain the same preferential policies as foreign investment, but also bear more employment responsibilities and social responsibilities than foreign investment. This causes domestic and foreign capital to be overburdened in the same market competition due to the "unequality" of the development environment and is in a relatively passive state.
The third is the instability of the supply chain. At present, each company in the domestic spare parts supply chain, in addition to dealing with unequal internal and external competition and the "unequal" competition in the development environment, must face the disorderly competition between the zero and the other. This kind of market competition is becoming increasingly fierce. The survival environment of enterprises is not optimistic.
Due to the rapid growth of the market, domestic capital, foreign capital, industrial capital, social capital, and private capital have flowed into the auto parts manufacturing sector. The number of parts and components companies has increased by more than 10 times before the reform. Each product, especially those with low technological content There are hundreds of companies participating in the competition. If companies want to survive, they must grab the market and often be in excessive competition.
These phenomena of over-competition and disorderly competition have basically occurred under the indulgence and suggestion of the host company. From the double deployment point to the three distribution points to the current multi-distribution, new model re-distribution, tender distribution, and many other supply chain construction methods, the core of this approach is the two-word "cost"! The extension is also the two words "benefits "!!
In this disorderly competition, no party is a winner.
[next]
The Effect of Zero-Relation on the Development of Parts Enterprises
At present, many problems highlighted in the development of parts and components companies are closely related to the relationship between zero and the whole. The inequality and instability of the protected market and living environment have great impact on the development of parts and components companies.
First of all, it shows that the comprehensive capacity of enterprises under market protection is insufficient. The vertical capital-related parts and components companies have been severely criticized by public opinion. Criticism focuses on two aspects. One is to criticize the host company for "protecting backwardness," and the other is to criticize parts companies for "do not push forward."
"Protecting backwardness" was the language around the 1990s. This phenomenon is not much at this stage through joint ventures, cooperation, and technology introduction. At this stage, it is not the protection of "backwardness," but protection of the "market."
However, enterprises under the protection of the "domestic demand" market have basically maintained synchronization with the parent company in terms of product technology input, and management capabilities, research and development capabilities, and market adaptability have been insufficient.
Second, the improvement of independent research and development capabilities is severely constrained. In the short term, it is difficult for the parts and components industry to develop its own development capabilities and lack the technical support to establish a "strategic alliance partnership."
On the one hand, mainstream vehicle companies mainly rely on imported technologies, and host companies rely on joint venture foreign technology. Components do not have any independent market demand. Host enterprises require matching companies to have imitation capabilities, and require companies to have the ability to test, self-certify, and improve design capabilities at most. , far from "autonomy".
On the other hand, spare parts do not have the ability to pursue autonomy The disorderly competition and excessive competition cause the parts and components companies to remain in a low-profit, unprofitable operating state for a long period of time. They are unable to invest large sums of money in the R&D of hardware, software, and talents. They can gradually expand their production and protect the market. The production capacity is already a better-run company, and basically there is no excessive capital to pursue autonomy.
At the same time, parts and components companies do not want to dare to invest too much money and energy in research and development. The parts and components industry under excessive competition, disorderly competition, and lack of intellectual property protection measures has become one of the important means of competition in violation of intellectual property rights. Inadequate protection of intellectual property rights has caused the development results of enterprises to be infringed upon by other component manufacturers and even host companies. For parts and components companies, instead of being interested in counterfeiting, plagiarism and illegal acquisition of new technologies are the most direct and cheapest ways.
In this kind of macro-competitive state, the initiative of the parts and components companies to invest in research and development capabilities is naturally insufficient. Do you choose a joint venture or choose risky development? The conclusion is self-evident.
At present, the host companies have fully realized the importance and urgency of establishing a "zero-strength strategic alliance partnership." The host companies have established their own R&D institutions, handing over the OEM's first-order choice to the R&D department (in the past, the procurement department), and selecting suppliers with simultaneous development and synchronization capabilities. However, in fact, most of the suppliers with this capability are foreign-owned enterprises and joint ventures, while the vast majority of domestic-funded enterprises still lack the technical foundation needed to establish a "strategic alliance partnership."
(The author of this article Yan Jianlai is the Minister of Parts and Components of the China Automotive Engineering Society and the Minister of Exhibition and Popular Science)
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