2023 Development status and competitive advantages of China's auto parts industry

In recent years, new technologies such as electric drive and intelligent Internet connection have sprung up and developed together. The auto parts industry has ushered in a new opportunity of transformation and upgrading. The core competitiveness of many enterprises has been significantly improved. At the same time, many auto parts enterprises have the opportunity to overtake in corners.

Development status and competitive advantages of China's auto parts industry

The performance of auto parts enterprises in 2022 is polarized. On the one hand, the new energy automobile related parts enterprises have developed well, benefiting from the industry development opportunities; On the other hand, the competitive advantages of leading enterprises are more prominent, which has promoted the differentiation of industry performance.

According to the prediction of China Research Institute of Industry, the size of China's auto parts market will maintain a steady growth trend from 2021 to 2025, and the market size will reach 6.79 trillion yuan in 2025.

Lin Shi, Deputy Secretary-General of the Intelligent Networking Professional Committee of the China Communications Industry Association, believes that the rapid increase in the penetration of new energy vehicles will expand the demand for auto parts, and the boom trend of the new energy vehicle industry chain will continue. Benefiting from the rise of independent brands, domestic auto parts suppliers have accelerated the layout of the new energy automobile industry chain, gradually built the advantages of local supply chain, and ushered in a golden era.

In the future, the auto parts market is bound to face more fierce competition. Small and medium-sized enterprises with low product technology content and poor scale effect may be eliminated at an accelerated pace, and the industry differentiation will be further intensified, and the industry concentration is expected to continue to increase.

Current situation of global auto parts industry

The supply chain of auto parts is a pyramid supporting system formed by "parts → components → components → systems → assemblies". Under the mature auto industry chain system, the whole vehicle enterprises are fully engaged in vehicle development and design, vehicle assembly and terminal brand management. The parts enterprises are responsible for the modular and systematic development, design and manufacturing of parts. The auto parts suppliers are usually divided into Level 1, Level 2 and Level 3 suppliers. A pyramid industrial chain structure is formed between automobile manufacturers and auto parts suppliers.

Affected by the global epidemic, the global auto parts industry is under pressure of transformation due to macroeconomic factors such as sustained slowdown in economic growth and escalation of trade frictions. Automotive News released the 2021 list of the top 100 global auto parts suppliers according to the auto parts revenue of each manufacturer in 2020. Bosch, Germany, ranked first. The top ten suppliers did not change, but changed positions. From the perspective of auto supporting business revenue of major companies in 2020, affected by the global pandemic, the revenue of most of the top 100 companies declined in 2020.

After long-term development, the auto parts industry in developed countries has been characterized by large scale, strong technical force, sufficient capital strength, high industrial concentration, and global synchronization; A number of world-famous auto parts enterprises with sales revenue of more than US $10 billion, represented by Bosch of Germany, Electric Equipment of Japan, ZF of Germany and Magna of Canada, have emerged in the industry. These internationally renowned auto parts enterprises have strong economic strength and R&D strength, leading the development direction of the world auto parts industry. The top ten enterprises are mainly occupied by traditional parts giants, and the ranking of the top five fluctuates.

In the international auto parts market, multinational auto parts giants such as Aisin Seiji, ZF and JATCO have formed certain monopoly positions in the field of transmission, Bentler in the field of automobile chassis, Bosch and Continental in the field of body stability system and braking system, Johnson Controls, Lear Group of the United States, and Faurecia in the field of automobile seats, It also controls the core technology of the global auto parts industry.

According to the Research and Consultation Report on Government Strategic Management and Regional Development Strategy of Auto Parts Industry (2023-2028) issued by the China Research Institute of Puhua

In terms of auto parts export, with the development of the globalization trend of auto parts procurement, China's auto parts industry has ended the situation of facing a single customer and a single market, and increased the export of auto parts products.

China's auto parts export trade

At present, China's auto parts export trade has basically covered major countries and regions in the world. With the continuous improvement of China's auto parts manufacturing level in the past 10 years, China's auto parts export trade has established a basic pattern of mainly developed countries, supplemented by emerging markets and sub-developed countries. In recent years, the total export volume of China's auto parts enterprises has shown an overall upward trend. According to the data of the General Administration of Customs, in 2021, China's export of auto parts reached 75.6 billion US dollars, up 33.7% year on year.

In terms of auto parts import, China mainly imports high-end auto electronic systems, gearboxes and other key parts that do not have manufacturing capacity in China. The import of key parts of such vehicles is greatly affected by the international situation and tariffs, and the import volume has fluctuated greatly in recent years. Affected by the initial outbreak of the COVID-19, the import and export scale of China's auto parts showed a downward trend, but with the tightening of international epidemic prevention, the COVID-19 was effectively controlled, driving the import and export scale of China's auto parts to show a rapid recovery trend. According to the data of the General Administration of Customs, in 2021, China's total import of auto parts was 37.6 billion US dollars, up 15.9% year on year.

The retail sales of automobiles in 2022 will reach 20.543 million

At the end of last year, the popularity of the car market rose significantly. According to the latest retail sales statistics of the Automobile Market Research Branch of the China Automobile Circulation Association (CMA), the total retail sales in 2022 was 20.543 million, up 1.9% year on year.

It is noteworthy that the retail sales of fuel vehicles were 14.868 million, a year-on-year decrease of 2.302 million; The retail sales of new energy were 5.674 million, a net increase of 2.687 million. In contrast, it seems that fuel vehicles are losing consumers and have been flowing to new energy sources, whether due to the promotion of various policies or the support of people's environmental protection concept. This shows that in terms of automobile consumption, Chinese people's perception of consumption has changed. People's initial resistance to new energy vehicles, such as exclusion and doubt, has gradually disappeared, and they are accepting the new mode of transportation at an alarming speed.

In addition, the recognition of the brand has also undergone earth-shaking changes. In the comprehensive ranking of manufacturers' sales volume from January to December 2022, the era of "Volkswagen+General" dominating the list in that year has passed, and the domestic leader BYD has been replaced, leading the manufacturers' retail list with significant differences.

Especially in the field of new energy, according to the 2022 annual data ranking, BYD achieved a record of 1799947 vehicles, with a year-on-year increase of 208.2%. SAIC-GM-Wuling ranked second with sales of 442118 vehicles, up 2.5% year on year. Tesla China fell to the third place with annual sales of 439770 vehicles, up 37.1% year on year. In Top15, domestic brands occupy the list with an overwhelming number.

The sales volume of new force car enterprises in January was collectively cold

As of February 2, auto companies such as BYD, Weilai, Ideal, Xiaopeng and Jikron disclosed their sales in January. Influenced by the Spring Festival holiday and other factors, the "national subsidy" of new energy vehicles was withdrawn at the end of 2022, and some demand was overdrawn in advance. The sales of new energy vehicles in January 2023 fell sharply month-on-month. Among them, the sales of Zero-Run fell 87% month-on-month, and the sales of Xiaopeng fell 54% month-on-month.

Industry insiders said that with the withdrawal of "national subsidies", local subsidies may become the leading factor to stimulate the consumption of new energy vehicles. At the same time, the price reduction of new energy vehicle enterprises will drive the growth of terminal sales.

The sales of traditional auto companies such as BYD, GAC Aian and other new power auto companies such as "Weixiaoli" fell in January on a month-on-month basis. From the perspective of the new force camp of car building, "Wei Xiaoli" has become "Li Wei Xiao".

In January, 15141 ideal cars were delivered, down 29% month-on-month, and the sales volume exceeded the sum of Weilai and Xiaopeng. Weilai and Xiaopeng delivered 8506 and 5218 vehicles respectively, down 46% and 54% month-on-month respectively.

Nezha delivered 6016 vehicles, down 22.8% on a month-on-month basis, surpassing Xiaopeng and ranking third in the delivery list of new forces. Nezha Auto will be the sales champion of New Force in 2022.

In addition, the sales of new energy vehicles of Celes in January reached 4885, down 70.6% month-on-month and 38.78% year-on-year.

The decline of polar krypton and zero run is obvious. In January, Zero-Run delivered 1139 cars, down 86.6% month-on-month and 85.9% year-on-year. Polar Krypton delivered 3116 vehicles in January, down 11.7% year-on-year and 72.5% month-on-month. Polkrypton said that after 21 days of shutdown and upgrading, the Polkrypton smart factory had resumed work on February 1.

In terms of traditional automobile enterprises, BYD and GAC Aian still maintain strong competitiveness. In January, BYD sold 151300 new energy vehicles, down 35.7% month-on-month and up 62.4% year-on-year. According to the forecast data of the Passenger Transport Association, about 360000 new energy vehicles were retailed in January. BYD has a market share of more than 40%.

In addition, the sales volume of GAC Aian in January was still over 10000, reaching 10206 vehicles, down 66% month-on-month.

With regard to the month-on-month decline in the sales of new energy vehicles in January, industry insiders said that due to the decline of subsidies and the Spring Festival holiday, the overall sales data of new energy vehicles in January was weaker than normal, but still optimistic.

As for the reason for the large month-on-month decline in sales in January, Cui Dongshu, the secretary general of the Federation of Passenger Transport, said that the growth of sales of new energy vehicles had reached a bottleneck stage. In the early stage, the price of new energy vehicles increased too much and orders were few. While the price of leading enterprises such as Tesla has been reduced, consumers are in a wait-and-see mood.

Industry insiders said that Tesla, Xiaopeng, Celes and other auto companies adopt the "price for volume" model, which is expected to further boost sales in February.

The relevant person in charge of Celes said that the price reduction of some models of Celes reached 30000 yuan in January. With the continuation of the activity, the orders of AITO Inquire Series vehicles have increased steadily.

On February 2, Weilai announced a price reduction promotion, with a maximum reduction of more than 100000 yuan for the 2022 models of ES6 and ES8. The salesperson of Beijing Weilai Direct Store told China Securities News: "The event started on February 1, but the discount of 100000 yuan was relatively small. The discount of ES6 and ES8 nude models was about 50000 to 60000 yuan and 70000 yuan respectively. The more options, the more favorable the price." The salesperson said frankly that the main purpose of this move was to boost sales.