China's auto parts industry shuffles

Due to sluggish external demand, trade protection and other reasons, China's auto parts industry has experienced a decline in export transactions. In the short term, the export situation is not optimistic. According to the analysis, competition in the industry will become increasingly fierce in the future, and the industry will shuffle or be difficult to avoid.

In the context of rising renminbi and rising labor costs, China's auto parts exports will be full of challenges this year. Most domestic small and medium-sized auto parts companies have gross profit of about 3% to 5%, while the academic community estimates that the yuan will appreciate by 5% this year. This means that many companies face zero profit risk. Ji Peiwei, sales manager of Wanxiang Imp. & Exp. Co., Ltd., said that the company’s auto parts export prices have increased by 10% to 20%. Yao Wenping, vice president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, also believes that the reshuffle of the domestic auto parts industry is inevitable. She said that simply relying on export tax rebates and other policies to upgrade an industry will not work. The development of enterprises is lagging behind. Nowadays, the competition in the export market of auto parts has become increasingly fierce. In the past, there was still profit in the low end, and now the profit rate of low-end products is very low, and companies are forced to develop high-end products. High-end products are embodied in more independent research and development patents. He suggested that SMEs expand their markets and accumulate funds. On the basis of having a certain amount of financial strength, on the one hand, it has increased its own research and development efforts, and on the other hand obtained overseas advanced production technologies of auto parts and components through overseas mergers and acquisitions.