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2013 is China’s 60th anniversary. For Dong Jianping, Deputy Secretary General of China Association of Automobile Manufacturers (CAAM), it is also a year he turns into his 60. Over the past decades, from an officer in an auto bureau to a purchasing specialist in a JV and then to the head of parts business at CAAM, he has been witnessing the changes of auto parts along with the rapid development of China’s auto industry, founding that many problems in this growing process are still not solved. He said: “lured by profitable low market, many parts enterprises are doing low-level production. The future of China’s auto parts is to be international.”
Reviewing the past of China’s auto industry, Mr. Dong divides the 60 years into “two periods and three phases”. The line dividing “two periods” is the opening-up, before the opening-up period and after the opening-up period. The “three phases” refer to: at the beginning there are parts for trucks, then the parts for cars and finally Chinese parts in international market after accessing to WTO. Nowadays, the export of China’s spare parts has taken an absolute advantage. The amount of exports reaches 55 billion USD in 2012.
However, it should not be denied that almost all famous parts manufacturers entering Chinese market follow the complete vehicle manufacturers and establish an independent and perfect parts supporting and supplying system, and mostly from other countries. Local part manufactures only provide to Chinese complete vehicle manufacturers. As these local brands are at a middle and low-level in the auto market, the sales is not good and has little contribution in driving the development of part manufacturers.
Dong Jianping points out that “most Chinese part manufacturers lack R&D and innovative capacity due to their following-up strategy. Even through with high-level equipments, the products are sill not advanced enough.” Most core parts technologies are in hands of foreign-owned enterprises. A strategic system with perfect, stable and harmonious parts supplying are hard to establish.
As Chinese market sees slowdown and overseas market suffers financial crisis, it is a good timing for Chinese part manufacturers to introduce technologies. In future, Chinese part manufacturers will enjoy more opportunities to cooperate medium-size and small European and American companies that have core technologies. “These companies have not only core technologies and sound reputation, but also good customer relations in up-and-down-stream industries as well as a marketing network. Some powerful Chinese part manufacturers can enlarge international partnership based on a win-win cooperation to improve innovative capacity”, Dong says.
Furthermore, he also mentions: “we should encourage international enterprises to do R&D in China so that excellent Chinese part enterprises are able to enter the supplying system. Chinese complete vehicle manufacturers should abandon the simple though of global assembling and establish a real technical relation with part manufacturers.” Regarding the future of Chinese part industry, Dong says: “in future part market, multiplex enterprises will root in China and take full use of Chinese resources and raw materials to conduct localization of core technologies. This is the foundation to realize a strong auto country.”