The development of the auto parts companies is particularly crucial to the quality of vehicles and innovation in China’s brand. However, the closed development pattern has restricted the growth and development of strategic partnerships between your vehicle enterprises and the automobile parts companies. To keep on top of the pace of the automobile industry, the car parts industry should be further developed. The following is the conversation from a reporter along with the deputy secretary-general of China Association of Automobile Manufacturers (CAAM).
In recent years, China’s auto parts enterprises are making significant progress, but they still can not catch the pace of companies that produce vehicles. What are the reasons?
For a long period, products of domestic components industries are low-end. Generally, those joint ventures of vehicle manufacturers do not use domestic components as they are not confident in the caliber of the products. With the opening in the automotive market, there are restrictions around the number of vehicle enterprises. However, there is absolutely no restriction on your vehicle parts companies. As a result, many foreign enterprises invest and build factories in China. Their mergers and acquisitions have much impact on domestic brands. Thus, the component industry can’t catch up with the pace of the vehicle industry, ultimately causing the restriction of the progression of the domestic component industry.
The domestic parts companies are producing low-end products. Is it because of the little investment in technical research and development?
Technical research and development is an extremely complex process. At the beginning of the reform and examining policy, domestic parts and components enterprises cooperated with many different foreign companies. They provide technology to domestic enterprises. Therefore, domestic companies simply have to manufacture according to the drawing. But with all the expansion with the automobile market, many advanced component enterprises tend not to provide technology to Chinese companies. They just develop independently. Because many domestic companies are determined by foreign technology, they can not survive minus the core technology.
Reporter: Where is the event road for Chinese auto parts industries?
Dong: Although many domestic component enterprises have developed adequately, almost all of their technologies copy from others. They don’t grasp the products’ core technology fundamentally. Auto parts enterprises should cooperate well with vehicle manufacturers. Meanwhile, rogues should take responsibility to generate a good relationship with the former. After all, your vehicle parts industry can provide service for vehicle companies. For example, they offer various auto part products in their mind like bearings, gears, brakes, etc.