Focusing on the core components of automotive intelligent control systems

Mainly engaged in the research and development, production, and sales of a series of products such as post-treatment supply systems, steering systems, engineering plastic products, metal structural components, and pipe fittings

MORE +

Focusing on the core components of automotive intelligent control systems

Mainly engaged in the research and development, production, and sales of a series of products such as post-treatment supply systems, steering systems, engineering plastic products, metal structural components, and pipe fittings

MORE +

Focusing on the core components of automotive intelligent control systems

Mainly engaged in the research and development, production, and sales of a series of products such as post-treatment supply systems, steering systems, engineering plastic products, metal structural components, and pipe fittings

MORE +
scroll down

The core technology of a complete vehicle lies in the strength of its components, leading to a strong automotive industry

2023-10-30

The automotive industry has a long and extensive industrial chain, and its development is closely related to the parts industry. Fu Yuwu, Chairman of the China Society of Automotive Engineers, stated that the core technology of a vehicle lies in its components, and a strong component leads to a strong automotive industry. A good zeroing relationship will also be a powerful catalyst for the sustained and stable development of the automotive industry.

So, in the current new situation and trend of the development of the automotive industry, what are the roles played by component companies and vehicle manufacturers respectively? How to create new integer zero relationships and form integrated development to jointly promote industry development?

Strengthen cooperation with upstream suppliers

Multi party cooperation among vehicle manufacturers, component suppliers, and upstream component suppliers has become a model for the development of some enterprises. Under cost pressure, vehicle manufacturers are strengthening their cost control over the supply chain. For example, as early as 2008, Dongfeng Nissan reached a comprehensive strategic cooperation agreement with Sinopec, marking the beginning of cooperation between the energy and automotive industries. Sinopec's chemical industry technology will penetrate the entire industry chain of automobiles and spare parts, from research and development to production, sales, after-sales service, and brand promotion. Dongfeng Nissan will receive technical support in new product development, fuel emissions, and leverage Sinopec's vast service network to provide consumers with more convenient services. Afterwards, in order to further implement the strategic cooperation agreement between Sinopec and Dongfeng Nissan and innovate the cooperation model, Sinopec Chemical Sales Company signed cooperation agreements with Dongfeng Nissan, Jinfa Technology, and others on automotive resins, creating a new tripartite cooperation mechanism and promoting the common development of the upstream and downstream of the industrial value chain.

Up to now, this cooperation model has been adopted by more and more vehicle manufacturers. Ning Xiaoyang, Chief Engineer of China Automotive Parts Industry Corporation, stated that in order to improve product quality and cost competitiveness, some mainstream vehicle manufacturers directly cooperate with second and third tier suppliers to reduce costs. "It is popular for whole vehicle manufacturers to purchase raw materials and electronic and electrical components uniformly. Whole vehicle manufacturers have a high demand for raw materials and strong bargaining power, so negotiating cooperation with secondary suppliers can lower the overall procurement price," he said.

A senior industry insider told reporters that not all car manufacturers have the ability to adopt this cooperation model. "At present, the cost pressure on automobiles is increasing, and some large-scale vehicle manufacturers with in-depth research on the industry chain and prices below the mid to high end level will adopt this cooperation model to deepen development."

"The adoption of this model also depends on the ability of the entire vehicle factory and whether there are sufficient procurement resources to negotiate prices with second and third tier component suppliers. If so, the cooperation between the two parties can be more in-depth." Ning Xiaoyang said that currently, sales in the entire vehicle market are experiencing slight growth, and reducing procurement costs has become one of the important ways for the entire vehicle factory to improve profitability and product competitiveness.

Cross border cooperation has become a new normal

Both vehicle manufacturers and component suppliers need to adapt to the overall industry development trend if they want to develop rapidly. Therefore, in the context of rapid development of technologies such as electrification, lightweight, and intelligent networking, cross-border cooperation between vehicle manufacturers and other industries has become increasingly frequent