The strategic investment of local enterprises continued to strengthen. In the first half of the year, the growth rate of China's auto market continued to slow down, the market space was shrinking, and the changes in the automobile market environment further intensified competition. The whole market was full of smoke, and transnational, joint venture and independent auto companies. Expand all-round competition. In order to gain a firm foothold in this war, independent brand car companies have pulled up the upward and high-end flag, although this allows independent brands to continue to increase market share in the first half of the competition, but it is more dependent on independent brands. High local parts companies bring a lot of crisis. Autonomous automakers who competed for high-end vehicles have chosen a route that highlights high-end products with “brand-name†components, which directly leads to a shrinking market space for local component companies.
Under such circumstances, local parts and components enterprises have also launched a counter-attack road. Through strategic adjustment and investment, the road to transformation has been opened, especially in mergers and acquisitions and integration.
In the second half of the year, the parts and components sector, whether it is the merger and reorganization of domestic enterprises or foreign mergers and acquisitions, the pace of integration will accelerate.
Cross-border mergers and acquisitions speed up. According to statistics, in the first half of this year, there were three foreign mergers and acquisitions. Recently, China Aviation Industry Corporation, which was on June 30, acquired US-based German-German Automobile, which cost US$800 million and became the largest transaction for China to acquire the relevant assets of the US auto industry. Prior to this, on March 29, Weichai Power re-acquired a 4.95% stake in Kay's Germany for 187 million euros. After completion, Weichai Power's indirect shareholding ratio will reach 38.25%; March 23, China Chemical Rubber Co., Ltd. The acquisition of Pirelli with a total of 7 billion euros has made it the largest investment by Chinese companies in Italy.
The weakness of parts technology is not a cold day, but the counterattack is not a day's work, but the situation of domestic parts companies is extremely severe. Even if the vehicle sales market tends to grow at a low level, multinational parts companies continue to increase the layout. The domestic market further squeezes the living space of independent parts and components enterprises. Therefore, mergers and acquisitions may be the fastest way for independent enterprises to survive and enter the high-end market. The author believes that if you do not say absolutely independent innovation, now, live first. And to get the capital to continue to live is king.
Therefore, from the mergers and acquisitions of enterprises in the first half of the year, we can see that the initiative of M&A is strong. Then, this wind is likely to continue to blow. However, the issue of resource integration after overseas mergers and acquisitions will be a major problem. It is also hoped that enterprises will pay attention to potential risks and improve management capabilities, and truly control quality resources.
Domestic resource integration is accelerating. On June 10, Kunming Yunnei Power Co., Ltd. announced that it has completed the signing of the establishment of Wuxi Tongyi Automotive Power Technology Co., Ltd. (the “Investment Agreement†with the relevant partners to jointly build a new energy vehicle power system. Industrial technology development platform, forming an industrial chain to drive benefits.
Not only the internal power of the cloud, but also the consolidation and integration effects of domestic enterprises will continue to expand. In China's parts market, the number of foreign-funded enterprises accounts for 20% of the number of large-scale enterprises, while the market share accounts for more than 70%. Enterprises only account for 30% of the market share, and show a downward trend, 90% of which are concentrated in the low-end and mid-end sectors. But in the future, with the transformation of the market itself into intelligence and environmental protection, domestic enterprises can only gain new living space by strengthening the integration of resources and adjusting the product structure and extending the industrial chain.
Multinational corporations have increased the localization strategy, accelerating the number of Nuggets foreign-funded background parts and components accounted for 20% of the number of large-scale enterprises, and the market share accounted for more than 70%. If the strategic transformation of local enterprises is unfavorable, this situation will continue to intensify.
As for the trend of multinational companies in the first half of the year, we can see that although the Chinese auto market is shrinking, it still has great appeal to the parts and components enterprises. They are also optimistic about the Chinese market, and predict that the growth space is mostly in double digits. For example, relevant mainlanders said in an interview that "for the mainland, we still hope to maintain a double-digit growth rate in the future development, that is, we will exceed the growth rate of new cars in the Chinese market. The mainland Group's investment in China in the past five years has reached 1 billion euros. In the next five years, the total investment of the mainland in China will reach about 1 billion euros, which is equal to the previous investment. At the 2015 (6th) Global Automotive Forum held in Chongqing, Continental Group officially announced the joint investment with Huayu Automotive Co., Ltd. to build a new Huayu Continental Automotive Brake System (Chongqing) Co., Ltd. to further enhance localization.
Recently, Hitachi Automotive Systems recently issued an official statement saying that the company has signed an investment agreement with the Chongqing municipal government to build an auto parts factory in the country to expand its automotive systems business in China.
In the dominant commercial vehicle parts market, multinational companies have also begun to rush to market share of local companies.
In the first half of the year, China's commercial vehicle market was sluggish, and the trend of high-end is already the trend of the times. However, local companies are somewhat unable to do so, and multinational parts companies are just smelling opportunities. In June, the Schaeffler Group stated that it would open up the Chinese truck market with a new attitude; in May, members of the Volkswagen Group Commercial Vehicle Board and other people visited China National Heavy Duty Truck to expand cooperation on more projects such as Man Engine; Johnson Controls High-end commercial vehicle seat brand RECARO began to enter China...
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With the increase in the demand for high-end products in the Chinese auto market, the layout of multinational auto companies is likely to continue to increase in the second half of the year, consuming the market share of local companies.
The new energy, the whole vehicle manufacturing and the layout of parts and components will not let go of the popularity of the domestic new energy market. I will not repeat them here. Everyone in the industry knows clearly. It is precisely because of this situation that component companies are also hoping for this. In particular, local companies have formed two routes to create new energy vehicles and build new energy vehicle parts.
For example, we mentioned above that Yunnei Power has established Wuxi Tongyi Automotive Power Technology Co., Ltd. to build a new energy vehicle power system industry technology development platform and form an industrial chain to drive benefits.
The rapid growth of the new energy vehicle market has increased the demand for the electronic water pump market, which opened the market for the electronic pump products of the West Pumps. Four years after the listing, the first refinancing plan of West Pump Co., Ltd. was successfully implemented for turbocharger housing, automobile water pump and electronic water pump project. Not only can continue to expand the capacity of traditional automotive water pumps, but also enhance the company's electronic pump capacity.
In addition to these companies that add new energy components, there are also some parts companies that are betting on the whole vehicle manufacturing, and Lu Guanqiu also has to build a car. Recently, Wanxiang Group and SAIC Group jointly established a new energy bus company and established a new energy bus production base in Hangzhou, which will cooperate to develop domestic and overseas new energy vehicle markets.
Unprofitable, the hot new energy vehicle market will not only bring opportunities for vehicle production, but also bring opportunities for component companies to counterattack, and may even forge BYD in the field of parts and components.
According to the new energy strategic plan issued by vehicle manufacturers in the first half of the year, new energy production will also be upgraded in the second half of the year. Almost all vehicle companies have announced new energy strategic plans, and even silenced for a long time in the new energy field. Both Chang'an and the Great Wall have begun to vigorously launch their own new energy plans, and BYD, Lifan and other enterprises are quite a bet, and they have aggressively entered the new energy field. Then, in order to support the needs of vehicle manufacturers, the parts and components enterprises in the second half of the year are in new energy. The investment in the field will also increase, not to mention the fact that local companies currently compete with foreign investors in this field are not absolutely weak.
The price war may start, and local companies are advancing into the intelligent market. The price war in the whole vehicle market has already ignited, and it is likely to burn parts and components enterprises. The price war of the whole vehicle enterprise must be based on the low cost of parts and components, so for parts companies, they may face the risk of price cuts. In addition, the traditional auto parts industry belongs to the highly competitive micro-profit industry, and the enterprise pursues economies of scale. Then, if the production and sales volume drops sharply, the pressure on enterprises will increase. This is like the current vehicle sales market. Under the situation of difficult sales promotion and falling profits, everyone is likely to start a price war.
In addition, under the circumstance of all sides, parts companies will also seek new opportunities. Intelligence is the breakthrough point.
At present, the automobile is in the transition period of assisted intelligence, partial intelligence and complete intelligence. Bosch, mainland China, and other foreign component companies have already seized the commanding heights of the automatic driving assistance system (ADAS) technology, and China's auto parts enterprises have lost. The starting line is up, then, no longer miss the opportunity.
Therefore, with the transformation and adjustment of component companies, it is likely that foreign companies will gradually form a confrontational situation in the field of intelligence. Of course, this is only our expectation.
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