Anti-monopoly Difficult to Curb the Rapid Expansion of Foreign Auto Parts Enterprises in China

Release time:

2023-09-15 14:31

This is 6 years after the implementation of China's "Anti-Monopoly Law", the auto industry has truly experienced its existence. From 2014, the term "anti-monopoly" will be popular in China's auto industry and may continue for many years.

At present, the focus of anti-monopoly in China's auto industry is in the field of parts and components, including vertical monopoly and horizontal monopoly. The National Development and Reform Commission issued a fine of 1.2354 billion yuan to 12 Japanese auto parts companies, which is a horizontal monopoly in which many companies jointly manipulate prices; relevant ministries and commissions are also investigating the supply channels and price agreements between vehicle companies and suppliers. This is a vertical monopoly.

From this, we can feel that the Chinese government's anti-monopoly is deepening. Industry insiders hope that for the long-term development of China's auto industry, anti-monopoly can curb the crazy expansion of foreign-funded enterprises in China.

Since the beginning of this year, the author has constantly heard that foreign auto parts companies have announced their expansion plans in China. Bosch, the world's largest auto parts company, announced that "by 2020, its sales in the Asia-Pacific region will double from 2013"; Delphi of the United States announced that "by 2020, sales in China will quadruple from 2012"; France According to Faurecia, "sales in China will double in the next five years, with an average of 5 new factories each year".

This plan is not only a family of two, but a common phenomenon.

Against the backdrop of increasing downward pressure on China's economy and slowing growth in China's auto market, why do foreign auto parts still believe in the rapid growth of the Chinese market? I once asked the CEO of a foreign parts company: "Are you too optimistic?"

Looking back on the development history of foreign-funded parts companies in China, taking the compound annual growth rate of sales in the Chinese market in the past five years as an example, Bosch is 25%, Faurecia is 38%, and most other companies have reached double digits., Much higher than the overall growth rate of the Chinese auto market. At this rate of development, the goal of doubling in five years is not ambitious, and even a little conservative.

In the field of complete vehicles, there is still a red line of 50: 50 for joint venture shares and a limit of up to two joint ventures for similar products. In the field of parts and components, foreign-funded enterprises can be arranged at will, not only without restrictions, but also enjoy preferential treatment for governments at all levels to introduce foreign capital. Some foreign companies also looked for Chinese partners for joint ventures in the early years, and later turned to wholly-owned factories.

Therefore, when we lament that the market share of self-owned brand cars has fallen for 11 consecutive years, the situation of self-owned brand parts is even more severe, and foreign-funded parts have already been fully reported. Not only joint-venture vehicles, but also self-owned brand vehicles for quality upgrades. In recent years, a large number of foreign brand parts have been purchased. Foreign parts and components through the product line down, has been from the monopoly of the high-end market, extended to the erosion of the low-end market.

Foreign auto parts companies that are accustomed to the rapid expansion of the Chinese market can no longer stop. Can the current anti-monopoly slow them down?

The author believes that it is difficult. At least the current anti-monopoly measures are difficult to have this effect. There are three reasons. First, the technical level of foreign auto parts is still high. Even if anti-monopoly, to break the original foreign-funded parts of the price alliance, independent brand enterprises are difficult to achieve the same level of technology. Moreover, after breaking the monopoly, foreign parts may reduce prices, and their cost-effective advantages will be highlighted, and more orders may be obtained.

Second, today's fines can not change the overall performance of foreign parts enterprises. Of the 12 Japanese parts companies, 2 are exempt from punishment, and the lowest fine in the other 10 is 2% of the previous year's sales, and the highest is 8%. Judging from the monopoly position of these enterprises in the Chinese market, the profit margin must be more than 10%, and they have already made a lot of money. Such a fine can only be regarded as a warning and can not shake their income level.

Third, to break the vehicle factory's monopoly on the original parts channel, the biggest benefit will be foreign parts enterprises. Because they are the largest supplier of original parts, most companies also have rich after-sales market experience. Once the original parts can be sold freely to the after-sales market, foreign-funded parts companies will gain huge new growth points, and their sales in China will increase unabated. (Lu Zhaofeng)



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