China's car companies took the lead in the field of overseas bottoming out components

The overseas hunters in China have seen major breakthroughs in the recent wave of overseas hunters. Jingxi Heavy Industries, which just registered for a few days, said that it would acquire Delphi, which was once the world's largest auto parts supplier, and Geely Automobile won the world’s second largest transmission company, DSI, plus Weifang Diesel and a component company in France in March. The contacts, etc., were all seen as landmark events for Chinese auto companies to go overseas under the financial tsunami.

Chinese car companies raiding overseas parts market

At the end of last year, when the financial tsunami caused the global auto industry depression, the voice of Chinese car makers overseas hunters was repeatedly amplified. However, these car companies did not act except for the “thunder and rain” scream, but the parts and components market broke through in the first place.

On the afternoon of March 30, United States local time, BWI and Delphi, jointly established by three shareholders, signed an exclusive acquisition agreement in Detroit. It is said that the purchase price is 90 million US dollars or 100 million US dollars. Just three days ago, Geely Automobile won the second largest automatic transmission manufacturer in the world. If we add the contact between Weichai Power and a French component factory at the beginning of this year, and in less than 100 days, the Chinese auto companies’ attempts to retire overseas first opened up a gap in the components and parts sector.

According to sources, BWI's acquisition of Delphi is expected to be completed in the fourth quarter, which will undoubtedly become the largest amount of overseas acquisitions in China's auto parts sector. It is understood that the acquired assets include 8 production plants, 5 technology centers and 14 technical support and customer service centers in Poland, the United States, Mexico, China, France and other places. This part of the assets is a relatively advantageous part of Delphi's traditional business areas, including thousands of intellectual property rights and a number of world-leading technologies.

Surprisingly, Jingxi Heavy Industry is a joint venture company established in Beijing to promote the acquisition. Just a few days before the acquisition, it was just incorporated, and Jingxi Heavy Industry was jointly funded by Beijing Fangshan State-owned Assets Management Co., Ltd., Shougang Corporation, and Baoan Investment Development Co., Ltd.

Coincidentally, on March 27th, when Geely Automobile acquired the world’s second-largest automatic transmission company, the Australian DSI with more than 80 years of history, the industry was once again shocked. The company is one of the only two automatic transmission companies in the world independent of auto vehicle companies. It has an annual production capacity of 180,000 units and has previously supported Ford, Chrysler and South Korea's Ssangyong. If all goes well, Geely Automobile will formally complete the acquisition in Australia on May 29, with the highest amount of acquisitions reaching 314.7 million Hong Kong dollars. This will be the first case in which a Chinese passenger vehicle company acquires overseas auto assets after the introduction of the automobile industry revitalization plan.

Parts companies Jedi counterattack seek outbreak

Spring Plumbing Duck Prophet. In the era of national mergers and reorganizations to encourage the entire vehicle industry, domestic parts supply companies are the first to be shaken. Now that integration and restructuring are in vogue, it is imperative.

At present, the top four auto parts giants in the world are either supported by OEMs, such as Delphi or GM. The advantage is that they can grow rapidly with the help of OEMs. The same disadvantage is that the survival of OEMs will be very difficult. Or is an independent system supplier, represented by the German Bosch Group. At present, among the auto parts companies that are listed on the A-share market in China, the former are represented by Dongfeng Technology, FAW Fuwei, and Qiming Information, which are attached to Dongfeng and FAW Group respectively; with Wanxiang Qianchao, Ningbo Huaxiang, Weichai Power, Fuyao Glass is represented by the latter.

In recent years, overseas auto parts giants have landed in China through joint ventures and cooperation. Delphi, Wescast, Cummins and many other foreign auto parts manufacturers have already built dozens of production bases and branch offices in China. Nowadays foreign ownership of auto parts is as high as 70% to 80%. In particular, the supply chain of Japanese manufacturers and Korean manufacturers is almost not open to Chinese domestic suppliers. This has caused local suppliers to lose opportunities for common development with vehicle companies. According to statistics, the market share of the top 100 companies in the domestic spare parts industry accounts for only 50% of the entire industry, far lower than the concentration of other countries (regions). Although the overall income of the parts and components industry reached 837 billion yuan last year, 80% of the above-scale enterprises have sales revenue of less than 100 million yuan. Only 43% of the parts and components companies in the industry own patents, and less than 20% of the companies have patents for inventions.

The planning for the revitalization of the automobile industry announced at the beginning of this year indicated that it will "autonomize key component technologies." In addition, the central government will also invest 10 billion yuan in the next three years as a special fund for technological progress and technological transformation. Driven by the country’s policy of encouraging the “autonomy of core components,” more and more Chinese companies view Bargain-hunting Overseas as the best way to obtain core technologies.

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