How large is the technology gap between local parts suppliers and international suppliers? How can foreign suppliers of parts and components better integrate into the Chinese market? Faced with the new round of adjustment in the auto industry, how should China's auto parts and components companies transform? At the 2014 Global Automotive Forum in Wuhan, foreign CEOs from Lear, Valeo, Delphi and other foreign-owned components discussed the series of topics. Everyone unanimously believed that the reshuffling of the auto parts market in the future is inevitable. The future market pattern depends on the restructuring and adjustment efforts of different companies. Foreign capital should further deepen the process of localization. Local parts and components companies urgently need to improve their technological capabilities and global supply capabilities.
Shortage of local technology shortcomings
Jay K. Kunkel, president of Lear Asia Pacific, believes that local auto parts suppliers have improved their ability in machining, but the gap in automotive electronics, system integration and other fields is more than 5 years, if not shorten the gap as soon as possible As the main source of technology, the overall gap between local parts and components companies in this area will also affect the development of domestic automakers in the future. According to JayK.Kunkel, in today's ever-changing technological development, if the company's technological development lags behind its generation, there are few chances of catching up.
In addition, JayK.Kunkel also believes that local parts companies also have inherent weaknesses in customer resources. "The gap in the competitive strength between local suppliers and foreign excellent suppliers is primarily due to differences in their network channels, rather than design and engineering capabilities." JayK.Kunkel believes that the lack of global customer resources and supply Experience is the inherent defect of most small and medium-sized domestic parts and components companies. Even such companies can develop the most advanced technologies, but due to the lack of a global network of cooperation, it is difficult to quickly apply the technology to the market.
However, Yang Xiaoming, president of Delphi China, is even more optimistic. He believes: “Some domestic domestic parts and components companies are moving from simple imitation to independent development, and they are growing rapidly. In the future, the gap between foreign and domestic companies in many areas will quickly shrink.â€
Foreign capital continues to promote comprehensive localization
However, in this discussion, the topic is still mainly focused on the strategic adjustment of foreign-funded enterprises themselves. The Chinese market is growing rapidly and the demand changes quickly. The focus of strategic adjustment of foreign-funded parts and components companies is to be closer to the market, listen to changes in demand, and respond quickly.
According to Beno, president of Valeo China, currently 27% of Valeo's business orders come from China. China is Valeo's global key market. “Next we hope to use Valeo's global R&D center network to develop new technologies in China and become a truly localized company,†he said.
Compared with Valeo's commitment to the localization of technology and engineering capabilities, Lear and Delphi's overall localization process has gone faster. JayK.Kunkel said that in the Lear Group, the Asia Pacific region has become a division of the group company and is focusing on cultivating local talent. “The Asia Pacific region can make a decision on China's business.†Delphi promotes its localization to the localization of decision-making. "China, as the world's largest single car market, is not enough to just place an engineering center here. We must also place decision centers in China." Yang Xiaoming introduced that Delphi has 22 production bases in China and general managers of all production sites. All of them are local talents and have worked for Delphi for more than 8 years. In the past three years, Delphi applied for and obtained patents in China more than 70 each year. Yang Xiaoming said that in the past two years, Delphi has further adjusted its development strategy in China and focused on improving the speed of decision-making in the Chinese market. He believes that in the transformation of multinational parts and components companies must be fully localized in order to fully integrate into this market, it is expected to seize the opportunity brought by the next wave of development of China's auto industry.
In addition, although the market share of domestic automakers has been continuously declining this year, these foreign-owned auto parts companies do not seem to be worried about this. They generally believe that many self-owned auto companies are actively adjusting their product mix, and their development capabilities are also accelerating. Since 2012, although the market share of local OEMs has been decreasing, it is actually an opportunity for companies to rethink, and they can take a step back and rethink their brand positioning. "JayK.Kunkel said.
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