Dongfeng and Volvo will form an international commercial vehicle alliance. They will jointly establish a global R&D system and produce products with the same quality as European factories, and implement global unified procurement. Its products will cover medium and heavy trucks, passenger cars, special vehicles and chassis, engines, transmissions and so on. The whole set of supplier evaluation criteria is nothing more than quality, technology, and environmental requirements.
How to deal with international procurement and support the joint venture company? Xiao Xiao, professor of automotive marketing at Hubei Automotive Industry Institute, made a suggestion: To establish similar product industrial parks and establish industrial groups to integrate resources from vertical and horizontal directions.
The advantages of this approach are: First, it can achieve resource sharing and save costs; It can use the existing resources of the manufacturing industry, unify technology and R&D platforms to develop high-end products, save marketing costs, concentrate asset advantages, solve financing problems, and expand. The corporate borders allow companies to conduct transactions with entities other than companies, and generate transaction costs and taxes, thereby minimizing intra-group transaction costs. Second, they can complement each other's strengths, increase the efficiency of corporate operations and management, and make up for the "short board" of other companies with the "long board" of one company so that the long term can be brought into full play, thus stimulating other member companies to improve their operation and management efficiency. For example, the integration of sales channels, human resources management experience, and so on. Third, it can achieve synergies, improve the company's ability to innovate and comprehensively compete, and achieve interaction and collaboration among the various production factors within the large system, so that the system can generate the driving force for innovation and development, that is, “1+1>2â€. Through technological innovation, marketing innovation, and the reduction of costs and expenses, the comprehensive competitiveness of industrial groups has been enhanced.
Horizontal integration is the integration of business operations at the same level of the value chain. For parts and components companies, horizontal integration is the integration of the enterprises that produce the same type of products, giving full play to their large-scale advantages and making the products produced by the companies become serialized. It can start from the aspects of purchasing materials, marketing, production and management, and technology development.
Based on the principles of “government-led, association-led, enterprise-volunteer, and market-operationâ€, based on the parent company, the company will use the property rights relationship as a link, and through joint ventures, cooperation, or equity investment, the member companies will research and develop, purchase, and sell. Management and other links are linked together to further separate the operating chain and enable virtual chain market operations among all chains. First, in the auto parts industry chain, the division of labor with specialization of products as the core, so that companies that produce the same kind of product mergers and reorganizations. Each type of product is concentrated in the hands of a group of companies to gain monopoly control over procurement and supply, forming mutual constraints on the industry chain and winning a better living environment for parts and components companies. Parts companies can form industrial groups according to the types of doors (chassis parts, stamping parts, rubber parts, standard parts, and electrical appliances) to form a new strategic alliance.
It is impossible to directly form a certain kind of product production group with capital control relations through the specialization of labor in the industry chain. Through the integration of certain corporate functions, it can improve the efficiency of enterprises. For example, through the construction of a shared technology platform to provide technical support, a shared procurement platform to reduce procurement costs, shared sales resource platform to share market resources and so on. It can be jointly funded by the government and enterprises, led by the Science and Technology Bureau, based on colleges and universities, high-paying introduction of a group of high-quality, high-precision, high-spirited talents, establish a scientific and technological innovation system integrating production, learning, and research. Its technical level is in line with international standards. After three years, the government stopped spending and the R&D center was put on the market, building Shiyan into a domestic first-class, internationally advanced, and world's largest distribution center for auto parts. With a higher vision and higher technical content, it will be matched with the joint venture company. At the same time, it has jointly entered the overseas market with major manufacturers in the country, such as Jiangzhun, Shaanxi Auto, and China National Heavy Duty Truck. In accordance with the requirements of unified trademark, unified procurement, unified price, and uniform quality standards, we can realize risk sharing and benefit sharing.
Set the threshold and establish an industry access system. For original auto parts companies that do not want to integrate or do not have conditions, let them compete in the market competition to eliminate low-end products as soon as possible; newly established parts and components companies must comply with industry standards and consciously join strategic alliances, otherwise the business sector Not registered.
Vertical integration means that in an industrial chain, upstream (downstream) enterprises obtain the control of some or all of the assets of the downstream (upstream) enterprise through the operation of assets. The vertical integration of the company is to respond to the dynamic external environment, collate, coordinate, systematize, integrate, and integrate the strategic value of the company's value chain and industrial chain, and form an effective control over the company’s strategic resources and capabilities. Constantly cultivate the core competitiveness of enterprises.
Vertically integrated core approach is cross-shareholding. Foreign experience has proven that, whether horizontal or vertical integration, each participating enterprise can gain the economic benefits of integration. According to field surveys, the boss of the Shiyan City auto parts company is difficult to abandon the control of the company. In order to ensure the company’s control, it is willing to sacrifice some of the benefits. Therefore, in terms of industrial integration, in addition to the consideration of economic benefits, it is also necessary to consider the ability of business owners to accept industrial integration. So there will be cross-shareholding - both to ensure that business owners need for corporate control, but also to achieve the goal of industrial integration. For the auto parts industry, vertical integration is the integration of auto parts companies with upstream parts suppliers and the integration of downstream vehicle manufacturers and auto dealers.
Integrate upstream suppliers to reduce procurement costs and ensure the quality of products and timeliness of supply. If the downstream vehicle companies and car dealers are integrated, since auto parts companies are always in a disadvantaged position when they cooperate with the vehicle companies, they can directly cross over with the vehicle companies and car dealers. Parts companies and car dealerships (main dealers of major automakers) are integrated through cross-shareholdings, and auto dealers have an impact on the entire vehicle manufacturing industry, as long as parts and components companies are suppliers to automakers (tiered suppliers). ), car dealers can completely ask the auto manufacturer to select a qualified component to ensure the product quality of the vehicle and ensure the competitiveness of the international market.
Industrial integration needs to strengthen government guidance. In Shiyan, on the one hand, there are no specialized service agencies that specialize in industrial integration and mergers and acquisitions. Private-owned parts and components companies lack the awareness of industrial development; on the other hand, no companies actively seek mergers and reorganizations, and no companies have such organizational leadership. Ability and appeal. Therefore, in the process of integrating the auto parts industry in Shiyan City, it is necessary to have government participation and strong support. And this kind of support is also in line with the state's policy of supporting the development of SMEs, especially the government's support policy for the construction of public service platforms for SMEs. Such as technology development and integration, not only the participation of enterprises, but also the need for government support, because of the auto parts industry in Shiyan City, due to the very weak technology, and the high cost of auto parts technology development, the risk is relatively large, The ability of an enterprise may be difficult to achieve technological integration. It is necessary to have the government provide special support, or even direct financial support: the formulation of industrial planning, the introduction of corresponding personnel policy, land policy and so on.
Whether it is horizontal integration or vertical integration, in the era when business owners have more control over corporate control than economic interests, the government can and should provide appropriate policy supply to guide companies in industrial integration and restructuring. Only in this way can we truly strengthen the strength of Shiyan automobile and spare parts enterprises and lay the foundation for internationalization.
Guangzhou Taixin Auto parts Trading Co., Ltd. , https://www.taixinspareparts.com