In 2012, for China's domestic piston ring manufacturers, it is another worse year since 2008. Due to the decrease in the total installed capacity of commercial vehicles and the wait-and-see attitude of post-market dealers and customers, the overall market continued to decline, and the vast majority of corporate sales declined and profits declined. Although the installed capacity of the passenger car market has not dropped significantly, domestic piston ring enterprises have not been able to deliver smoothly due to the damage to the Japanese system, the rise in the German system, the decline in the sales volume of self-owned brand passenger cars and the squeeze of foreign-owned brand piston ring manufacturers. While being trapped in the country, the same order of labor, export orders are also less and less, Canton Fair, Frankfurt Auto Parts Show, Raschel Auto Show and other exhibitions are deserted. Local Piston Ring companies did not have any good news. The industry was depressed, expectant and wait-and-see during the bleak 2012.
The author believes that the local automotive piston ring enterprises have entered a new crisis era.
Competitively with the foreign piston ring factory
At present, the world's top ranked piston ring companies have entered the Chinese market one after another. They are wholly-owned or established joint ventures in China, some are oriented to local markets (Japanese-Korean models), and others are fully attacked, whether they are commercial vehicles or the passenger car market. Can see its figure. The domestic piston ring enterprises are relatively disadvantageous in the same stage competition, and some domestic engine companies have also contributed to the promotion of foreign brands. In addition, some fake brand-name piston ring companies, playing some clean balls, confusing audiovisual, actually have a certain market.
Piston ring product low gross profit
In 2012, the local piston ring enterprises are still in the era of low gross margin. The cost advantage is long gone and it is difficult for good products to have double-digit profits. In 2012, the market for heavy trucks, etc., fell drastically, and the production capacity of piston rings was too high. High-end production lines could only produce low-end products, and it would be difficult to raise costs.
In addition, the labor cost advantage is gone forever and wages become the largest expenditure. It is difficult for people to recruit or leave, and no one is willing to do it. It has become an important factor for the future increase in the cost of piston ring companies to study equipment and equipment automation and reduce labor intensity.
Due to the cost transfer of the host company, the piston ring company was caught in the middle and both sides were under pressure. The annual price cuts of the upstream engine mainframe enterprises, coupled with the omissions of the engine plant for the management of service stations and maintenance stations, have increased the cost of the Three Guarantees year-on-year, and the enterprises have been losing money. In addition, the engine factory delayed payment, season promotions, on-line settlement, acceptance payment and other unspoken rule games intensified, injured parts manufacturers including piston rings.
OEM request for special line production
In order to monopolize its resources and meet its monopoly demands, engine plants require their core suppliers and excellent suppliers to establish special parts for product lines. Piston Ring Enterprises is no exception. Its production line is not a hybrid line or a seasonal line. The expansion of production requirements of the engine plant for the special line wastes the production capacity of spare parts such as piston rings. In the high season, enterprises grab resources to ensure supply, and in the off-season, the piston ring companies do not have enough food. Build a green line is to enhance the image, capacity waste, do not build a dedicated line to meet customer needs, piston ring enterprises dilemma.
Dealers choose host aftermarket accessories
Better than parts manufacturers
Although the products all come from the same piston ring manufacturer, the dealers and customers agree with the OEM brand, the OEM also plays the IP brand, and the matching piston ring factory products cannot be sold to the aftermarket. The engine manufacturer's product name, brand, and part number Can not be used. If the piston ring used by the OEM is selected from the original supplier's product, then it is beyond reproach. It is often the main recipe, the hard-bones busy installation, the auxiliary supply or other manufacturers occupy the source of the after-market channels, and the supporting piston ring manufacturers are behind. The market lost a large part.
In 2013, how did domestic piston ring companies break through? Experts believe that only major innovations in research and development capabilities, technological levels, talent strategies, management enhancements, and strategic restructuring will enable domestic piston ring companies to continue to survive and develop.
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