Parts companies are squeezed on both sides to seek autonomy
In recent years, host companies have been slashing price cuts, especially since 2006, and price reductions have become a promotional weapon frequently offered by vehicle manufacturers. The deeper and lower price whirlpool not only deeply involved vehicle manufacturers, but also quickly affected the fish. Under the influence of vehicle manufacturers, the upstream components manufacturers, such as bearings, gears, hydraulic components, and standard parts, began to get worse. The more you feel the pain of passive price cuts.
Although parts and components manufacturers generally report that they are in an unequal position with the main engine plant and lack an effective dialogue mechanism, in spite of the dual pressures of the OEM price reduction and raw material price increase, although the profit margin has become smaller and smaller, most parts and components Manufacturers are still arbitrarily pleasing their ambitions. They dare not to speak out, but they do not dare not to supply them. They fear that they will lose their qualifications and future markets.
Survival in the gap between parts and components companies
"It should be said that the days of all parts and components manufacturers are very sad." A car bearing company general manager Lu Lu told the author that the profits of parts and components in previous years were still very substantial. Now, the automaker is pushing down prices too much and he has to force his company to strengthen management and improve technology. "Anyway, if foreigners can withstand it, we must also hold it. Perhaps after this round of price wars, we will eliminate a batch of bad parts factories. Naturally, we will develop a number of factories that can stand up."
With a price reduction of several tens of thousands of yuan, vehicle manufacturers play a leading role in the market because they control market access, product brands and technical standards. Therefore, once the car prices drop, the component manufacturers naturally have to actively follow-up, otherwise, wait until the vehicle factory proposes to change the supporting factory, and then it will be too late to act.
In the past, vehicle manufacturers required component parts to drop by several percentage points each year when purchasing parts and components. However, last year's continuous price cuts in vehicle prices caused most vehicle companies to pass most of their pressure on parts suppliers. For example, the price of a certain brand of Pistons was 110 yuan in May last year, but now it is only 90 yuan, a drop of nearly 20%.
"The ship was hit by the wind again." In the case of parts and components companies that are not allowed to constantly lower product prices, the prices of raw materials such as steel, oil, and coal continue to rise recently. Taking steel as an example, the current domestic market price of hot-rolled plates has reached 3,800 yuan (US$458/ton). Including tax), the medium board price also reached 4100 yuan (494 US dollars / ton). In addition, price fluctuations in aluminum and other raw materials also affect automotive and parts companies. Transport costs are also rising. The situation of power shortage may also further cause the price of electricity to rise. At the same time, there is limited room for other cost reductions. The space for reducing the cost of various quality assurance systems is negligible, but it cannot be done at the expense of the quality of the product. It is not worth the spare parts manufacturers. As a result, companies are under two pressures. The price of the main engine plant and the price of raw materials are the same as the "hamburger". We call it the "hamburger effect."
Parts companies fall into a strange circle
Most of China's parts and components companies rely on complete machines and vehicle production plants, and they are in a passive and service position. In foreign countries, the parts factory has its own development capability. When the main engine manufacturer develops new products, it depends on the spare parts supplier. This is the main gap between domestic and foreign spare parts enterprises. According to the author's understanding, cooperation with well-known domestic parts and components manufacturers and vehicle manufacturers will generally sign a framework agreement of three or four years or more. Both parties sign a contract each year, according to the decreasing cost of spare parts, scale expansion and production efficiency. To increase, there are three or five points of price reduction for the parts and components supplier each year, and the number of points of decline is agreed by both parties. However, as the owner of the factory, the contractor will often request a renegotiation of the supply price every year. It may even require the parts and components supplier to make a significant price reduction. At present, in cooperation with the host plant, the host plant often does not comply with the requirements of the contract, and frequently requests for lowering the purchase price. This is a common phenomenon in the spare parts industry. It is worth noting that many companies have made a fuss about raw materials and processes to reduce costs, leading to a decline in the quality of parts and components.
Parts companies should pay attention to independent development
The weak development capability is a big problem for Chinese parts and components companies. In the absence of development capabilities, most Chinese parts and components companies lack intellectual property rights and can only process according to plans and earn some hard money. An industry expert believes that parts and components suppliers only have to enter the complete process from the market to manufacturing, from manufacturing to development, and form an independent development system and independent development capabilities in the process of transformation, and form an independent development team, so that they can eventually become competitive. Hunan Jiangbin Machinery (Group) Co., Ltd. is a successful model in introducing, digesting, and absorbing advanced foreign technology. The company is a professional company that produces and operates engine pistons. In the 1980s, the company introduced a full set of piston processing technology from the German Mahler company. Through more than 20 years of digestion, absorption, and bold innovation, it has achieved initial results. Now, the company has domestic first-class piston processing technology, and some of the technologies have reached the international advanced level, and the ability to participate in market competition has been significantly enhanced.
Internationally, vehicle manufacturers and parts suppliers are in an equal relationship with each other. In China, this relationship is currently expressed as the relationship between the "parent and child." The prosperity of the whole machine and vehicle companies must be supported by the parts and components factory. The price reduction of the entire vehicle and even the whole machine cannot be sacrificed at the expense of the interest of the parts and components companies. The whole machine, automakers and supporting plants take a “win-win†road. To build a strong strategic partnership in the future is of far-reaching significance.
Jiangsu Minnuo Machinery Manufacturing Co., Ltd. , https://www.minnuoindustry.com