As of November this year, nearly 10 companies in Chongqing have entered the US global auto parts procurement system, and more than 10 companies have obtained QS16949 certification. The ultimate goal of Chongqing is to first go abroad and post-local, and strive to achieve a local matching rate of 70% for the entire vehicle company.
Competition for three guarantees four!
At the beginning of November, the "City Development Plan for Automobiles and Motorcycles for the Eleventh Five-Year Plan" (hereinafter referred to as "Chongqing Auto & Motorcycle Development Plan") was formally introduced. As the third-largest automotive group Changan Automobile was held, the Chongqing Municipal Government proposed the above-mentioned termination goal.
"Before the introduction of the plan, it has been revised more than 20 times!" On November 18, Yang Lin, deputy director of Chongqing Economic Commission, spoke bluntly when interviewed by this reporter.
According to the plan, by 2010, the total vehicle production and sales volume in Chongqing will reach 1.5 million, the proportion of car production will increase from the current 25% to 70%, the automobile output will account for about 15% of the national total, and the vehicle sales revenue will reach 135 billion yuan.
"Based on Detroit in the United States, we will focus on developing the parts and components industry to drive the development of vehicle companies. This is the general strategy for the future development of the Chongqing automobile industry." Yang Lin emphasized to reporters.
A delegation of 100 people went to Detroit
The decision to advance parts first started at the beginning of this year. From March 7th to 11th, the Chongqing Municipal Government organized a large-scale exhibition group of 119 automobile and motorcycle manufacturers and parts companies in Chongqing and more than 200 people. Under the leadership of Wu Jianong, vice mayor of Chongqing, they participated in the United States. Detroit's "2004" Society of Automotive Engineers World Congress & Auto Parts Exhibition (SAE).
The debut of the Chongqing delegation in Detroit attracted the attention of giants including Ford, General Motors, Chrysler, Toyota, Lear, Westone, and Delphi.
In a short span of five days, 40% of Chongqing's participating parts and components companies had substantial contact with foreign companies, and 41 of them had reached a joint venture, cooperation and supply intention.
“Because of the good results, Chongqing will lead component companies to participate in the international auto and parts exhibition during the three years from this year, so that more companies can integrate into the global purchasing system of multinational corporations, and actively attract investment to attract foreign countries. The vehicle and component giant came to invest in Chongqing,†said the deputy director of Chongqing Economic Commission.
The longer-term gain is that Chongqing's parts and components companies have realized their own differences. At that time, the parts and components companies in Chongqing basically did not obtain the permit TS16949 to enter the multinational corporate procurement system.
After returning from Detroit, Chongqing City appointed special personnel to go deep into major parts and components companies to help with certification, and organized companies in Britain, the United States, and Switzerland to train more than 980 people in 480 parts and components companies in Chongqing.
In order to establish a supporting system for parts and components, the Chongqing Economic Commission has selected more than 30 key companies with higher supporting rates, cultivated them into modular suppliers, supplied them to vehicle manufacturers throughout the country, and was driven by these 30 supporting companies. The development of tertiary and fourth-level supporting enterprises will extend the industrial chain.
At present, the Chongqing Municipal Government is planning to set up a development fund with a scale of RMB 100 million to support the development of the parts and components industry.
According to statistics, in 2003, Chongqing’s vehicle sales revenue totaled 31 billion yuan, and sales revenue for parts and components was 21.3 billion yuan. According to Pu Yongjian, deputy director of Chongqing University’s Development Research Center and a doctoral supervisor in finance, “according to internationally accepted standards The proportion of vehicle and parts scales in the automotive industry can be around 1:1.7, which infers that the Chongqing parts and components market still has considerable room for growth."
It has been alleged that Chongqing’s focus on the spare parts industry has achieved certain results. In July this year, the Chongqing Municipal Economic Commission and the US Automotive Industry Group formally signed a cooperation framework agreement: North America 100 billion US dollars auto parts market beckons to Chongqing, demand information is transmitted to Chongqing through the electronic network, online procurement can be done, Chongqing auto parts production This opened up the fast track for the global market for the first time.
"Till November of this year, nearly 10 companies in Chongqing have entered the US global auto parts procurement system, and more than 10 companies have obtained QS16949 certification." Yang Lin said that the ultimate goal of Chongqing is --- first foreign, after the local, It strives to achieve a local matching rate of 70% for the entire vehicle company.
Prosperous times
In regard to the survival development of the automobile development strategy, the city government eventually chose "components first", and the policy immediately caused a lot of controversy in the automotive industry - in the end is a chicken or egg chicken?
At present, the development of Chongqing vehicle manufacturing, led by Changan Automobile, is gaining momentum. Some vehicle industry professionals represented by Yin Mingshan, chairman of Chongqing Lifan Group, generally believe that the development of the vehicle is complete, and the development of the component companies naturally follows. Their reason is that the American auto industry first had a GM company such as GM, Ford, and Chrysler. Then there were a lot of parts companies.
However, the decision of the Chongqing Municipal Government has its own considerations. "There is no mature automotive industry, there is no real mature automobile industry." Yang Lin said that when the vehicle company develops to a certain stage, the development of parts and components enterprises lags behind, and the development of the automobile industry will be hindered.
At the end of the 1990s, General Motors separated Delphi and Ford from Visteon. The intention was to concentrate on improving the R&D of the entire vehicle and also to avoid risks. However, this resulted in Delphi and Weston transforming from the supply of components for a single automotive company to parts and components companies worldwide. The scale of the business has been expanded to become a world-class auto parts company. At the same time, it also further promoted the development of the American automobile industry.
Yang Lin believes that the reorganization of light vehicle parts is a feature of the planned economy. The automotive industry in Chongqing also came this way. The result is that each vehicle manufacturer engages in a self-contained and small-scale operation.
The low level of duplication resulted in the specialization and low degree of serialization of Chongqing auto parts enterprises, weak development capabilities, and low product technology content, which could not play a corresponding supporting role for the vehicle companies.
Tan Jingyu, deputy director of Chongqing Automotive Economics Commission, even bluntly stated that Chongqing's vehicle production and supporting industries are currently developing unbalanced and even broken.
Statistics from the Chongqing Municipal Economic Commission show that in 2003, there were 480 enterprises with output value of over 5 million yuan for Chongqing parts and components enterprises, and the total industrial output value was 21.3 billion yuan. Compared with large groups, individual Chongqing parts companies are very lean. Vientiane Group's sales revenue in 2002 was 11.8 billion yuan, and Chongqing's largest parts and components company Minjiang Diecasting Co., Ltd. had sales revenue of only 580 million yuan in 2003.
With the improvement of the quality standards of the international auto giants for their supporting enterprises, on the basis of ISO9000, the QS9000 and TS16949 automotive quality certification standards were relaunched, and most parts and components companies in Chongqing are unable to connect with them.
Because of this, Chongqing's auto parts can be zero in the industry as “little giantsâ€. It can be said that the procurement systems of other auto groups in China, especially GM, Ford, Chrysler and other international auto giants, can be said to be minimal. Even the proportion of purchases into Chongqing local auto companies is not large.
Chongqing matching opportunities
According to relevant sources of the Chang'an Group, local enterprises accounted for only 47% of the 271 supporting companies in Chang'an Automobile. Among the 193 supporting companies of Qingling Motors, local companies accounted for only 38%, ChangAn Suzuki’s supporting enterprises accounted for 42%, supporting companies in Chang’an Ford accounted for 35%, and Hongyan’s local supporting value amounted to only 23%. The matching rate of local auto parts companies in Chongqing is about 40% for local auto companies.
People in the Chongqing automobile industry even believe that the layout of the Changan Ford No. 2 automaker is set in Nanjing, the Yangtze River Delta, and that the Nanjing plant is also equipped with higher-quality models than the Chongqing plant. The reason is that the Yangtze River Delta region's auto parts suppliers The strength and scale far exceed that of Chongqing.
"The supporting industries are backward and there is no geographical advantage. It is no doubt that the global auto giants such as Ford will be introduced to the introduction of such global giants," said a person in charge of Chongqing Automobile Economics Commission.
“But the difference lies in the potential. As an old industrial city, the development potential of Chongqing auto parts industry is incalculable,†said Yang Lin.
According to the relevant commitments made by China's accession to the WTO, after July 1, 2006, the tariff rate of China's entire vehicle tariff is 25%, while the tariff rate for parts and components is only 10%. This difference of 15% in tax rate will become an “economic lever†to guide multinational corporations to implement local production of parts and components. At the same time, cost pressures will help international manufacturers shift their production bases to China. After the prices of raw materials such as steel and petroleum and petrochemicals soared, the production costs of foreign parts manufacturers increased dramatically, and it was not possible to pass the cost to the entire vehicle manufacturer. The labor of multinational component giants represented by Delphi and Weistom etc. The cost is still rising, and they can't escape the loss. Delphi reported a loss of $114 million this year.
With the increasingly prominent globalization of the automotive industry chain, cost pressures will prompt more and more multinational corporations to shift labor-intensive products in the parts and components industry to low-cost countries and regions.
"The main goals are China and India," Yang Lin said. "In June this year, Ford Sales Service Director revealed that he did not want to go through an intermediary company and he hoped to go directly to China to purchase spare parts."
This undoubtedly provided a major piece of information for the parts and components companies in Chongqing.