Current Situations About the Domestic Parts Industry

The development of the auto parts industry is particularly important for the quality of vehicles and innovation in China’s own brand. However, the closed development pattern has restricted the development of strategic partnership between the vehicle enterprises and the auto parts companies. In order to keep up with the pace of automobile industry, the auto parts industry should be further developed. The following is the conversation between a reporter and the deputy secretary-general of China Association of Automobile Manufacturers (CAAM).

Reporter: In recent years, China’s auto parts enterprises have made significant progress, but they still can not catch up with the pace of companies which produce vehicles. What are the reasons?

Dong Jianping: For a long period, products of domestic components industries are low-end. Generally, those joint ventures of vehicle manufacturers do not use domestic components because they are not confident in the quality of these products. With the opening up of the automotive market, there are restrictions on the number of vehicle enterprises. However, there is no restriction on the auto parts companies. As a result, many foreign enterprises invest and build factories in China. Their mergers and acquisitions have much impact on the domestic brands. Thus, the component industry can not catch up with the pace of vehicle industry, leading to the restriction of development of the domestic component industry.

Reporter: The domestic parts companies have been producing low-end products. Is it because of the little investment in the technical research and development?

Dong: Actually, technical research and development is a very complex process. At the beginning of the reform and opening up policy, domestic parts and components enterprises cooperated with many foreign companies. They provide technology to our domestic enterprises. Therefore, the domestic companies just have to manufacture according to the drawing. But with the expanding of the automobile market, many advanced component enterprises do not provide technology to Chinese companies. They just develop independently. Because many domestic companies are dependent on foreign technology, they can not survive without the core technology.

Reporter: Where is the development road for Chinese auto parts industries?

Dong: Although many domestic component enterprises have developed very well, most of their technologies copy from others. They do not grasp products’ core technology fundamentally. In fact, auto parts enterprises should cooperate well with the vehicle manufacturers. Meanwhile, the latter should take responsibilities to create good relationship with the former. After all, the auto parts industry can provide service for vehicle companies. For example, they can provide various auto part products to them such as bearings, gears, brakes and so on.