Profit moisture transmission pressure auto parts price drop difficult

The price cut in 2004 is still the main theme. However, the streets are full of vehicle price reduction information, but do not see the sound of accessories to reduce prices, in addition to "a substantial decline in the price of more than half of Nanjing Fiat accessories" and "BYD automobile parts and components of an average of 25% decline", the rest Almost negligible. It's really difficult to lower the price of the whole vehicle. So why is it difficult to cut prices for accessories?

Judging from the external objective conditions, the problem arises from the drop in vehicle prices and raw material prices of automakers. It is understood that in order to ensure its own profit, OEMs are required to reduce their prices by 8% to 10% each year. Recently, OEMs have issued “double-regulatory” notices to the upstream parts and components companies: The parts and components companies are required to reduce their prices to the specified range within a specified period of time. If the upstream manufacturers refuse to implement them, the automaker will cancel its supporting qualifications. Apart from the price reduction by automakers, the increase in raw material prices is also one of the reasons why the prices of accessories have been difficult to reduce. In the case of seals, for example, the price of plastics, the main raw material, rose rapidly in 2003, leading to a 4% to 6% increase in the cost of seals and a further shrinkage in profit margins.

However, the main reason for the price reduction of accessories is still from the company itself. As we all know, one of the magic weapons for reducing the cost of parts and components industry is to form a large-scale economic scale. However, the fragmentation, chaos, and discrepancy of China's parts and components companies is obvious to all. The fragmented supporting market has seen parts and components companies grow bigger and stronger. Whether it is raw material procurement, product process control, or sales, distribution and service of finished products, Chinese auto parts companies have not yet formed a large-scale cost advantage; in addition to the irrational product structure, many parts and components companies have serious production capacity. Excess, large amounts of assets are idle, and fixed costs increase. In addition, because new products cannot be developed, or because the development of new products is constrained by capital and technology, Chinese auto parts companies cannot form mass production capacity. On the other hand, China's auto parts industry is still a labor-intensive industry. Although China has abundant cheap labor resources, its low management level offsets the low cost of labor in China. At present, the labor productivity of China's auto parts companies is only one-eighth that of Japan's parts companies. It can be seen that the high cost of products and low productivity are the basic reasons for the difficulty in price reduction of auto parts in China.

When the vehicle market is profitable, it can still conceal the structural defects of the parts and components industry. However, when the entire vehicle market is in a fiercely competitive period, as it is now, the pressure of squeezed profits is transmitted to the parts companies, and the congenital structure The problem began to be exposed. The difficult question now is how many companies like Wanxiang Group can stand out from the market competition mechanism entirely. What kind of economic means and management techniques does the government use to motivate the healthy development of China's parts and components industry? How to deal with the KD surge after joining the WTO? How can the princely separatist industrial structure and Chinese and foreign "neutron-style" supporting structures break through? It seems that the future of China's parts and components industry depends not only on its own struggle but also on the government's effective macro guidance. It may be possible to learn from Japan, South Korea's current development path, and the successful experiences of emerging countries and regions.