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Chinese auto industry is one of the key global participants, but there is no core technology in the gigantic Chinese auto market. No matter the auto industry or key auto parts industry, they are still dominant by foreign investors. The problem of key auto parts has become the consensus within the industry. However, solving this problem is not easy, and auto parts manufacturers are seriously dealing with this situation.
Recent biggest research and evaluation activities from china[link widoczny dla zalogowanych] industry showed that auto parts companies with foreign investment backgrounds have absolute advantages in the Chinese market. China has become the biggest auto market worldwide, and multinational auto parts manufacturers have been investing more and more in the Chinese market. Foreign auto parts manufacturers are relying on their advantages such as technology, management and existing customers’ relationship, and are performing well in the Chinese auto market, particularly the high-tech sector, as they are absolutely leading the whole market.
It has been the foreign investors who are mastering the core technology of key auto parts products, and are dominating the auto parts supplying chain to car manufacturers. At the same time, they are developing a whole system from research and development, to training, manufacture and sales, and are integrating their enterprise investment in the best distribution and layout formation. The current situation is also accelerating their expansion in China: according to foreign data, during the financial crises, the profits of auto parts suppliers worldwide declined significantly, and good performing emerging markets have become their new hopes. Under this situation, from 2008 fourth quarter to present, well-known auto parts enterprises such as Borgwarner and Johnson Controls formed sole ownership or joint venture factories in China.
Under the current market status auto parts manufacturers are working to change the situation, but the market is still dominated by foreign investors. Experts believe that there are a few core competitiveness must be focused by auto parts manufacturers.
1. Ductility: Core competitiveness is a potential for markets diversification. In other words, one core technology can enable the company to have advantages in a few core products.
2. Practical: Core competitiveness can give clients a better end-user value, because all competition existed is for satisfying the requirements of customers. So products must have practical value for customers.
3. Uniqueness: Core competitiveness must not be easily copied by competitors. Generally speaking, core competitiveness of an enterprise is non-assessable and unachievable by its competitors. The more intelligent components within the structure of core competitiveness, the longer period the enterprise can rely on it to have advantages over its competitors.
4. Low cost: Cheap labor cost is the advantages for Chinese auto parts manufacturers. However, low cost does not mean low profits. Good cost spread can still turn into high profits.
5. Good service: From the view of brand image and goodwill, value of services can be reflected in the late stage value. The pre-sales and after-sales play an important role in determining the sustainable development of the enterprise, which include pre-sales advertisement and after-sales support.
6. High quality: Quality of products is obviously controlling the operation of an enterprise. Only the best quality can secure the status of an enterprise.
7. Integrity: A good enterprise product line is not trying to consider all products as its leading products because this will lead to failure. A full product line can fulfill different requirements without repeating.
Solving the problem of key auto parts must raise the core competitiveness of enterprises in order to have a better competition with foreign investors. Without a core competence, there will be no creativity, independent brand and competition. So this is the key to success in the auto parts industry.