Procurement everywhere rushed to accelerate multinational component giants into China


Many indicators show that the Chinese auto industry is rampant. However, attentive people will find that few indicators can be compared with the speed of foreign capital infiltration in China. At an auto industry seminar recently held, relevant experts pointed out that while the Chinese auto market is booming, the rate of foreign parts companies entering China is also growing at an unprecedented rate, especially this year, the number of foreign-funded joint-venture parts companies is increasing. It is almost twice as much as last year.
On September 1 this year, Visteon, a world-renowned auto parts supplier, announced in Yokohama, Japan that its Asia Pacific headquarters had been relocated to Shanghai, China. Visteon stated that the move was mainly focused on improving its ability to support customer service in the region; and on November 8th. , Japan's Denso, which ranks fourth in the world's auto parts industry, announced that "Tianjin Foo Electric Installation Air Conditioning Co., Ltd.", which is cooperating with the China FAW Group's spare parts division, Fu Ao, has been established in Tianjin and will be put into production in February 2005, specializing in production. Car air-conditioning, so far the company's production base in China has reached 9.

In fact, in the past one or two years, with the rapid development of the Chinese auto industry, foreign-funded parts companies are advancing toward China at an unprecedented rate.

With the entire vehicle companies go hand in hand

In general, 70% of the added value of the auto industry is created by parts and components. The quality of parts and components directly affects the level of profitability of the auto industry. The auto parts industry plays a decisive role. Therefore, when the in-line analysis company makes predictions about the future, the vehicle part and the automobile parts part must be half of each other. As the world’s automobile giants marched into China, the parts and components companies that depended on the entire vehicle companies also followed suit.

In the world, the world-renowned major automobile factories all have their own supporting plants. In the United States, Delphi Corporation is a major supplier of General Motors, Visteon is the largest supplier of Ford Motor Company; in Germany, Bosch Corporation is the largest supplier of German Volkswagen; and Japan Electric Co., Ltd., the world’s fourth largest auto parts supplier. The loading company is the largest component manufacturing company affiliated to Toyota Motor Corporation, and France’s largest auto group PSA Group also has its own stable supplier.

Visteon is the world's second-largest auto parts supplier. It was independent from Ford Motor Company on June 28, 2000 and is a global Fortune 500 company. In 1994, SAIC and Visteon jointly invested 223 million U.S. dollars in the establishment of a joint venture company, Yanfeng Visteon Automotive Trim Systems Co., Ltd., which is tied with the local leading auto group and is the first step for most foreign investors to enter China.

At present, this 50%-owned company in China and abroad not only has a strong production base in Shanghai Anting, but also owns a wholly-owned subsidiary Yanfeng Visteon (Chongqing) Automotive Trim Systems Co., Ltd. in Chongqing, and also holds Shanghai Yanfeng Johnson Controls. Co., Ltd., Yanfeng Visteon Automotive Electronics Co., Ltd., Yanfeng Visteon (Beijing) Automotive Trim Systems Co., Ltd., Dongfeng Visteon Automotive Trim Systems Co., Ltd.

The company's cockpit system, interior and exterior systems, seating systems, and interior electronics products are mainly supplied to Shanghai Volkswagen, Shanghai GM, FAW-Volkswagen, Dongfeng Shenlong, Changan Ford, Beijing Hyundai, Beijing Jeep, Aeolus and other large vehicles. enterprise.

As the former president of Yanfeng Visteon, Tayyig, who currently serves as president of Changan Ford, is very optimistic about the future of China's spare parts market. He said that the parts and components companies will be an industry that cannot be overlooked in the future of China's future market. Therefore, as a foreign manager, he currently has a major task of cultivating people who can take over his position to truly realize the localization of talents. This is an important part of the internationalization of international companies.

Bosch, the world’s second-largest auto parts manufacturer, has established a nationwide scaled parts distribution network in China and has 153 after-sales service stations in China.

ArvinMeritor, an auto parts company that is one of the top 500 companies in the United States, has set up three joint ventures in mainland China to provide supporting services to major domestic automobile manufacturers. Arvin Meritor’s annual global sales are 7.5 billion U.S. dollars. Its customers in China include Shanghai GM, FAW Group, Volvo, and Xiamen Golden Dragon.

According to statistics, there are currently nearly 500 parts and components companies that foreign investors have invested in China. Most of the world’s leading auto parts companies have established joint ventures or wholly-owned enterprises in China.

The highest profit in the Chinese market

In China, as the price of cars is much higher than that of foreign countries, the Chinese market is now the most profitable market for manufacturers.

Delphi Automotive Systems, the world's largest auto parts manufacturer, has so far established 13 wholly-owned and joint ventures, a technology center and a training center, with a total investment of more than 400 million U.S. dollars. The total business sales in China are nearly 500 million U.S. dollars, and one-third of the Chinese enterprises' products are used for export.

Delphi’s global sales volume declined slightly in 2000, but the Chinese market has maintained a strong growth momentum. In recent years, Delphi's annual sales volume in China has maintained an increase of over 10%. This is Delphi's unique business in more than 40 countries and regions around the world.

According to Battenberger, chairman and CEO of Delphi Automotive Systems, “The entire vehicle companies in the world are almost all coming to China to build a base, so Delphi will undoubtedly use this as their 'main battlefield'.”

Just last month, when General Motors used QQ of Anhui Chery Automobile to infringe upon its own joint venture company, Wuling Spark Intellectual Property, it had passed information internally to its alliance company Delphi, hoping that Delphi could stop parts of Chery. Supply and plans for future cooperation.

However, Delphi did not listen to his own partner's words, but when outsiders had guessed that Delphi was about to withdraw from Chery, he officially released news to the outside world, saying that he was not only not intending to withdraw from Chery, but will continue to continue with Chery in the future. Multi-faceted cooperation.

Multinational giants "check point" everywhere

It is understood that as early as last March, Nissan and Dongfeng had not formally signed an agreement. The team of 28 auto parts companies in Japan led by Toshio Ohno, president of Japan's Auto Parts Industry Association, and Shimao Toyohiko, vice chairman, went deep into Hubei. Shiyan, Xiangfan, Wuhan, and other places "check points." After the marriage of Dongfeng and Nissan, the auto parts companies that were formerly associated with Nissan also moved to Hubei Province and other provinces in the mainland of China to participate in the competition of the new Dongfeng Auto Parts Market of more than 320 million yuan.

Cai Yong, general manager of Dongfeng Components Division, said that the current development trend of China's auto parts industry and the global global auto parts procurement, which will make the competition more brutal.

Flocking into the Chinese market is far more than just a gambling game. Chen Jinya, chairman of Delphi Automotive Systems China, said that the competition has been driving down the prices of local auto parts and gradually abandon the closed doors that are controlled by Chinese partners of joint venture companies and their suppliers. "Foreign manufacturers are exerting tremendous pressure and demanding lower prices. At the same time, the government is indeed reducing the protection of the local automobile manufacturing industry."

According to statistics, in 2002, the total sales volume of the domestic auto parts industry was 75 billion yuan. Among them, Delphi, Denso, and Bosch in the United States accounted for 14% of the market share in China (350 million installed USD, Bosch 150 million US dollars, and their dozens of sole proprietorships and joint ventures in China are still less than 1% of the total number of domestic auto parts companies.

Multinational companies’ purchases surged

If these factors have become an important factor in attracting foreign-owned parts and components companies to China, then China's policy restrictions can also be another objective factor in the influx of foreign-funded parts and components companies into China.

Over the years, China’s industrial policy has always required joint ventures to achieve a certain percentage of the procurement of spare parts, and in a certain period of time, the government will also give enterprises certain tax incentives based on the localization rate. Therefore, the entire vehicle company will increase the procurement of local parts and components as much as possible on the premise of ensuring the outsourcing of core components.

It is reported that the forthcoming automobile industry policy will still propose some new requirements and guidance for the localization of parts and components procurement. It is precisely for this reason that foreign-branded vehicle companies have increased their procurement tasks from parts and components companies established in China with foreign brands, not only bypassing the policy barriers to outsourcing parts and components, but also greatly satisfying themselves with regard to quality and branding. Aspects of the request.

The giants of foreign-invested parts began to increasingly shape China into their own manufacturing center in the Asia-Pacific region.

In this way, not only foreign-funded enterprises can integrate their own global procurement systems, but Chinese companies also find that they can buy inexpensive world-famous branded parts and components in China. When many aspects of goodwill are concentrated in one place, To a certain extent, the global procurement of spare parts for Chinese automotive companies is quietly evolving into another form of “Chinese procurement”. This “China procurement” comes not only from China but also from the world.

A sales manager of Kumho Tire Co., Ltd., who is not a big fan of the business, said to reporters that the opportunities for these local automakers to shop around have greatly increased. Foreign brands that do not have local production companies are not only in terms of price. Can not suppress opponents, and often lose a lot of opponents in China's interpersonal contacts.

In September of this year, Ford Motor (China) Co., Ltd. confirmed from outside that from July 2002 to mid-2003, Ford Motor Company will purchase more than one billion US dollars of auto parts and components in China within one year.

Nick Scheele, president and chief operating officer of Ford Motor Co., said expanding the procurement of auto parts in China will increase Ford’s visibility in the Chinese mainland market. It will also save costs for Ford and keep Ford’s global competitiveness. One of the leading strategies.

Insiders believe that the reason for the rapid expansion of Ford’s auto parts purchases in China is not only the cost-saving needs of Ford Motors, but also the strongest support for Ford China’s joint venture and its atomic company, American Visteon. Therefore, this is also the reason. Ford Motors is expanding its business in China.

As early as April of this year, Visteon’s joint venture with Dongfeng Group and SAIC Group established a Dongfeng Visteon joint venture in Shanghai. Dongfeng has also become the second large-scale automobile group that Visteon successfully bundled after entering China. After this, in addition to SAIC's subordinate vehicle companies, Dongfeng Group's subsidiaries will also directly purchase a variety of spare parts through this newly established local joint venture company, which will greatly save cost and time.

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