In 2005, when China’s auto parts exports exceeded imports for the first time, the US “Wall Street Journal†published a feature article stating: A few years ago, parts produced in China were still a low-quality image, but through cooperation with foreign companies, Through the introduction of technology and R&D and innovation, the quality of auto parts made in China has been rapidly improved, and China is rapidly becoming a global leader in the production of auto parts.
Indeed, in 2006, China's auto parts and components are not only changing in quantity and quality, but also accompanied by changes in the competitive landscape and industrial structure.
Industry chain security has been valued by more and more companies
Turning aside some of the memorabilia of large domestic parts and components companies, it is not difficult to find that the alliance with the upstream and downstream companies in the industrial chain has become a unique “scene†in the automotive industry in 2006.
Established an international strategic alliance with Beiqi Foton, Bosch in Germany, and AVL in Austria to form a “product research and development community†with dozens of powerful component suppliers. It is even a joint venture with Shaanxi Heavy Duty Truck and Chongqing Hongyan. The FAW Group has reached a strategic partnership, which has given Weichai, an independent engine supplier that has been separated from China National Heavy Duty Truck Group, a more secure industrial chain relationship and a broader market space.
In fact, this kind of industry chain alliance maintained through the supply relationship has long existed at home and abroad. However, what we usually notice is that when the company reaches a certain development period and stage, some loose supply relationships are insufficient to support a certain core. The leap-forward development of the company (or out of the dilemma), a more closely linked ties will emerge, it makes every company in the industry chain have a more clear direction of development.
From an international perspective, since September 2005, Ford Motor Company has partnered with close to 30 global first-tier suppliers such as Bosch, TRW and ZF as its strategic partner for the long-term development of the company in its global supplier team. Further focus on resources, reduce costs, improve quality, in order to form a sustainable business operation mode.
Purchasing more than $1 billion in China is no longer a legend
In mid-2006, news came from the Tianjin Port of China Customs: From January to July of 2006, the value of automobile parts exported from Tianjin Port increased by 61.1% over the same period of 2005, and the export of auto parts and components increased rapidly. The same exciting news came from different directions: Ford’s auto parts purchased in China will grow from 1.6 billion to 1.7 billion U.S. dollars in 2005 to 2.5 billion to 3 billion U.S. dollars in 2006; VW’s procurement in China The number of auto parts increased by 10 times from $100 million in 2005 to $1 billion in 2006. At the same time, multinational companies such as Dai Ke and General Motors have also expanded their procurement in China. Correspondingly, the export of parts and components in some domestic provinces and cities has also grown rapidly. Zhejiang, Jilin, Anhui, Hunan...
I remember that the industry’s still-famous passages two to three years ago—GM and Ford and other world giants are planning to purchase more than US$1 billion in auto parts every year in China, because they can’t find a suitable quantity of parts that meet quality standards. Sign "blank check". After 2006, this paragraph no longer needs to be passed.
Many of the world-class companies Peugeot-Citroen, Cummins, Caterpillar, and TRW can no longer stand by, and their purchasing staff from time to Can be seen in a Chinese component manufacturer.
A former world leader is moving to China
Delphi, the company that had been ranked first in Fortune 500 auto parts category before 2004, had lost ground in the United States since it announced its entry into bankruptcy protection in North America in 2005. It has been more than a year since. In seeking to sell its non-core assets, in order to successfully weather the storm. What is completely different from the situation in our hometown is that we have seen a brand new Delphi in China. In April 2006 Delphi Corp.’s Delphi Plc Electrical Systems Co., Ltd. announced that it has officially opened a new electronic/electrical distribution system factory in Yantai, Shandong, China; in the same month, the Delphi China Science and Technology Research Center officially opened in Shanghai; In April, Delphi announced the signing of an agreement with Guangxi Yuchai and Jiangling Motors, two Chinese companies have selected their diesel injection systems to deploy cars, and in June 2006, Delphi announced increased stakes in its automotive air-conditioning production joint venture in China. And in July 2006, Delphi officially established a trading company in China to provide a variety of Delphi original supporting quality auto parts products to China's auto aftermarket, sounding its way into China's auto aftermarket. The horn...
The above only intercepted some of Delphi’s business operations in China between April and July 2006. From this, we can clearly see that the former “boss†has not been affected by its hometown disaster. For its global balanced development, Delphi is continuously shifting its business to such a high-growth market as China.
Catch the China Express is the guarantee for the future development of multinational companies
If we want to make an analysis of the phenomenon of multinational companies sourcing in China and setting up factories in China, then one thing is clear - that is, long-term rooting in China.
The reason why this is said is that there are two evidences that can best explain the problem: one is that there are continuously world-class companies setting up R&D centers in China, and the other is that foreign companies are continuously infiltrating the Chinese auto aftermarket.
In addition to Delphi’s setting up of an R&D center in Shanghai, in January 2006, DuPont Performance Elastomers Co., Ltd. established a technology center in Shanghai, becoming another integrated R&D center in addition to the United States and Japan; In July, Valeo set up its second R&D center in Shanghai; in August 2006, Cummins East Asia R&D Center, which was jointly established by Cummins and Dongfeng, was opened in Wuhan... At the end of 2006, another giant of component companies - The Schaeffler Group's Asia Pacific R&D center is also under construction.
On the other battlefield of the Chinese market expansion, an "off the court" match that is no less than a formal confrontation has been fully launched. Bosch, Delphi, AC Deco, Honeywell, Denso, Mahles, Federal-Mogul, and Tenneco have all worked hard to quickly expand their aftermarket in China. Another ASIMCO company, a native of China, also showed its determination to advance to the Chinese aftermarket in the fall of 2006. The two giant tire giants, Michelin and Goodyear, staged a cyber war in China with their powerful strength. It is worth noting that NAPA, the top-notch auto distributor in the United States, who had returned eight years ago, also re-raised the banner of the Blue Pacers with Shanghai as a bridgehead.
Following the lead of Delphi, another US component giant, Dana, formally filed for bankruptcy protection in the United States District Court in March 2006. In times when markets such as North America continue to suffer turmoil, in order to survive better, the procurement of multinational component giants from some emerging market countries including China has become an inevitable necessity for their future development. While admiring the old boss’s move to China, Bosch, the world's realest parts company in the world, is also increasing its investment in China. At the same time, some of the more professional world-class suppliers, such as BorgWarner, Pierce, etc., have also settled in China. Market phenomena are showing that entering the Chinese market has become a guarantee for the future development of multinational companies.
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