Chinese auto parts companies are bullish on the world's most profitable

China's bullish car market is expected to grow at an average annual rate of 15% over the next five years

Despite the recent slowdown in sales of China's light vehicle market, professional information agencies are still bullish on the Chinese auto market.

Global information company AlixPartners said yesterday that sales in China's entire automotive market will maintain an average annual growth rate of 15% from now to 2016. The agency focused on this point of view yesterday in its "2011 China Automotive Outlook Survey Report."

Local automakers have the lowest market share "In the first few months of this year, China's auto market experienced a period of slowdown due to the government's cancellation of the automobile industry's stimulus policies and partial restrictions on new car purchases." Alix Partners Director General Manager Roman said.

“In spite of this, the cross-industry senior officials participating in our survey are still very optimistic about the long-term growth of the market. They believe that before 2016, the average annual growth rate of the Chinese auto market is 12% to 15%. There is no high growth like 2009. , is a very healthy figure." Roman said.

The main driving force behind this growth expectation comes from the growth of household wealth. At present, of the urban households with an annual income of more than 60,000 yuan in China, 72% own a car, but this income-level family only accounts for 20% of the total number of urban households. Therefore, the growth potential is evident. AlixPartners believes that the number of households whose income exceeds this threshold is expected to double in the next five years.

Although the market outlook is still optimistic, local auto manufacturing companies in China are facing greater operating pressure. According to the survey results of 40 domestic and multinational company executives, the market share of well-known companies such as BYD and Chery has recently declined, although the market share of Chinese OEMs has slightly increased in 2010.

"Interestingly, companies that could have enjoyed the glory the previous year often did not succeed in the following year. We have witnessed this happening to Geely, Chery, and today's BYD." Roman believes that it is a global success. The auto manufacturers have accumulated and cultivated for many years in experience and technology. Therefore, it is not easy for new market participants, including many Chinese companies, to reach the maturity level of multinational companies in a short period of time.

A set of figures justified this view. Among the major countries that have a domestic auto industry, China’s local automakers have the lowest market share. Statistics show that Japan’s domestic OEMs have the highest market share in the region, reaching 96%. Followed by South Korea, it reached 95%. China, after Germany, France, the United States, Russia, Italy, and India, is only 29%. Although it is expected that the market share of Chinese domestic automakers can be increased to 34% after five years, this figure is still not high.

The report of China's auto parts last year with 1.6 trillion AlixPartners pointed out that China's auto parts suppliers continue to maintain the highest level of profitability in the world. The average profit margin in 2010 is about 10%, which is 2.4 times higher than that of vehicle manufacturers. Percentage points, and double the 2008 profit. Data shows that sales revenue of auto parts in China increased by 44% in 2010, reaching approximately RMB 1.644 trillion.

In recent years, China’s auto parts manufacturers have maintained the strongest ability to attract gold among their global counterparts, and the rapid development of China's vehicle manufacturing industry is only one reason. AlixPartners director Wu Jinghui said in an interview with the “First Financial Daily”. This is mainly related to the status quo of the fragmented Chinese auto parts market.

Different regions and different brand systems in the Chinese market have their own supply systems, and the degree of integration in foreign markets is relatively high. 5% of the suppliers provide 80% to 90% of the entire market, but the Chinese market has not reached that level. The stage of integration. "Wu Jinghui thinks.

“When China's parts and components market can develop to a mature foreign market, Wu Jinghui said that if the market has been improving and there has been no decline, then every spare parts company will have profitable space, and it will not produce a co-opetition, only the market. With the decline, the entire industry will increase its scale, reduce costs, and increase its concentration.

In the perspective of new energy vehicles, industry experts expect that electric and hybrid vehicles will achieve a high degree of penetration in the Chinese market due to the stimulation of the Chinese government. It is expected that the average market share of the entire automobile market will be between now and 2016. Will reach 13%.

"Most of the respondents believe that the significant growth of electric and hybrid vehicles is still only economically viable under government subsidies." Li Lihua, vice president of AlixPartners Shanghai office, said, "However, for new energy The market share forecast of the car in the future is already much higher than the industry experts' estimation of the penetration rate of new energy in the mature market, which shows that both the Chinese government and the automotive industry attach great importance to this field.” (Liu Xia)

From 2005 to 2010, the operating profit rate of parts and components companies and vehicle manufacturers was 5.7% in 2005.

6.2% 4.5% in 2006

7.4% 5.4% in 2007

5.1% 3.2% in 2008

8.5% 8.8% in 2009

10.0% 7.6% in 2010