Experts in the global automotive industry consulting firm AlixPartners today in Shanghai, Click to view more weather forecasts for cities of Shanghai and the latest research published report said that China's auto parts industry faces increased costs and profits arising from the impact of external competition, will trigger a series of recent industry consolidation, the The report cited in the top 50 most profitable companies in the sample survey data indicated that 80% of executives surveyed are planning to mergers and acquisitions, of which more than half of the companies considering an international mergers and acquisitions.
A researcher at Great Wall Securities, said this trend is also recognized that the researcher told reporters that access to technology and R & D is potentially the most important driver of merger and reorganization, followed by the acquisition of overseas sales channels and customers, these factors have become a lifeline to enhance enterprise efficiency.
Profit margins will continue to decline in the next three years
Galaxy Securities, said that the spare parts industry from 2004 to 2007 with 31% in compound annual growth rate, AlixPartners data showed automobile industry in 2007, the average profit margin of only 4.5%, while the spare parts profitability is as high as 7%.
At present, China's auto parts industry growth and profitability in the industry, both better than the vehicle manufacturer.
However, the sustainability of this advantage is not strong. Some experts said that from an external perspective, this year, yuan appreciation and lower export tax rebate policy to bring the cost of parts and components industry will be greater than 10%; from the inside perspective, energy and steel costs caused by rising raw material is enormous, while the zero - component suppliers of these costs can not be passed on to customers, profit margins will be evident decline.
In fact, the acceptance of AlixPartners parts of the country's 12 largest enterprises, a considerable business has said in 2007, compared with the previous three years, a noticeable decline in profit margins, 67% of companies predict the future level of three years profit margins will continue to decline, There are data show that China's domestic auto parts supplier's net profit rate than the joint venture has been reduced by 2%.
To improve the industry concentration is a way out
Its also has auto parts company who told reporters that Shanghai Automotive, China's highly fragmented industry, spare parts, the former company's market share hundred only 50% of the entire industry, far lower than other countries, the degree of concentration, therefore, with the vehicle Manufacturing enterprises are surging wave of mergers, compared parts enterprises reorganization is inevitable, at present, just at the end of the acquisition of Nanjing Auto, Shanghai Auto is being tasted the two-joint, technology and channels to share the sweetness.
AlixPartners Executive Stefano said, "China's auto parts industry, had yet to emerge, as Bosch or Michelin as the real leader; believe that mergers in the industry furnace, so that companies have always appeared in China, the question is who will be be the ultimate winner. "
The findings of AlixPartners revealed that only 6 parts enterprises in China's sales volume more than 1 billion U.S. dollars, the size of only 50 companies sold more than 5 million U.S. dollars, and of these 50 companies there are still 4% of foreign-owned or joint-venture enterprise, in short, China's domestic enterprises small.
Industry experts also believe that the restructuring of parts enterprises from overseas components for dealing with the challenges the only way. AlixPartners The data provided show that China's total exports of auto parts enterprises only accounted for 14% of total sales, that is, the main market, local parts enterprises or Chinese, which tens of thousands of small, concentrated in the low-end products in order to price wars as the key competitive tool for local businesses when faced with low-tariff access to foreign products in China, the challenge is undoubtedly grim.
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