Although China's spare parts enterprises are blooming all over the country, they still remain in the middle and low end models. Compared with foreign companies, China's parts and components companies still have gaps in car awareness and future development. At the same time, China’s auto market is rapidly moving forward, and several international acquisitions have allowed Chinese auto companies to establish their position on the world stage. Compared with Chinese auto companies, the development of large-scale parts and components companies still lags behind. In the high-tech, high-quality, high-performance front-end market, the shadow of Chinese brands cannot be seen.

At the end of September, the General Office of the State Council issued the “Opinions of the State Council on Promoting Mergers and Acquisitions of Companies”. The auto industry ranks first, and it is expected that the merger and reorganization of auto companies will set off a new round of upsurge. Parts and components are the key factors that determine the success or failure of a country's auto industry. If a parts and components company wants to take a place in the fierce market competition, the best way is to form a large-scale parts and enterprise group through mergers and acquisitions. Therefore, while promoting the merger and reorganization of auto companies, the government can not ignore the integration of parts and components companies. Vehicle companies should also increase their support for the development of parts and components companies.

Domestic parts and components enterprises have little external contact

The number of contacts with auto companies has a direct impact on the development of parts and components companies. Chinese auto parts companies are limited to domestic models, local brands, and foreign cooperation is scarce. Some of the parts and components companies are satisfied with the single-factory and low-end models. Confidence in overseas car companies does not go away. Can not find the problem in time, not enough awareness of cutting-edge technology, has become the main factor in China's spare parts technology lagging behind. "Footstepping on several ships" is a response method currently adopted by domestic parts and components companies. Opportunities to build factories abroad when the time is right, and emerging countries have greater market potential. The meaning of going out is not the brand going out. What's more important is the product going out. At the same time, acquisition is the most common solution for us to “go global”, but we often cannot acquire core technologies. Technology is the soul of Chinese brands “going out”.

Promoting small and medium-sized enterprises with technical characteristics

Since 2010, the rise in raw material prices has caused concern among Chinese auto parts companies. China's parts manufacturing companies are marching in a fierce international situation. Behind the booming auto market in China is the tens of thousands of "poor and poor" local component companies. There are many companies with technical characteristics in a large number of small and medium-sized auto parts enterprises. Having a supportive policy for banks is the key to accelerating the growth of technological companies. How to bring these companies to the international stage is where the future lies. In fact, from the global auto industry mergers and acquisitions case, many of them are not all “Giant Elephant” projects. Second, even if the companies that want to buy and sell do not have much self-owned capital, there will be many financing channels. And, with proper financing and debt management integration, the new company may become a healthier company.

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Zhejiang Xuzhong Auto Parts Co., Ltd. , https://www.cnxuzhong.com

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