Foreign capital monopolizes China's automobile core components


Editor's note: It is an important issue for China’s auto industry to advance from a big automobile country to a powerful automobile country. Automobile parts are the soft underbelly of China's auto industry, especially in the field of core technology components and parts. Automotive electronics, engine EFI systems, turbochargers, transmission solenoid valves, constant-velocity drive shafts, etc. are basically monopolized by foreign advanced manufacturers. China's auto companies have been greatly restricted in their own development. The newspaper has combed the current domestic market conditions of several major systems, and invited industry experts to analyze and develop the pulse for independent parts and components development.

Antilock Braking System (ABS): Fatigue

In terms of the matching of automobile brake systems, China's entire vehicle companies have basically formed a situation in which BOSCH, TEVES, VALEO and other Chinese-funded and Sino-foreign joint ventures are supporting. U.S. vehicles such as Shanghai General Motors and other vehicle companies have become the supporting forces of DELPHI and TRW's Sino-foreign joint ventures in China, such as Shanghai Delphi Chassis Company, Langfang Lucas, Chongqing South Tianhe, etc.; Japanese brands such as Toyota and Honda are mainly Japan's ADVICS, AKEBONO, TOKICO, HITACHI and other foreign-funded enterprises in China are supporting, such as Guangzhou Rixin, Tianjin Aidekes, Guangzhou Aikesi, Suzhou Dongjigong, Foshan Jiebei. Korean brands such as Beijing Hyundai and Dongfeng Yueda Kia are mainly supported by South Korea's MANDO's joint venture in China.

According to report, Bosch's market share in China's ABS is about 78%. According to statistics from the China Automotive Technology and Research Center, as early as the end of 2008, the penetration rate of hydraulic ABS for passenger vehicles in China has risen to more than 90%. However, the hydraulic ABS for passenger vehicles is basically monopolized by foreign companies. Most of the products need to be imported, and a small part of them are from the mainland or TRW factories in China. Shanghai Automotive Brake Systems Co., Ltd. (a joint venture of the Continental Group in Shanghai) achieved a total production of 1.13 million units in 2007, accounting for 90.66% of the total output of the six ABS companies. Among local suppliers in China, although Asia-Pacific Mechanical & Electrical Corporation, Wanxiang Group, etc. have successfully independently developed hydraulic ABS for passenger vehicles, the construction of a mass production system lags behind.

Electronically Controlled Fuel Injection System: Oligopoly

In the electronically controlled fuel injection system, foreign giants have entered China and fully deployed.

The vehicle EFI system is divided into gasoline EFI system and diesel EFI system. Gasoline EFI technology has a high penetration rate, and major automotive companies have mastered the technology. The diesel fuel injection technology has been monopolized by several companies such as Delphi, Germany, Bosch, and Denso. China's diesel fuel injection system has also been dominated by foreign brands. Domestic companies mainly purchase products from Bosch, Delphi and Denso. Bosch products account for approximately 60% of China's EFI market, Delphi accounts for more than 10%, and Marelli again. Electric equipment is only available at Shangchai and Xichai. Used in products, local EFI companies account for less than 5% of the market.

In the EFI system used by domestic engine companies, the proportion of various brands of EFI systems is also generally the same. Due to the rapid growth of domestic demand and relatively low labor costs, foreign investment companies have been increasing. At present, there are more than 10 companies, such as Bosch, Delphi, Marelli, Denso, Motorola, Siemens VDO, United Electronics, Mitsubishi, and others. The trend of controlling wholly-owned assets has become increasingly apparent. Most of the well-known foreign companies have set up factories in China.

Gasoline turbocharger: three points in the world

With the continuous improvement of gasoline turbocharger technology, the future of turbocharged gasoline engine market has broad prospects. It is estimated that by 2015, the share of turbocharged engines in the Chinese market will increase by 20% from the current 10%, and the sales volume of turbocharged gasoline vehicles will reach 4 million, which is 2.6 times the sales volume in 2010, and the application ratio will reach 34%. It will reach 67% by 2020.

As the world's largest auto sales market, China's turbocharged gasoline vehicles have experienced significant growth, and have been preemptively deployed by foreign giants. The domestic car turbocharger matching market was monopolized by three companies with foreign backgrounds: Changchun Fuao Ishikawa Supercharger Co., Ltd., BorgWarner Automotive Components (Ningbo) Co., Ltd. and Honeywell. Turbocharger Systems (Shanghai) Co., Ltd., market share was 52%, 44% and 4%, respectively.

Changchun Fuao Ishikawa Supercharger Co., Ltd. is a joint venture between FAW Group Co., Ltd., Fujia Auto Parts Co., Ltd., Japan IHI Co., Ltd., IHI Turbo Co., Ltd., and Itochu Corporation, Japan. The company's IHI turbochargers provide support for Shanghai Volkswagen and FAW-Volkswagen for use on the 1.4 TSI vehicles such as MAGOTAN and Sagitar. BorgWarner Automotive Components (Ningbo) Co., Ltd. is the first wholly-owned factory invested and established by BorgWarner in the United States. The turbocharger produced by the company is supplied to Shanghai Volkswagen, Shanghai General Motors, and FAW-Volkswagen. It is mainly equipped with 1.8T and 2.0T models. Honeywell Turbocharging Systems (Shanghai) Co., Ltd. is a 100%-owned wholly-owned company of Honeywell Corporation, which produces and sells the world-renowned Garrett® Garrett® turbocharger and related products in domestic facilities. The companies are Shanghai Automotive, Brilliance Automotive and Chery Automobile.



Electric Power Steering (EPS): Internal and External Blocking

EPS can not only provide the stability of the car under high-speed driving, but also save energy. According to different models, the use of electronically controlled power system can reduce fuel consumption by 3% to 5%.

At present, most of the EPS required by domestic vehicle companies depends on imports. Products produced in China are also monopolized by joint ventures. Japan's Seiko NSK, Koyo KOYO, Aisin Aisin, TRW, Delphi, ZF and other internationally renowned automobile steering system manufacturers are all developing and producing EPS, and have occupied over 95% of the domestic EPS market.

Statistics show that the number of cars equipped with EPS in China reached 1.78 million in 2009, accounting for 21% of the total car production. The number of EPSs for self-owned brand cars was approximately 168,300 units, accounting for 9.5% of the total EPS, and accounted for 2% of the total number of cars. It is worth mentioning that Zhuzhou Yilida Electromechanical Co., Ltd., the company's own research and development of EPS, broke the monopoly of foreign capital, occupying more than 80% of domestic own-brand EPS products market share, EPS products are exported to the United States, India and Brazil.

According to the data provided by the steering committee of China Association of Automobile Manufacturers, the electric power steering system will increase from 1.78 million units in 2009 and about 2.4 million units in 2010 to 1/2 of the market share in the end of the 12th Five-Year Plan period. It will continue to grow to occupy 2/3 of the market share in the late 13th Five-Year Plan period.

Automatic Transmission Solenoid Valve: Foreign Capital Exclusive

The solenoid valve is the core component of the automobile automatic transmission hydraulic valve body which receives the electric signal from the electronic control unit (TCU) and changes the hydraulic pressure according to this electric signal change. It integrates mechanical, electrical, hydraulic, magnetic, and control technologies and involves precision machining, electronics, electromagnetism, hydraulics, electrical control, and testing and inspection technologies.

At present, China's auto transmission electromagnetic valve market is monopolized by developed countries like BorgWarner and Eaton, Bosch in Germany, and East Japan. The wholly-owned or joint-venture enterprises established by transmission manufacturers in developed countries in China have all purchased parts from original manufacturers from developed countries.

Although the manufacture of hydraulic valve bodies and solenoid valves in China has certain capabilities, it mainly meets the needs of the military industry, has low output and high costs, and it is difficult to meet the needs of mass production in the automotive industry. Many domestic vehicle companies and transmission companies do not pay attention to cultivating their own domestic suppliers, making automatic transmission hydraulic valve body and solenoid valve technology and samples without engineering opportunities. Therefore, the fundamental reason that hinders the development of hydraulic valve bodies and electromagnetic valve specialized enterprises of self-owned brand automatic transmissions in China is not at the technical level, but the domestic automatic transmission industry chain lacks user support and lacks opportunities for market development.

According to an authoritative department's forecast, in 2015, domestic autonomous passenger vehicles require more than 27 million electromagnetic valves for automatic transmissions. Domestically, it should break through the design and manufacture of hydraulic valve bodies and solenoid valves as soon as possible to achieve industrialization. Otherwise, the product cost and quality of domestic autonomous brand auto transmissions will be difficult to control, and the industrial chain will be difficult to form.

Constant speed drive shaft: one single

At present, Shanghai Natiek Driveshaft Co., Ltd. has a monopoly position in the domestic constant velocity driveshaft market. The company was founded in 1988 and was invested and established by Hua Yu Automobile Co., Ltd., a subsidiary of Shanghai Automotive Industry Corporation (Group) Corporation, and GKN Drive Systems International Co., Ltd., a subsidiary of the British GKN Group. Shanghai Natiefu provides constant speed drive shafts, cross universal joint drive shafts and precision forging products for many passenger car companies such as Shenlong, Dongfeng Honda, Shanghai GM, and Shanghai Volkswagen.

The reason why NTT is monopolizing the China's constant speed drive shaft supporting market is as follows: Domestic independent brand drive shaft enterprises do not master the core technology of constant speed drive shafts for passenger cars, and they cannot compete with NTI for the constant speed drive shaft market; foreign or joint venture use The supporting power of auto parts and components is controlled by the foreign party. Foreign parties claim that the production of passenger cars must use Nakfufu constant speed transmission shafts. In this way, it is very difficult for the domestic independent brand drive shaft enterprises to get the opportunity for the development and matching of the constant speed drive shaft.



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