China's Special Purpose Vehicle Parts Enterprises Urgently Need Technology Improvement


At the previous Shanghai special auto show, Li Guiping, deputy general manager of CIMC Vehicles (Group) Co., Ltd., was very intriguing. He said: "Special car parts are the backbone of the special car industry. To a large extent, it determines the level of special vehicles. However, from the perspective of the situation reflected in the exhibition, China's special car parts are relatively single and their technology is not enough. Advanced, we need to work hard."

Similar experience with Li Guiping was Hao Benxi, deputy general manager of Qingdao Zhongqi Special Automobile Co., Ltd. In predicting the domestic-made special vehicles participating in the international market competition, he believes that domestic-made special vehicles in the local market may have the upper hand, which is mainly due to the support of imported spare parts.

The bosses of the two dedicated vehicle manufacturers conveyed the same message from different perspectives: China's special-purpose vehicle spare parts are still difficult to meet the demand for the export of special-purpose vehicle vehicles and the domestic high-end market.

Foreign-owned special vehicle parts and components companies usher in "good days"

In recent years, the export volume of China's special-purpose vehicles has increased greatly. In 2004, the export volume of special-purpose vehicles in China reached more than 20,000 vehicles, and in 2005 it increased to about 30,000 vehicles. Accompanied by the rapid growth of China's special vehicle exports, domestic foreign-funded special-purpose vehicle parts and components companies usher in a "good day."

WABCO is a world-renowned supplier of automotive control systems. CA Zhiming, the trailer manager of WABCO (China), told reporters that WABCO's trailer control system began mass production in China in 2005. It is expected to increase by 100% from the previous year. According to Chen Zhiming, 80% of special cars exported from CIMC use WABCO products. The high-end tankers manufactured by Guangdong Yongqiang also use WABCO products.

The Netherlands Haiwo International Group set up a factory in China in 2004. In two years or so, its hydraulic system products have reached 40% of the domestic market share. Apart from being used in special vehicles for export, it has also been adopted by some domestic high-end customers. As the last piece of the global layout of Haiwo, Haiwo has become one of the leading suppliers of domestic OEM and special vehicle manufacturers.

Compared with the above-mentioned parts and components enterprises that later entered the Chinese market, BPW and JOST entered the Chinese market more than 10 years ago, which has a deeper impression on the changes in the Chinese market. The axles produced by BPW have always been the products with the highest sales volume and advanced technology among similar imported products in the Chinese market, and this "quantity" is also really large with the growth of China's special vehicle exports. JOST's business in the Chinese market already accounts for 8% of its global business. CITIC exports to the United States more than 50% of its semi-trailers use JOST's products manufactured exclusively in Shanghai.

Domestic market demand will not always go "low end"

At present, the annual demand for special vehicles in China is around 500,000, and 6% of exports are eliminated. The capacity in the domestic market is quite alarming. In the past, the proportion of high-end special-purpose vehicles in the domestic market was small, and this situation has gradually changed in recent years.

With the development of cities in our country, the proportion of special-purpose vehicles for middle-to-high grade use in cities is increasing, especially in international metropolises such as Shanghai and Beijing, and large purchase orders for high-end special-purpose vehicles are held in their hands.

In June this year, in an interview with reporters, Cai Xiaoqing, Director of the Shanghai Economic Commission’s Equipment Division, revealed that Shanghai urgently needs a large number of high-grade vehicles that match the image of Shanghai and meet the needs of urban functions, including transportation and logistics vehicles, sanitation vehicles, and so on. Construction vehicles, fire engines, food trucks, etc. In particular, he pointed out that Shanghai is embarking on cold-chain construction, and Shanghai's cold-chain transport vehicles are in short supply. Due to the upcoming 2008 Olympic Games, Beijing’s demand for special vehicles for urban use has also increased dramatically.

In addition to the city's demand for special vehicles, the increase in the number of domestic joint ventures and wholly-owned enterprises has also led to higher demand for high-end special vehicles. Foreign customers and domestic high-end special-purpose vehicle customers pay more attention to the quality and function of the vehicle when choosing a special vehicle. The price is no longer the primary factor affecting the purchase. In order to meet the needs of users, special-purpose vehicle companies do not hesitate to choose high-priced but advanced technology and reliable quality components.

In addition, the upgrading of products for special vehicles will also promote the upgrading of special vehicles. BPW's director of global marketing, Frank Simon, told reporters that at present the semi-trailer on the Chinese market uses twin-axle axles. Many years ago, Europe also used twin-axle axles. I think China will use single-axle axles in the future, just like Europe today. In this development trend, our axles will have more and more advantages.

Domestic Special Vehicle Parts Enterprises Urgently Need Technology Improvement

Experts predict that the total annual production of special vehicles in China during the “Eleventh Five-Year Plan” period will reach 900,000, of which exports will reach 60,000, and the demand for high-end special vehicles in the domestic market will also increase significantly. After China's accession to the WTO, with the reduction of tariffs, the restrictive factors for the entry of foreign auto parts and components companies into China have gradually decreased, the price gap has narrowed, and the possibility of foreign auto parts companies entering the Chinese market has increased. Enterprises face great challenges and urgently need technology upgrades.

Industry experts pointed out that the competition between China's special-purpose vehicle companies and foreign countries is mainly based on cost differences. In the future, if this difference is reduced, it will be technical competition. Therefore, whether it is a complete vehicle or a parts and components company, technical preparations must be made.

Due to the late start of China's special vehicle parts industry, many companies have chosen to achieve the purpose of quickly entering domestic and international low-end markets through OEM or joint ventures, and then accumulate their own independent research and development capabilities. This is a shortcut. However, entering the high-end market from the low-end market will be a very difficult process, and it will be a severe test of the company's independent research and development capabilities. As one company manager said: “We have no absolute advantage in the domestic market. We are not proud. If we do not upgrade our technology and we do not develop our own R&D capabilities, we will be very sad in the future.”



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