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Challenges in the Development of Auto Parts
2025/06/14
The commercial vehicle parts industry is highly fragmented, with most companies being newly established individual enterprises. For these small and medium-sized enterprises, the initial capital investment pressure is already substantial, and post-production profits are low, making it relatively difficult for them to increase R&D investment. Moreover, the continuous rise in the price of auto parts raw materials over a certain period requires enterprises to allocate a significant portion of their funds to raw materials.
Marketing is limited due to the regional segmentation of commercial vehicle parts enterprises, which means they can only maintain customer relationships through a point-to-point model. Financial constraints also prevent parts enterprises from making substantial investments in technological R&D. Nationwide duplication of construction has plunged parts enterprises into the quagmire of price competition, resulting in serious capital waste. A whole cake is fragmented, making it difficult to achieve large-scale production, thus hindering profit levels and subsequent R&D investment.
However, despite the numerous challenges faced by commercial vehicle parts enterprises, a majority still survive, primarily due to the demand pull from vehicle manufacturers. Since they produce parts with relatively low technological content, the requirements for liquid assets in terms of labor and manufacturing costs are relatively low.
The choices made by vehicle manufacturers are also a significant reason for the difficulties faced by parts enterprises. Most domestic commercial vehicle manufacturers produce all types and models of products, which is detrimental to product segmentation, hindering the specialization of auto parts enterprises and their ability to focus on specific products. Most enterprises only focus on current production and neglect intellectual property protection. Some commercial vehicle parts enterprises, even if they possess technology and products, do not even understand the concept of protection.
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06-14
In 2010, China's auto parts industry made significant progress thanks to the rapid development of automakers. This highlighted the importance of collaborative development between auto parts and automaker enterprises, including simultaneous development, automaker support, and increased use of domestic auto parts. If automakers focus on purchasing foreign parts, it could lead to foreign control of key components and significant losses for domestic parts companies.
06-14
Challenges in the Development of Auto Parts
The commercial vehicle parts industry is highly fragmented, with most companies being newly established individual enterprises. For these small and medium-sized enterprises (SMEs), the initial capital investment is already substantial, and post-production profits are not high. Therefore, it is relatively difficult to encourage them to increase R&D investment. Moreover, the prices of auto parts raw materials have been rising steadily for a certain period, requiring enterprises to allocate a significant portion of their funds to raw materials.
06-14
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