1. Technical level and characteristics of the industry

China's auto parts industry started late, compared with developed countries, the development is lagging behind, the industry's parts suppliers are generally small scale, for technology research and development investment is insufficient, the overall technical strength is weak, small and medium-sized parts suppliers are generally low technology content.

Compared with China, auto parts enterprises in developed countries have larger scale, higher degree of specialization, strong advantages in capital, technology and other aspects, and are ahead of most domestic enterprises in technology. Therefore, there is a certain gap between domestic auto parts industry enterprises and foreign mature enterprises in technology.

With the development of Chinese automobile industry and the growth of supporting parts industry, the technical level and research and development ability of Chinese automobile parts industry has been greatly improved. There have been a number of independent development and design of large scale parts enterprises and small and medium-sized parts enterprises with strong technical research and development ability in the segmentation field. Through the strengthening of synchronous development, mold design and development, technological process, large-scale production and other capabilities, some auto parts enterprises have entered the supply chain system of the world's famous auto manufacturers.

2. Industry technical threshold and technical barrier

Automobile manufacturers have high requirements on the technical content, reliability and precision of parts, and pay attention to the technical strength, product quality, manufacturing ability and other aspects of the selection of suppliers. The auto parts industry involves knowledge and technology of material science, product design, mold design and development, product verification, process, product testing, etc., and it needs to go through a number of interconnected links to realize the product production process. It is necessary to have the support of professional and technical personnel team in design, process, mold and equipment in order to manufacture the quality of products to meet customer standards, so it has a high technical threshold.

In recent years, electrification, networking and intellectualization have become the future trend of the automobile industry. Automobile manufacturing enterprises have widely adopted new technologies, new materials and new processes. In order to ensure that the parts can be launched and upgraded synchronously with the vehicle, the supporting auto parts products must also carry out corresponding technological updates and product upgrades. This requires automobile parts manufacturing enterprises to have strong ability of technology development and process optimization. Therefore, only those enterprises with strong technical ability have the ability to respond quickly according to the new needs and requirements of automobile manufacturers, to complete product optimization design, mold development and process development, to provide customers with competitive products in product performance, product reliability, cost and other aspects.

3. Key indicators to measure core competitiveness

The quality, technical level and cost of auto parts are the key factors of competitive strength.

The quality and performance of automobile products have an important impact on the safety and experience of driving. According to the international practice and China's Defective Automobile Product Recall Management Regulations, automobile manufacturers must undertake the obligation to recall defective automobile products produced by them. Therefore, they will set strict screening conditions on the quality of suppliers' products and set high requirements on the quality of their supporting parts and components. If there is a problem with the quality of the parts, the car manufacturer can retroactively demand compensation from the auto parts manufacturer. Therefore, the products provided by parts suppliers need to meet the performance and quality requirements of customers in order to obtain customer orders and maintain a good market image.

The process from design to manufacturing of auto parts involves product synchronous optimization development, mold development, product verification, production and manufacturing links, each link needs to obtain technical support, in order to make a rapid response to customer needs, ensure product quality and scale supply, therefore, the need for parts enterprises to have a higher level of technology and profound technology accumulation.

The price of auto parts is closely related to the sales price of supporting models. In general, the price of a whole vehicle tends to decline as the sales volume of a new model increases and competing models are upgraded. Auto manufacturers are at the top of the auto industry chain and have strong bargaining power with auto parts suppliers, so they will transmit the price reduction to upstream parts suppliers, leading to the price decline of their supporting auto parts. Compared with automobile manufacturers, parts enterprises have a large number of small scale and weak bargaining power. Therefore, in order to obtain customer orders and ensure their own profitability, parts suppliers need to have strong cost control ability and win customers at competitive prices on the premise of ensuring product quality.

4. Characteristics of industry operation

(1) Unique business model

With the evolution and development of the market, the automotive parts industry has formed a pyramid multi-tier supplier architecture, and suppliers are divided into first-tier suppliers, second-tier suppliers, third-tier suppliers and other levels. Tier 1 suppliers with assembly production capabilities directly supply parts to automotive manufacturers; Secondary and tertiary suppliers supply supporting parts to automobile manufacturers through primary and secondary suppliers. Suppliers need to pass rigorous evaluation before entering the supply chain system and be identified as candidate suppliers by the automobile manufacturer. As members of the supplier system, the parts supplier needs to compete for orders based on the product demand of the automobile manufacturer and the parts supplier of the upper level.

(2) periodicity

There is a close linkage relationship between auto parts industry and vehicle manufacturing industry. Automobile production and sales are greatly affected by the macro economy, with the global and domestic economic cyclical fluctuations and cyclical changes. Therefore, the auto parts industry is affected by the downstream vehicle industry and macroeconomic cycle fluctuations and has a certain periodicity.

(3) regional

The development of automobile industry shows the trend of centralization. China's auto production is mainly distributed in the northeast, Yangtze River Delta, Pearl River Delta, Bohai Rim, central and Southwest regions. In order to reduce transportation cost, shorten supply cycle and improve collaborative production capacity, Chinese auto parts industry mainly focuses on distribution of automobile industry clusters, and chooses to set up production bases in the adjacent regions of automobile manufacturers. It has formed the regional distribution characteristics of the industry with the northeast, Yangtze River Delta, Pearl River Delta, Bohai Rim, central and Southwest auto industry bases as the radiation center.

(4) Seasonality

The auto parts industry is in line with the seasonal production and sales of the complete vehicle industry. Automakers usually increase production plans in the fourth quarter of each year to cope with the impact of the Lunar New Year holiday, so production demand is relatively strong in the fourth quarter.