Automobiles are one of the most complex and sophisticated industrial products in human history.
From the engine, gearbox, axle body, to screws and nuts, the production of a car consists of thousands of different components. These tens of thousands of parts and components are finally aggregated into a complete car machine, and consumers pay for the value.
It can be said that the pros and cons of the auto industry represent the strength of a country’s industrial strength, and the auto parts industry is the most important part of it, occupying a huge proportion in the entire value chain.
With the continuous integration of electric vehicles and smart technology, the car has gradually transformed into a new smart terminal. Chips, sensors, AI artificial intelligence, cloud computing...High-precision technology is constantly being used to "arm" smart cars, and the connotation and extension of auto parts are rapidly expanding.
Although my country is already the world's largest country in the production and sales of new energy vehicles, it is regrettable that China's auto parts industry is even weaker than the entire vehicle.
Generally speaking, the output value of the auto parts industry in developed countries can often reach 1.7:1 compared with the whole vehicle, while it is only about 1:1 in my country. In other words, my country's automobile core parts and components are heavily dependent on imports, and it has long been the second-largest industrial product imported by my country, second only to integrated circuits.
However, the historical time for overtaking in corners has arrived. With the rapid rise of independent car companies and new energy vehicles, the auto parts industry chain is gradually flowing into China. The changes in the electrification and intelligence of automobiles have slowly opened a new historical drama.
The industrial structure originally controlled by Europe, America, and Japan is being reshaped in the new industrial environment. As one of the most important pillar industries of the global economy, the industrial value of auto parts is rapidly flowing to China.
01. Unequal industrial status
Most of the income of Chinese auto companies is used to purchase overseas-produced parts.
my country's auto parts and complete vehicle industries have long been in a state of unequal status. The ratio of my country's parts and complete vehicles is 1:1, while developed countries in Europe, America, and Japan can reach 1.7:1. Moreover, the proportion of Chinese self-owned brand vehicles using self-owned brand components is less than 50%.
In other words, most of the income of Chinese auto companies is used to purchase overseas-produced parts and components.
In the 2021 Global Top 100 Auto Parts Suppliers List released by Automotive News, there are a total of 9 Chinese companies on the list. If you include Weichai Power, Huayu Automobile, and Fu Yao Glass, a total of 12 enterprises were shortlisted. However, there is not a single Chinese company in the top ten, and Japan, the United States, and Germany occupy 64 of the top 100.
Bosch, ZF, Continental in Germany, Denso in Japan, Magna in Canada, Delphi in the United States, etc., these companies have long been at the top of the auto parts industry, and their every move is leading to the development of the global parts industry. direction.
my country is already the world's largest country in the production and sales of automobiles and new energy vehicles, but core components are still restricted by others. For example, the core technology of key components such as automobile electronic control still cannot be independent, and some key raw materials, components, and equipment of the upstream basic industries still rely on imports.
Chinese companies are still struggling to catch up with the five core components of automobiles-engine, chassis, body, gearbox, and electrical equipment. Engines used to rely heavily on Mitsubishi; Infineon and Bosch occupied market-leading positions in the field of electronic control; gearboxes were controlled by Aisin, ZF, etc.; Bosch, Delphi, and Denso monopolized almost all of China's EFI market share.
Therefore, whether it is scale or technology, my country's auto parts companies still have huge room for improvement. The explosion of new energy vehicles has provided a huge stage for the rise of Chinese companies.
02. Returned industrial chain
The strong and heavy-duty new energy vehicle market has provided a huge stage for the auto parts industry, and related manufacturing industries are accelerating their return to China.
Since 2009, China has surpassed the United States to become the world's largest automobile consumer market. In 2020, my country will still be the largest contributor to the global auto industry, with sales accounting for more than 32%, and the second-ranked United States accounting for about 19%.
In the booming field of new energy vehicles, my country's market position is more obvious, and it can be said that it is the absolute main force in the global new energy vehicle consumer market.
In 2020, the production and sales volume of new energy vehicles in my country will be 1.366 million and 1.367 million respectively, an increase of 7.5% and 10.9% year-on-year, accounting for 42.19% of the global sales of new energy vehicles.
Since the beginning of this year, my country's new energy automobile industry has soared and continued to exceed expectations. In the first ten months, the production and sales of new energy vehicles were 2.566 million and 2.542 million, a year-on-year increase of 1.8 times.
According to data from the China Association of Automobile Manufacturers, the sales of new energy passenger vehicles in October this year were 379,000, and its market penetration rate reached 18.2%. This figure is very close to the planned target of "20% of new energy vehicle sales in 2025".
The forecast of BYD’s head Wang Chuanfu is even more radical: the sales of new energy vehicles in the Chinese market this year are expected to exceed 3.3 million units, and by the end of next year, the penetration rate of new energy vehicles in China will exceed 35%.
The strong and heavy-duty new energy vehicle market has provided a huge stage for the auto parts industry, and related manufacturing industries are accelerating their return to China.
Behind this, new energy vehicle companies have played a huge impetus. Tesla's construction of factories and mass production in China has detonated the performance of related suppliers.
In July 2018, Tesla's China factory officially settled in Shanghai, and the first batch of domestic Model 3 will begin to be delivered in January 2020. It is reported that one of the requirements to settle in Shanghai is the localization of the entire industrial chain. The current localization rate of Tesla Model 3 parts is close to 90%.
Prior to this, the Model 3 suppliers produced in the United States were mainly foreign-funded. After the start of the Shanghai plant, Joyson Electronics, Huayu Automobile, Tuopu Group, Sanhua Intelligent Control, Xusheng Co., Ltd., and many other companies have entered the Model 3 supply chain, and their value has greatly increased.
Xusheng shares (SH: 603305) is a typical case. Tesla is its largest customer throughout the year. In 2020, Tesla's contribution is as high as 43%.
Binding Tesla, its performance has grown steadily, and its revenue has nearly tripled in five years. In the first three quarters of this year, its revenue increased by more than 80%, and its parent net profit increased by more than 43% year-on-year. In addition, Xusheng has also entered the supply chain of ZF and Polaris.
Although Tuopu Group, which provides lightweight solutions for automobiles, has just been involved in the Modle Y model recall, it has also explained its importance in the Tesla industry chain from another perspective. In addition, the lightweight chassis system of its pickup truck is also installed on RIVIAN's products, and the bicycle price exceeds 11,000 yuan.
With the advent of the era of smart electric vehicles, the industry chain of related new parts and components is growing rapidly.
Desay SV (SZ: 002920), which is the first in China to deploy the three major businesses of "Energy Cockpit + Intelligent Driving + Intelligent Vehicle Linkage", enjoys the explosive dividends of the era of smart cars. The company's customers are not only FAW-Volkswagen, Great Wall, Geely, Changan, etc. For traditional car companies, their L3 level autopilot technology has been installed in Xiaopeng Motors. The smart cockpit has been mass-produced on the ideal ONE model and has business cooperation with Weilai.
At the same time, Desay SV also has in-depth cooperation with Baidu, Nvidia, Huawei, and other chip and artificial intelligence companies to jointly promote the popularization of intelligent driving technology. It can be said that this company is one of the representatives of the rise of Chinese auto parts companies as electric vehicles enter the intelligent era.
At present, automotive smart chips are still firmly in the hands of European and American companies such as Qualcomm, Nvidia, Mobileye, and Xilinx. The joint operations of Desay SV, Huawei, Baidu, and autonomous vehicles are expected to achieve domestic substitution in the field of smart driving.
03. The industrial logic of value return
In the new era of car building, the "zero relationships" is being reshaped.
The strength of the auto parts industry in Europe, America, and Japan is based on its hundreds of years of industrial heritage, and even the core wealth pool of the entire industry. It is unrealistic to keep pace with each other in a short period of time, or even achieve a go-ahead.
Although independent car companies such as Great Wall, Chery, and Changan have been struggling to catch up, the gap is still very obvious in the core automotive technology fields such as engines and gearboxes.
The explosion of electric vehicles has provided a new track for overtaking. The reason is that there is a huge difference between the core components of traditional cars and electric cars.
The most obvious difference lies in the power system. The “three powers” of battery, motor, and electronic control form the “power center” of electric vehicles, replacing the fuel power system of traditional cars, and the value of the three is close to 70%.
Unlike fuel vehicle engines, China is in a leading position in the field of power batteries. In the first three quarters of this year, five of the TOP10 global power battery installed capacity companies came from China, accounting for half of the country.
Moreover, Chinese companies have accelerated the introduction of world-class automakers, CATL entered the supply chain of Volkswagen, Tesla, Toyota, etc.; Volkswagen joined Guoxuan High-tech; Yiwei Lithium Energy deployed a large amount of 4680 large cylindrical batteries and entered the Daimler supply chain.
The power battery industry chain is extremely large, and the upstream sector is dominated by Chinese companies. Among the four major materials, Enjie is the world's largest lithium battery wet-process diaphragm leader; Tinci Materials is the world's largest electrolyte manufacturer; Beterui is the world's largest supplier of lithium battery anode materials; Shanshan and BASF have strategic cooperation, The sword refers to the world's largest supplier of lithium battery cathode materials.
In the field of motors and electronic control, Chinese companies have long lacked competitiveness, and 90% of the field of electronic control relies on imports. For example, IGBT chips are the second largest component after batteries. At present, in addition to BYD's own IGBT, 90% of the domestic new energy vehicle market is owned by Infineon.
At present, domestic companies are still struggling to catch up. BYD Semiconductor and Star Semiconductor are ranked second and third in China, and Zhuzhou Times and Silan Micro are beginning to make efforts.
In terms of motors, Wolong Electric Drive and ZF established a joint venture drive motor company to enter the supply chain of mainstream European car companies such as Mercedes-Benz.
Secondly, in the new era of car building, the "zero relationships" is being reshaped. Different from the Tier1 and Tier2 models, in the new era of car manufacturing, automakers and parts companies have entered an era of Tier0.5 cooperation.
The relationship between Tesla, Weilai, Xiaopeng, Ideal, and other car companies and supply chain companies is flatter and faster. For example, Tesla’s certification cycle for parts and components only needs 6 months, while traditional OEMs need 18- 24 months. Quick response, more cost-effective, and large-scale system integration capabilities provide independent suppliers with opportunities to rise.
Finally, in the era of fuel vehicles, joint ventures occupy a strong position in the market. If parts manufacturers want to become suppliers of joint venture brands, they need to consider the voice of the joint venture parties. However, in the era of electric vehicles, independent brands have obvious advantages and this problem obviously does not exist.
04, write at the end
The automobile industry has ushered in a historic change, and the replacement of fuel vehicles by new energy vehicles has been vigorous. Behind the prosperity of the vehicle market, the order of the parts industry is being simultaneously reshaped.
A person in charge of Dongfeng Nissan once said: "Without Chinese parts, no pure electric vehicle can be built", which shows the importance of China's industrial chain to the global new energy vehicle industry.
The soaring sales volume and the continuous exceeding-expected penetration rate have provided fertile soil for the rise of China's parts industry. The new features of intelligence and connectivity are even greater opportunities for my country's auto parts companies to overtake in corners. The return of wealth in the industrial chain is of great significance to China's economic growth.
