What are the factors restricting the development of the auto parts industry?

Although the steady development of my country’s auto industry in recent years has laid the foundation for the development of the auto parts industry, and from the perspective of the development prospects of the auto industry, it is expected to maintain a stable growth trend in the next few years, which will provide a solid foundation for my country’s auto parts manufacturers. The parts industry provides a broad space, but the future development of the industry is still constrained by unfavorable factors such as low industry concentration, immature core technologies of key parts and components of china enterprises, and weak industry research and development capabilities, mainly manifested in the following three weak links:

Industry concentration is low

At present, there are tens of thousands of auto parts companies in China all over the country, but most of them are small in scale, and the concentration of the entire industry is low. The large number of enterprises and the low degree of concentration result in scattered and repeated investment, and it is difficult to reflect the overall advantages of the industry. Many small-scale enterprises cannot guarantee the quality of their products, and their relatively backward production processes and equipment can easily lead to waste of energy and resources. In addition, the low level of competition caused by the low degree of industry concentration is also not conducive to the development of the industry.

The core technology of key components of china enterprises is immature

Most of the core technologies of key components are owned by large foreign auto parts companies, and china production generally adopts joint ventures. Therefore, china parts companies are not completely independent in the technological innovation of key parts and components, which affects the innovation and development of key parts and auxiliary parts to a certain extent, and restricts the improvement of the technical level of parts and components enterprises.

Industry research and development capabilities are weak

Compared with the R&D investment of foreign companies, the overall R&D investment of china component companies is relatively small. The R&D investment of some enterprises is low, there is a shortage of high-quality talents, the R&D capability is weak, and there are not many production enterprises with continuous innovation capability in the industry, which is not conducive to the long-term development of the industry.