The automobile is one of the most complex and sophisticated industrial products in human history.

From the large engine, transmission and axle body to the smallest screw and nut, thousands of different parts go into the production of a car. These thousands of components are ultimately aggregated into the complete car, with the consumer paying for the value.

It can be said that the strength of the automotive industry represents the strength of a country's industrial strength, and the automotive parts industry is the most important component of this, occupying a huge proportion of the entire value chain.

With the continuous integration of electric vehicles and smart technologies, the car is beginning to gradually transform into a new intelligent terminal. Chips, sensors, AI artificial intelligence, cloud computing ...... high precision technologies are constantly used to "arm" intelligent cars, and the connotation and extension of auto parts are rapidly expanding.

Although China is already the world's largest producer and seller of new energy vehicles, it is regrettable that China's auto parts industry is even more disadvantaged than the whole vehicle.

Generally speaking, the output value of the auto parts industry in developed countries is often able to reach 1.7:1 compared with that of the whole vehicle, while China only has about 1:1. In other words, China's core automotive parts and components rely heavily on imports, and for years was the second largest industrial product imported into China, second only to integrated circuits.

However, the historical time to bend the road to overtake the car has come. With the rapid rise of independent car enterprises and new energy vehicles, the auto parts industry chain is gradually flowing into China. The change of electrification and intelligence of automobiles has opened a new curtain of historical drama.

The industry pattern 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 An unequal industrial position

A large proportion of the revenues of Chinese automotive companies are used to purchase components produced overseas.

China's auto parts and vehicle industry has long been in a state of unequal status, with the ratio of parts to vehicles in China at 1:1, compared to 1.7:1 in developed countries in Europe, the US and Japan, and the proportion of China's own branded vehicles using own branded parts is less than 50%.

In other words, a large proportion of the revenues of Chinese car companies are spent on purchasing parts and components produced overseas.

In the Automotive News list of the top 100 global auto parts suppliers for 2021, nine Chinese companies are on the list, and if you include Weichai Power, Huayu Auto and Fuyao Glass, which are not included in the list, a total of 12 companies are on the list. However, there is not a single Chinese company in the top ten, with Japan, the US and Germany occupying 64 of the top 100.

Germany's Bosch, ZF, Continental, Japan's Denso, Canada's Magna, the United States of Delphi, these companies have long been at the top of the auto parts industry, their every move leads the development direction of the global parts industry.

China is already the world's largest producer and seller of automobiles and new energy vehicles, but the core components are still subject to the control of others. Such as automotive electronic control and other key components of the core technology still can not achieve independent, part of the upstream basic industry key raw materials, components, equipment, etc. still rely on imports.

In the five core components of the car - the engine, chassis, body, transmission and electrical equipment, Chinese enterprises are still struggling to catch up. The engine was heavily dependent on Mitsubishi; in the field of electronic control, Infineon and Bosch dominate the market; the gearbox is controlled by Aisin and ZF; Bosch, Delphi and Denso have almost monopolised the market share of all Chinese EFIs.

So, whether it is the scale or the technical level, China's auto parts enterprises have huge room for improvement. And the explosion of new energy vehicles provides a huge stage for the rise of Chinese enterprises.

02 The returning industry chain

The strong release of the new energy vehicle market has provided a huge stage for the auto parts industry, and the related manufacturing industry is accelerating its return to China.

Since 2009, China has overtaken the U.S. as the world's largest automotive consumer market. in 2020, China remains the largest contributor to the global automotive industry, with a sales share of over 32%, while the second place U.S. accounts for about 19%.