The passion of multinational auto parts companies investing in China remains the same

The global financial crisis that broke out in 2008 caused the international auto industry to suffer heavy losses. Many overseas auto parts and components were forced to cut production and lay off employees. Although, since the second half of last year, China’s auto industry has not been able to do its own thing, showing weakness in production and sales. Even so, the multinational auto parts companies that are looking forward to "the West is not bright, Dongliangliang" still regard China as its "life-saving straw" to turn things around, and still enthusiastically continue to build technology centers and production plants in China against the city.

Take root in China

According to incomplete statistics, in 2008, nearly ten internationally-renowned auto parts companies started construction in Asia Pacific or China's technology center and regional headquarters in China, and witnessed their long-term development strategy rooted in China through generous investments.

On January 16, last year, the Continental Group's Asia headquarters in Shanghai Yangpu District and the China R&D Center formally laid the foundation. The total investment of its R&D center will reach 60 million Euros. During the Beijing International Auto Show in April, the Arvin Meritor Light Vehicle Systems Business Unit announced plans for a new technology center and Asia Pacific headquarters in Shanghai Waigaoqiao. On May 15th, the Bosch Group started a new headquarters building with office, R&D and training in Shanghai Hongqiao Airport Economic Park with a total investment of 120 million euros.

On October 23 of the same year, BorgWarner Inc. held a groundbreaking ceremony for the China Technology Center in Minhang, Shanghai. It is reported that the technology center will be the world's largest technology center for BorgWarner. On November 7, Eaton announced that it will purchase a building with a total area of ​​approximately 10,000 square meters in Shanghai as its new Asia Pacific headquarters. On November 13, the main project of the Shanghai R&D center of Fiat Power Technology (FPT) was officially completed. The technology center began construction in December 2007 with a total investment of 22 million Euros. It is FPT’s first R&D center in Asia. In addition to providing technical services such as product development for the Chinese market, the technology center also has a foundational basis. And prospective research capabilities.

Years ago, when the reporter visited the Arvin Meritor Light Vehicle System Technology Center on the spot, he discovered that the company, which is waiting for the overall sale of the global business, is still adding experimental equipment as planned. Frank Pierce, the company's vice president of Asia Pacific, believes that China is the leader in economic growth in Asia and the fastest-growing market for ArvinMeritor. It is undoubtedly the focus of ArvinMeritor's investment plan. ArvinMeritor’s attitude of “investing in China is equal to investing in the future” may be one of the important driving forces for many multinational component companies to take root in China.

January 2008 Groundbreaking of Continental Group Asia Headquarters and China R&D Center Office Building

Joint venture to build a new trend

During the past 30 years of reform and opening up, especially in the recent ten years, world-renowned auto parts suppliers such as Bosch, Delphi, Continental, Visteon, Denso, Mahles and Schaeffler have already established sound production facilities in China. In 2008, during the "Autumn's Fall", more than 20 multinational auto parts companies such as Horse Brand Tire, Kumho Tire, Federal-Mogul, ArvinMeritor, Mann Hummel, and SKF announced the foundation of a new plant or the completion of a factory in China. Unlike the foreign investment preference in China for foreign companies in the previous two years, in 2008 it was uncharacteristically producing multiple joint ventures.

On March 26, 2008, Beijing Futian Cummins Engine Co., Ltd., which was established by Cummins and Beiqi Foton Motor Co., Ltd., was a grand opening ceremony. With a total investment of over 2.7 billion yuan, the joint venture will produce Cummins' latest generation 2.8-liter and 3.8-liter inline four-cylinder high-pressure direct injection light-duty diesel engines. On October 23, the United States WABCO Automotive Control Systems announced the formation of a joint venture with Guangdong Fuhua Construction Machinery Manufacturing Co., Ltd. in China to produce pneumatic disc brakes. It is reported that Fuhua is the world’s largest manufacturer of semi-trailer axles and holds 30% of the shares in the joint venture company. On November 24th, Johnson Controls and the auto parts company of Guangzhou Automobile Industry Group Co., Ltd. signed a joint venture company agreement. Its new plant adjacent to GAC will produce dashboards, sub-dashboards and other automotive interior products. On December 11th, American Axle Manufacturing Company announced that the company reached an agreement on the formation of a joint venture through its subsidiary company and Hefei Axle Co., Ltd., a subsidiary of Anhui Jianghuai Automobile Group Co., Ltd.

Looking at the joint venture construction project in the past year, the most important and far-reaching significance was BorgWarner. On November 25th, a joint venture funded by BorgWarner and China’s China Development Alliance was formally signed in Beijing. The joint venture has a total investment of 200 million U.S. dollars, of which BorgWarner holds 66% of the shares, and plans to build a factory in Dalian to produce the core components of the dual clutch automatic transmission. According to the plan, by 2020, the Dalian plant will have a production capacity of 1.5 million pieces, accounting for 12 vehicle manufacturers (FAW, SAIC, Dongfeng, Chang'an, Chery, Jinbei, GAC, JAC, Geely, Changfeng, Zhongshun, and Great Wall). The required automatic transmission 8 into the market share.

In the 1990s or earlier, based on the mentality of “holding the stones better than the river”, multinational auto parts companies that do not understand the domestic auto market often landed on the domestic market in the form of joint ventures. After entering this century, due to no policy constraints, more and more foreign companies tend to set up factories solely in China in order to maximize their profits and prevent technological outflows. Then, why did 2008 see a number of joint ventures after 2007? Is it the "retrospection" of foreign investment in China's manufacturing strategy? Experts have warned that it is a joint venture with the original market to ensure joint venture vehicles. For different purposes, this round of foreign investment chooses most of the joint ventures to be self-owned branded vehicles or affiliated companies, indicating that the multinational component companies have begun to shift their strategic focus to the supporting markets for self-owned brand vehicles while consolidating the supporting market for joint-brand vehicles. To some extent, it reflects that the layout of foreign capital in the domestic market is shifting from "local warfare" to "all-out war." Even the commercial vehicle matching market, which was originally dominated by independent brands, is also in danger of being eaten in large quantities by multinational component companies.

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WABCO's "Safety Man" has further consolidated its leading position in China through the establishment of a joint venture

Acquisition of domestic enterprises to seize beach sales

Although mergers and reorganizations have always been one of the common methods and effective ways for international companies to rapidly expand the scale of their business operations, multinational auto parts companies rarely use this “conventional weapon” in their efforts to expand their markets in China. Local companies acquired by multinational corporations are also very few. While continuing the tradition in 2008, it has produced new highlights. Among the few acquisitions, three of the acquired local companies are related to the automobile after-sales business, which indicates that the international spare parts companies are accelerating their efforts to seize the post-car market in China.

On March 11th, Bosch Group signed an acquisition agreement with Shenzhen Weiningda Industrial Co., Ltd., and registered Bosch Automotive Testing Equipment (Shenzhen) Co., Ltd. in Shenzhen in June. The relevant person in charge of Bosch Group stated that the acquisition of Weining Da "Kinde Instrument" has greatly enhanced Bosch's testing equipment's R&D and production capabilities in China, and in particular has accelerated the pace of software R&D, which will further expand Bosch's testing equipment in China's auto aftermarket. Business share.

On September 1, SPX announced that its automotive service solutions business unit has completed the acquisition of Shenzhen Chebos Electronic Technology Co., Ltd. Wei Jiansen, president of Spike Automotive Service Solutions Asia Pacific, said that Chebos is a manufacturer of automotive diagnostic tools and equipment that are influential in China. The Chebos series products not only enriched the SPX product line, but also helped broaden the scope. The company’s sales channel coverage in the aftermarket in China. On September 29th, the United States PPG Industry Group formally signed an agreement with Panyu District Bonnie Paint Co., Ltd., a leading manufacturer of automotive refinish coatings in China, to wholly acquire its automotive paint business to expand its mid-range automotive refinish in China. Product and brand portfolio.

According to industry experts, by the end of September 2008, the number of motor vehicles in China had reached 168 million, of which about 40 million were private cars. The economic scale and development potential of the automobile aftermarket are huge. At the same time, China's auto aftermarket also has the characteristics of large number of participating companies, low overall quality of employees, lack of branded companies, and unregulated market competition, which is not conducive to transnational auto parts companies directly transplanting their overseas mature experiences. Therefore, for multinational companies, it is a wise move to acquire sales channels, mature talents, and mid-range brands through the acquisition of local companies, and then be able to share the aftermarket in a “quiet and quick” manner. It can be predicted that similar acquisitions have aggravated development trend.

American PPG enriches its product and brand portfolio for the Chinese market by acquiring local brands

In 2008, when the multinational auto parts companies “scraped” in the local market, they still overcame all difficulties to squeeze out funds to build a “Land Hall Pavilion” in China, and the main battlefield for their investment was also from the matching market. Expanded to the aftermarket. It can be seen through the enthusiasm and investment of multinational auto parts enterprises in China: On the one hand, the growth potential of the Chinese auto market is still widely recognized by the countries around the world; on the other hand, the operating environment of auto parts auto parts companies is constantly deteriorating. Need to cause the relevant management departments to pay attention.

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