Self-owned brand cars should also shoulder the historical responsibility for the rejuvenation of parts and components
Not long ago, the Ministry of Industry and Information Technology held a symposium on Geely Automobile's development experience. During the event, Geely Group shared its strategy of acquiring partial equity in key component suppliers through capital investment, aiming to strengthen control over the supply chain. In addition, the company has partnered with banks to improve financial services, ensuring timely payments to suppliers and enhancing collaboration with both upstream and downstream partners. As far as I understand, Chery Automobile has also recently reduced the number of suppliers, increasing procurement concentration.
This trend signals an important shift: as major Chinese automotive brands like Chery and Geely grow in scale, they are beginning to prioritize long-term strategic partnerships with parts suppliers. This is a positive development. Ultimately, China’s auto parts industry still needs to rely on domestic brands to drive the entire vehicle industry. In other words, self-owned brand automakers must take on the historical responsibility of revitalizing China’s auto parts sector.
As we know, foreign-invested auto parts suppliers in China are mostly wholly owned or joint ventures. They have built stable, trust-based relationships with their partners through long-term cooperation in areas such as technology, management, business models, and culture. China’s passenger car parts industry started late, with weak technological and manufacturing foundations, making it difficult for local companies to enter the supply chains of major automakers. In the passenger car segment, Chinese parts companies have gradually been pushed to the sidelines, especially in high-tech areas like electronic components, which are dominated by foreign brands.
Auto parts themselves are not final products; they need to be installed in vehicles to deliver their value. Therefore, the development of auto parts cannot be separated from the整车 (whole vehicle) industry. In the past, Chinese self-owned brands mainly relied on imitation, lacking independent R&D capabilities. They used spare parts from other vehicles without specific or personalized technical requirements. At that time, Chinese parts companies lacked the ability to develop products and could not meet the technical demands of the vehicles.
Experience abroad shows that vehicle R&D must be synchronized with parts development to ensure that components are tailored for specific models. If the vehicle and parts are developed separately, the parts will only serve as generic “door-to-door†solutions, and their quality will gradually improve through continuous interaction. Therefore, when we criticize Chinese parts companies for lacking R&D capabilities, we should also consider the R&D capabilities of the vehicle manufacturers themselves.
Luckily, China’s auto market has experienced nearly a decade of rapid growth. Brands like Chery and Geely have gone through more than 10 years of hard work, achieving considerable production and sales scale, along with certain product development capabilities. These developments provide the foundation for driving the growth of China’s auto parts industry.
According to reports, Geely Group has established a product R&D strategy focused on independent innovation, extensive cooperation, and mastering core technologies. The company set a target of producing 2 million vehicles by 2015, with 5 product platforms and 42 models planned. Currently, it produces 5 models, prepares for 11, and has 26 technical R&D reserves, including various engines and transmissions. We are encouraged by Geely’s ambitious goals and confident in the bright future of China’s auto parts industry.
Amid the ongoing global financial crisis, it is crucial to implement the "Auto Industry Adjustment and Revitalization Plan" issued by the state. While maintaining growth and expanding domestic demand, we must focus on structural adjustment to elevate China’s auto industry to a higher and more reasonable level. Supporting the independent innovation and healthy development of domestic brands and key components is a vital part of this effort. Auto companies with self-owned brands should seize this opportunity to restructure their relationships with parts suppliers and build a complete, harmonious supporting system.
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