The auto parts industry once stood as one of the six pillar industries in Luxi County, playing a vital role before the rise of the hydropower sector. It was the main source of tax revenue and led in the county's taxation list, making its economic and social contributions undeniable. However, with the restructuring of Dongfeng Company and the transformation of its organizational system, management model, and procurement methods, the auto parts industry in western Fujian has faced significant challenges. What is the current status of this industry? What factors are affecting its development? How can it grow and achieve coordinated development with taxation? To explore these questions, the author conducted an in-depth investigation.
**I. Current Status: Increasing Competitive Power**
Xie Youhua, Chairperson of Yanxi Qicheng Auto Parts Co., Ltd., shared that through fierce competition, companies in Luxi have improved their core competitiveness by adjusting product mixes, diversifying markets, and strengthening basic management to ensure survival and growth. The Daixi auto parts industry began in the 1980s with the construction of the Auto Parts Factory, relying on "Dongfeng" for over two decades. It gradually became a key industry in western Fujian and joined Dongfeng Commercial Vehicle Auto Parts. Key characteristics include:
- A "four-wheel drive" pattern, with four major companies forming the backbone of the industry.
- A stable scale effect, with consistent growth in production value and tax revenue.
- A diversified market, with products now sold across 23 provinces, including entry into FAW and Fukuda.
- Accelerated product structure adjustment, moving from commercial vehicle parts to high-tech passenger car components.
**II. Challenges: Shrinking Support from Dongfeng**
Despite its past success, the industry faces several issues. Product support for Dongfeng is weak, with low technological content and slow structural adjustments. Market saturation and rising costs have further strained the sector. Many companies are struggling to compete with those from Jiangsu and Zhejiang, while some have even considered relocating or switching production. The soft economic environment and cultural constraints also pose additional challenges.
**III. Opportunities: Clear Advantages Remain**
Despite these challenges, there are still clear advantages. The close relationship between Daixi and Dongfeng remains strong, with geographic and emotional ties that can be leveraged. The restructuring of Dongfeng’s commercial vehicle base presents new opportunities, especially with the expansion of bus and mini-vehicle production. This could bring new demand for interior and passenger car parts, offering a chance for the industry to adapt and grow.
**IV. Path Forward: Navigating Challenges to Achieve Growth**
To overcome these difficulties, the government must take action. Strategies such as focusing on industry clusters, building bridges between local and international companies, introducing foreign investment, and creating a favorable business environment are essential. The taxation department also plays a critical role, providing support through policy incentives, efficient law enforcement, and improved service. At the enterprise level, self-sufficiency is key—companies must invest in R&D, enhance product quality, and embrace market diversification to survive and thrive.
In conclusion, while the auto parts industry in western Fujian faces numerous challenges, its potential for growth remains strong. With strategic planning, government support, and corporate innovation, the industry can overcome its current struggles and emerge stronger.
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