Parts logistics highlights the predicament of auto parts Gome


Zhejiang Wanfeng Auto Group sells 15 million turbines and friction wheels each year, but no one enters the aftermarket circulation market. They do not want to, but they are afraid.

The auto parts market can be divided into OEM (supporting) and aftermarket two markets. “Our group had entered the after-sales circulation market in the past few years and found out that the market was very chaotic and it came to an end.” On the morning of October 28, Xia Yueyu, vice president of Zhejiang Wanfeng Auto Group, said, “We are all doing now. OEM."

In order to chaos the market opportunities, Chen Wenkai, project manager of Yuanzhuo Management Consulting Co., Ltd. believes that if no accident occurred, similar “Gome” and “Suning” in the circulation of Chinese auto parts will appear within five years.

Auto Parts Business Logistics Pain

The pain of logistics of auto parts dealers is reflecting the problems of the auto parts circulation market.

An auto parts factory has been receiving orders from automakers via fax. Every two hours, the automaker faxes the required number of parts to the company. One day during the National Day this year, the fax did not arrive on schedule. The staff on duty are very anxious and reflect this situation to the company’s top management. After more than 1 hour of contact, it was learned that the automaker did not need spare parts at this time. “The vehicle manufacturer did not consider the convenience of the supplier. If the automaker sends faxes as usual, just write the number required as '0',” says Sun Xiaoming, associate professor at the Shanghai Jiao Tong University Modern Logistics Research Center. Explanation: "At present, auto parts dealers are in a passive and weak position in the auto parts logistics."

The failure of auto parts suppliers to get information from automakers in a timely manner has increased the communication troubles at the most. However, the pain in the hearts of the auto makers is that they are in control and dominant position in the auto parts logistics industry. Auto parts dealers not only lost the added value of the logistics business, but also made themselves more vulnerable.

As a result, vehicle manufacturers are keen to establish their own logistics subsidiaries. Earlier this year, Century Alliance received a business: integrated logistics for a small vehicle manufacturer. According to Jia Yunguang, senior advisor of Century Alliance Financial, the advice they gave was that the automaker set up a logistics subsidiary. Unexpectedly, the logistics subsidiary of this company has already been established when they go again. There are three reasons why the automaker is eager to establish its own logistics subsidiary: First, if the logistics business is handed over to a third-party logistics company, it will inevitably lead to the original part of the company facing the risk of unemployment, and the pressure for the company's reform is relatively great; The second is to control the logistics business, which can increase the revenue. Third, it is difficult to find a third-party parts logistics company that they trust.

Because of this, auto parts logistics is difficult to develop. The existing domestic domestic well-known automobile logistics companies and auto manufacturers have a stock relationship. The chief executive of Anji Tiandi Automobile Logistics Co., Ltd., which is the largest company in domestic vehicle logistics, frankly stated that the main business of the company derives from the shareholders of SAIC Group. It is difficult to obtain the logistics business of other manufacturers.

Due to the inextricable relationship between logistics companies and vehicle companies, it is difficult for China's current automobile logistics companies to develop. The entire vehicle company not only reduced the manufacturing profits of the component manufacturers, but also earned the added value of logistics. At the same time, as parts and components logistics still mainly serve individual automobile manufacturers, the vehicle's no-load rate is relatively high, resulting in waste of resources.

The pain of logistics of auto parts suppliers highlights this dilemma: In all aspects of auto parts manufacturers’ leading component manufacturers, there are relatively few independent parts manufacturers that enter the aftermarket with their own brands. The underdevelopment and chaos of the after-sales market further promote the "collaboration" between automakers and auto parts dealers and increase the difficulty of the post-sale market development.

Closed production of spare parts

The auto parts market is divided into two markets: OEM (supporting) and after-sales, and the after-market is divided into an independent market and a non-independent after-sales market controlled by a vehicle manufacturer. Due to the brand and quality control of OEMs, the OEM market and non-independent after-sales services are not a problem for the market. In recent years, the problem of counterfeiting that occurred in the independent aftermarket has been notorious.

The scale of China's auto parts market is 170 billion yuan, of which the after-sale market scale is more than 60 billion yuan, and it is expected that the growth rate will reach more than 10%.

There are about 100 domestic automakers, and each of them has its own relatively closed component supplier. At present, the self-preparation rate of parts and components for 14 major auto factories in China is as high as 70%, and the industrial supply chain is completed within each group. The production of parts and components is obviously closed.

Correspondingly, component manufacturers are generally not supplied to other automakers, presenting regional characteristics that are dependent on OEMs. Since the scale of domestic auto manufacturers is not very large, the direct result is that the auto parts manufacturers are small and scattered. In 2000, only 6 of more than 6,000 manufacturers had sales revenue of over 1 billion yuan. Because it is difficult to grow big, auto parts dealers cannot achieve economies of scale, and there is little room for natural price declines. As a result, low-cost fake and shoddy products have found the market space. It can be said that the closure of parts production indirectly leads to some disadvantages of the independent aftermarket.

Although there are currently more than 300,000 auto parts dealers in China, due to the relatively simple structure of circulation companies, the auto parts retail business is not well-developed, and circulation capital has not penetrated into the maintenance field. In the domestic auto maintenance business market, the non-independent system occupies a dominant position, which limits the development of the parts circulation market. On the one hand, it is the result of vehicle manufacturers controlling the distribution channels of auto parts; on the other hand, the quality image of independent system maintenance has not been taken seriously.

After China joins the World Trade Organization, foreign parts manufacturers will establish their own distribution network in China or invest in production in China. At the same time, in order to reduce costs, the automaker will gradually implement global procurement, and the original industrial structure will change.

Brand building can not be encouraged

Chen Wenkai, Project Manager of Yuan Zhuo Management Consultant Co., Ltd., said that NAPA, the world’s largest auto parts dealer, had entered China in previous years, but the operation failed and it withdrew from the Chinese market. "Many things can't be rushed for success, but it depends on the needs of the market."

The success of branding in the circulation field depends largely on the development of private cars in China. At this stage, the vehicles owned by China are mainly used by the company. The characteristics of the owners lead to a small DIY DIY (do-it-yourself) market. According to statistics, more than 85% of China's existing motor vehicles are company vehicles. They are not sensitive to maintenance prices, and there is no incentive for DIY repairs.

According to Chen Wenkai's analysis, individual owners are more sensitive to maintenance prices. However, because the Chinese do not know much about cars, their awareness, ability, and atmosphere of self-repair are not enough.

"China's auto factories are still very moist, so they do not have the will and necessity to separate out the parts and components companies. When the profitability of the vehicle is low and the cost needs to be reduced, the automaker may be willing to peel off the parts and components manufacturers. And in these parts manufacturers will be able to grow up some circulation brands."

Chen Wenkai said that China's auto industry is not the same as other countries. Although everyone is more optimistic about the spare parts circulation market, the risk is not small. The biggest risk is whether market demand can meet expectations.

What is certain is that the emergence of brands in the parts circulation sector will change the current state of the auto parts circulation market. Currently, well-known domestic companies including Lenovo and Deron are interested in this market. A well-known parts and components manufacturer in Zhejiang has begun to study and establish a distribution network. It is preparing to spend two years and invest 1 in the early stage. 100 million to 200 million yuan of funds to create their own circulation brand.


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