China's auto and parts market is an open market
In the past 30 years, China has always adhered to the basic national policy of opening to the outside world, and the auto industry's openness has been continuously improved. The following aspects can be seen in the degree of openness of China's auto parts market:
First, the "threshold" for the import of automobiles and parts has been greatly reduced. The overall tariff level in China has fallen from 43.5% in 1992 to 9% last year, and the actual tariff level is about 6%, which is close to the tariff level of developed countries. On July 1, last year, the auto tariffs on vehicles fell to 25% and the parts tariffs dropped to 10%. At the same time, since January 1, 2005, China has ended its 20-year quota system.
The second is to adjust relevant industrial policies that are incompatible with WTO rules. After China's accession to the WTO, the Chinese government revised its automobile industry policy and gradually phased out the restrictions on categories, types, or models of cars; gradually liberalized the authority of local governments to approve auto joint ventures; liberalized the equity limit of engine joint ventures and allowed foreign investment. Holding; Establish laws, regulations and standards that apply uniformly to domestic and imported automobiles and parts and components.
The third is the further opening of foreign-funded enterprises in service trade. Since 2005, China has liberalized trade rights for foreign investment. In addition, it gradually opened auto-assisted distribution services, allowing foreign non-bank financial institutions to engage in auto consumption services, allowing foreign insurance companies to operate statutory insurance businesses and gradually liberalize transportation services, maintenance services, and freight forwarding services.
Fourth, in the national automobile industry trade policy, foreign-funded enterprises enjoy national treatment. Among the first batch of 160 national auto and auto parts export base companies jointly recognized by the Ministry of Commerce and the National Development and Reform Commission, 61 foreign-funded enterprises account for 39% of the total.
China's auto and parts market is a fast-growing market
After more than 50 years of development, the Chinese automobile industry has basically established a relatively complete production system for the automotive industry. Now China has become the third largest automobile producer in the world, the second largest consumer market and the largest potential market.
Driven by the development of the automobile industry, in recent years, China's auto and parts trade has also developed rapidly. Specifically in:
-- The scale of vehicle exports continues to expand. Since the accession to the WTO, China's auto vehicle exports have increased by an average of 95.6% annually. Last year, the total vehicle export value reached US$3.12 billion, an increase of 97.3%.
- Exports mainly to auto parts. Last year, China’s auto parts exports totaled USD 12.12 billion, an increase of 36.3%, accounting for 76.5% of the total export value of auto products.
-- The export of finished vehicles is mainly commercial vehicles, and the export of cars has increased significantly. Last year, China exported 223,728 commercial vehicles, which accounted for 69.0% of total vehicle exports; and exported 92,495 cars, an increase of 197.2%.
——The export market has developed toward diversification. Last year, China's export market for automotive products reached 207, of which, the export of complete vehicles was dominated by developing countries and regions, and the export of auto parts was dominated by developed countries.
China's auto parts and components exports have grown at a relatively fast pace. During the first three years after the accession to the WTO (1999 to 2001), auto parts exports have grown at an average annual rate of 29.3%. From 2002 to 2006, the average annual growth rate of auto parts exports was as high as 39.0%. Last year, China’s auto parts exports stood at USD 12.12 billion, an increase of 36.3% year-on-year. Overall, China's auto parts exports mainly consist of labor-intensive products and low-value-added products; some labor-intensive products have occupied an important position in the world, and some companies have already entered the global procurement network of multinational corporations.
China's auto and parts market is a mutually beneficial and win-win market
Since the reform and opening up, China's auto product structure, manufacturing capability and management level have gradually been in line with international standards. The strength of China's auto industry is continuously increasing. At the same time, the rapidly developing Chinese auto and parts and components market provides domestic and foreign auto companies with an excellent competitive arena and substantial profit returns.
From the perspective of domestic market share, foreign companies and brands account for as much as 74% of the Chinese car market. In the field of spare parts, foreign-funded enterprises account for more than 60% of the parts and components of domestic major car joint ventures, and have become important suppliers of key assemblies and components for domestic commercial vehicle companies.
In terms of export ratios, last year, foreign-invested companies’ auto parts exports accounted for 58.8% of China’s total auto parts exports. In terms of vehicle exports, the Honda’s Guangzhou production base exported 24,000 cars last year, ranking first in the country.
From the perspective of economic efficiency, the profitability of major multinational automotive and component companies in China is far higher than that of the home country.
The rapidly growing Chinese auto market brings many opportunities and profits to multinational companies and is a win-win market. Therefore, in recent years, multinational corporations have increased their investment in China, and the investment field has also extended from production to R&D, sales, logistics, finance, upstream raw material production and other fields.
China's auto and parts market is a market with huge development potential
This can be seen from the following aspects:
First, the continuous growth of the automotive market provides good conditions for the development of the industry. With the rapid development of the national economy, the acceleration of urbanization and the continuous improvement of people’s living standards, the demand for the automotive market will continue to grow.
Second, the automotive industry has begun to focus on improving research and development and independent innovation capabilities. At present, domestic auto companies have gradually improved their independent R&D and technological innovation capabilities, and their manufacturing processes and management levels are gradually approaching the world's advanced level. The product development, system support, and module supply capabilities of parts and components companies continue to increase. The gap between the technological level of energy conservation, environmental protection, and safety and the world's advanced level is continuously narrowing.
Third, automotive products are one of the most potential export commodities in China. At present, automotive products account for 10% of the world's total trade volume, while China's auto product exports account for only 1.5% of China's total exports, accounting for 1% of the domestic total industry sales, and the lowest in the mechanical and electrical industry. There are structural differences between China's auto industry and foreign auto industry, which have obvious comparative advantages.
Fourth, there is a change in the main body of auto export operations and the development prospects are good. With the deepening of the reform of state-owned enterprises, the rise of private enterprises and the development of joint ventures, some auto parts and components companies initially possess international competitive advantages; the scale and strength of self-owned brand companies have increased, and attempts have been made to develop international operations.
Actively improve the policy environment and promote the development of auto parts industry
China has continuously intensified its work on the focused issues of intellectual property protection, energy saving and emission reduction, and has achieved remarkable results. It has optimized the market investment environment and has attracted foreign auto and parts and components companies to come to China for joint ventures and cooperation to achieve mutual benefit and win-win results. Played a positive role in promoting.
-- New measures for the protection of intellectual property rights. The Chinese government has always attached great importance to the protection of intellectual property rights and abide by international rules. The Chinese government has formulated the “2007 Action Plan for Intellectual Property Protection in China†from legislation, law enforcement, trials, mechanism building, publicity, training and education, international exchanges and cooperation, promotion of intellectual property protection for enterprises, provision of services for rights holders, special studies, etc. In 10 areas, 276 specific measures were issued to create a favorable investment and operating environment for Chinese and foreign companies, including auto and parts companies.
——Energy-saving and emission reduction efforts continue to increase. After the United Nations Conference on Environment and Development in 1992, the Chinese government took the lead in organizing the formulation of China’s 21st Century Agenda - China's White Paper on Population, Environment, and Development in the 21st Century. Based on its national conditions, it adopted a series of policy measures to actively respond to global environmental changes. At present, China’s energy consumption per 10,000 yuan of GDP has dropped from 2.68 tons of standard coal in 1990 to 1.43 tons of standard coal in 2005, an average annual reduction of 4.1%. Calculated on a ring-by-loop basis, during the 15 years between 1991 and 2005, China accumulated a total of about 800 million tons of standard coal. In December 2005, the State Council promulgated the "Decision on Implementing the Scientific Outlook on Development and Strengthening Environmental Protection," placing environmental protection, energy conservation and emission reduction at a more strategic position.
In the automotive field, the Chinese government has encouraged the development of energy-saving, environmental-friendly, and small-displacement vehicles. It has issued a large number of measures in terms of finance, taxation, government procurement, and standard setting, and has achieved remarkable results. For traditional energy vehicles, through the formulation and implementation of automobile fuel consumption standards and publicity systems, the strict emission standards for automobiles have been continuously enforced. On July 1 this year, it will take the lead in implementing the third phase emission standards in key cities and gradually promote them to the whole country. In the area of ​​new energy vehicles, the Group will actively develop research and industrialization of new types of power such as electric vehicles and vehicle power batteries, focus on the development of hybrid vehicle technology and diesel engine technology for cars, encourage auto manufacturers to develop new fuel vehicles, and formulate new energy sources. Automobile companies and product access methods. For the backward automotive products, the relevant departments are speeding up the revision and improvement of the scrapping standards and scrapping the poor state of automotive products.
China’s ever-growing market scale has injected new vitality into the world’s economic growth and brought tremendous business opportunities to companies around the world. The Chinese government has clearly stated that it is necessary to develop China's auto industry into a pillar industry of the national economy by 2010 and become the world's major automobile manufacturer. For a long period of time, China's auto industry will continue to maintain rapid growth, providing Chinese and foreign auto companies with huge business opportunities and cooperation space.