Dong Jianping: Parts must seek profit in specialization and scale
In the current situation of fierce market competition and falling selling prices, trying to reduce procurement costs by all means is the goal pursued by all vehicle and component assembly companies. As we all know, expanding production is the most direct and most important means of reducing costs. Therefore, a more rational and specialized division of labor is required for the production of parts and components, and the increase of the production volume of each part is a matter worth paying attention to.
In the period of planned economy, the self-provisioning rate of parts of some large auto groups in China is relatively high, and many parts are produced by themselves, and they are called "big and full". Later, in order to increase the variety of products and increase the professionalization level and scale of production, these parts and components production units within these groups have become legal persons, operate independently, and are supporting the industry. Facts have proved that this is correct and worthy of recognition. However, at present, there are still parts factories affiliated with the auto group that are only supported by the Group, and the scale of production is always on the rise. Some companies even increase the rate of self-control of parts and components, and believe that it is possible to control costs and see it as a successful experience. . I think that it is feasible as a special case, but it cannot be promoted as a universally applicable law, because it is not in line with the law of automobile development and it is difficult to maintain in the highly competitive automobile industry.
For parts and components assembly companies with relatively long industrial chains, they will also encounter the problem of parts autonomy. Many companies have higher self-produced parts, and the reason is also to control costs or not to be restrained. Among them, many companies have abandoned the production of certain parts in order to save costs, and have purchased them outsourcing. This has led to an extension of the industry chain and the implementation of a more specialized division of labor. The advantage of doing so is to save investment, promote intensive production, and reduce production costs.
I visited some parts and components companies in Zhejiang and found that their greatest feature is specialized production. Although all of them are small enterprises, the products are also the second and third-level supporting parts. They are the most basic parts units, but they have large output, many varieties of specifications, a wide market coverage, and a market share that is among the highest in the industry. Some products have also entered the industry. international market. In addition, its product prices are also very competitive, and profit margins are also relatively large. People call it "small businesses, large markets." This fully reflects the advantages of specialization and intensive production.
China has a large number of first-level component suppliers, and there are dozens, hundreds, and hundreds of companies that produce similar parts and components. The competition is fierce and the profit space is getting smaller and smaller. Not only that, parts and components have to face pressure from the entire vehicle to reduce prices every year, so companies must find a profit growth point.
We need to adjust the value chain of the entire parts supply system, lengthen the industrial chain, implement a high degree of specialization, increase the output, reduce the cost, and increase the profit margin to the scale. In addition, each component and small industry should have relatively centralized secondary suppliers. Enterprises should not form their own supporting systems. Leading companies of the first-tier suppliers should jointly agree on 2 to 3 secondary supporting companies and support them to become leading companies in the secondary suppliers.
The problem of large number, small scale, decentralization and duplication of parts and components enterprises in China has not been solved for a long time, which has greatly affected the market competitiveness. The leading companies of parts and components should reach consensus on the specialization and intensive production of parts and components, unite them, adopt effective methods, reduce production costs, and strive for greater profit margins.
Field Fence,Metal Farm Gates,Metal Field Gates,Field Wire Fence
ANPING COWAN WIRE MESH & MACHINES CO., LTD , https://www.cowanfences.com