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After China's accession to the WTO, the development of the parts and components industry encountered new opportunities and challenges. The development of China's parts and components industry once caused widespread discussion among the industry. Recent developments in the US component industry are worthy of China’s reference.
Parts chain boom
Although mergers and reorganizations in the US auto parts sales industry have continued without interruption, the number of US auto parts sales chain stores has continued to grow.
Now, on both sides of the main city streets in the United States, large and small auto parts sales shops “five steps, one step, and one whistle†can see each other, just like fast food shops.
In 1991, there were a total of 3,643 chain stores among the top 10 auto parts suppliers in the United States. Today, there are 8,356 chain stores owned by the top five auto parts companies in the United States. The competition in the spare parts sales market has become increasingly fierce. One price cut will be immediately followed by the neighbors. However, for consumers, this is a convenient and affordable thing.
In recent years, there has been a continuous increase in the “big fish eating small fish†in the US auto parts industry. Although large companies are getting bigger and bigger, the prices of their products have not fallen proportionately because there is less for the parts and components industry. Affected by economic fluctuations, because this expenditure is essential to consumers. "If you want a new launcher, then you have to buy a new launcher." One vendor said.
Although the mergers and reorganizations of the spare parts sales industry have continued, the entire industry is still scattered. The business volume of the five largest US parts and components distributors accounted for only 30% of the total business volume.
In the United States, in addition to the national chain stores, there are regional chain stores. Such as AutoZone, RepBoys and so on. In addition, it also includes car dealers and individual independent sellers, even Wal-Mart and others are engaged in parts sales.
For some small-scale component suppliers, the reason why they can survive in the cracks is because these small distributors generally sell small-volume products, and these products do not want to be operated by large-scale chain sellers.
The largest auto parts sales chain in the US, AutoZone, currently has 3,219 chain stores, compared with 57 in 1991. In 2002, AutoZone’s sales reached US$5.3 billion. In the second place is AdvanceDiscount, which has 2,500 chain stores and posted sales of US$3.3 billion in 2002.
Counterfeit parts give automakers headaches
According to statistics, the annual direct economic losses caused by counterfeit parts and components to the US automobile industry amount to 12 billion U.S. dollars. In addition, counterfeit parts can also cause injuries to the occupants, and these losses cannot be measured in terms of money.
At a seminar recently initiated by the American Association of Motor Vehicle and Equipment Manufacturers, participants agreed that the increasingly rampant problem of counterfeit auto parts is one of the major headaches for auto makers in the United States and abroad.
The person in charge of the General Parts and Service Department stated that counterfeiting of auto parts is the direct cause of the rise in the unemployed in the auto industry and the casualties of drivers and passengers.
According to statistics, since 1995, due to counterfeit auto parts caused by the decline of automakers' income, the entire auto industry has caused at least 210000 job losses.
In most cases, counterfeit parts are very similar in appearance to the original parts, but the quality is very poor. It is difficult for the average consumer to distinguish. A participant took out a counterfeit dry powder fire extinguisher. This fire extinguisher was identical in appearance to a normal fire extinguisher. However, the fire extinguisher contained flour. This counterfeit fire extinguisher will not only fail to extinguish the fire but will also contribute to the fire. Other counterfeit products include: brake pads made of crushed glass, sawdust or cardboard; counterfeit brake fluids after dyeing with cheap ordinary oil; counterfeit fuel tank caps that can easily leak after overturning; filled with rags Fake oil filters, etc.
According to statistics, most counterfeit auto parts come from the Asia-Pacific region, of which China is the main counterfeit parts production area, followed by Hong Kong and Taiwan.
According to reports, a Nigerian was unable to brake because the car's brake pad was a counterfeit product, causing a roll-over and all seven of the family were killed. This is one of the thousands of traffic accidents caused by fake auto parts.
Sometimes even the entire car may be a duplicate.
GM is one of the biggest victims of counterfeit auto parts. Other companies also suffered different degrees of damage. It is reported that a famous American spark plug company suffers direct economic losses of between 2,000 and 50 million US dollars each year due to counterfeiting.
In most cases, counterfeit products can mimic the original part's trademark, packaging, and appearance. The labels or descriptions of these products even contain a lot of grammatical errors, which are 40% to 50% lower than the original parts. The price of some counterfeit accessories is even higher than the original parts.
Some brazen counterfeit auto parts makers even take their own product rights as their own. These counterfeit manufacturers even require cooperation with the original parts.
Counterfeit auto parts will not only affect the company's economic efficiency, but also damage the manufacturer's product reputation. One intellectual property expert at the conference said that once the consumer has been on the list, he will be skeptical about the brand in the future. Even if the manufacturer spends much money, it is difficult to change this view. The expert warned that car manufacturers and parts manufacturers must register their trademarks in all countries of sale.
There are legal loopholes in the United States that make cars and related industries particularly vulnerable to illegal infringement. Because only the trademark in use in the United States is protected, if the manufacturer is no longer registered after a few years of use, the trademark is no longer protected, so counterfeiters can use it.
In 1996, the United States introduced a related consumer law. Counterfeit products can be destroyed on the spot at customs, and counterfeiters can be prosecuted and even punished by fraud.
In 2002, US Customs seized $98 million worth of counterfeit products. The U.S. Federal Court sanctioned 1,000 suspects suspected of producing counterfeit products.
Experts pointed out that the most sensible approach for auto and parts manufacturers is self-protection. Attention should be paid to protecting their trademark rights, and product design and packaging are often changed.
Small parts manufacturers face difficulties
According to American auto industry experts, due to the current sluggish US auto market and the reduction of production by manufacturers, the unstable US parts industry has been made worse, and some small-scale suppliers are likely to close down or be merged.
It is reported that in recent years, many small-scale component suppliers have shouldered heavy debts, and their profits have become increasingly difficult, but they have been struggling. However, thanks to the relatively high level of sales in the US auto market in recent years, such as: In 2000, it sold 17.4 million vehicles, ranking the first in history; in 2001 it sold 17.2 million vehicles, ranking the second in history; in 2002 it was 16.8 million, ranking fourth in history. These small suppliers can still rely on quantity to maintain their livelihoods.
However, due to the impact of the war crisis, rising oil prices and economic instability, the US auto market continued to be sluggish, causing manufacturers to increase their inventories. For this reason, GM and Ford's production in the second quarter was cut by 10% and 17%, respectively. Therefore, in the following days, small-scale suppliers will face trials.
David Hellley, an automotive industry analyst, said: "Only those most powerful suppliers can survive. Therefore, there will be a series of mergers and reorganizations."
Auto parts suppliers provide a wide range of components, from chassis, interior to steering, brakes and electrical systems, accounting for about 70% of the cost of the vehicle. Small-scale suppliers have annual sales of between US$10 million and US$500 million, and their products are supplied to manufacturers or other larger suppliers. Most of these suppliers are family-based and employees range from 50 to 5,000.
These suppliers emerged in the 1990s. At that time, the auto industry was booming. Therefore, these suppliers either built new factories or merged with other smaller-scale suppliers, and were therefore burdened with heavy debts. At the time, manufacturers also supported and encouraged them to do so.
In the past 10 years, the number of parts suppliers has been greatly reduced. In 2000, it was 10,000, equivalent to one-third of 1990. According to experts from the United States Original Manufacturers Association, only about 4,000 to 5,000 people will survive by 2010.
Now that the auto industry is facing a downturn, and banks are beginning to clear their debts, these small suppliers will soon face closures or mergers.
Suppliers with annual sales of between US$10 million and US$100 million are the most vulnerable, especially those who are engaged in the production of metal stamping, plastic molds and electronic devices.
In contrast, those parts supply giants will benefit. Automakers have already hinted that they will work with fewer suppliers, and these suppliers will provide them with large parts modules, which will make the car production more specialized and at the same time be assembled faster to meet the individual needs of customers. Companies like Delphi, Johnson Holdings and the Lear Group have this strength and will benefit from it. For example, the dashboard now includes air-conditioning outlets, radios, and other electrical components. It was already an integral modular unit before assembly. In the past, these items were dispersed and assembled on the assembly line of the vehicle.
However, Delphi’s sales of component parts giants worth US$14 billion this year are also concerned because it is supported by numerous subsidiaries and Sun Tzu companies. In the unlikely event that the following small companies collapse, Delphi will face the base of the pyramid. Steady danger. Therefore, Delphi has taken measures for some important subsidiaries. To this end, the company has dispatched engineers and economists to these small companies for co-management to ensure that these companies continue to operate.