China's automotive electronics industry has reached the "most dangerous" moment

200 billion yuan market national brand is inseparable

The 47-year-old Wu Li is a full-time driver of a business unit in Changchun City, Jilin Province. He has more than 20 years of driving experience, and he is a professional driver for cars. In recent years, he has gradually felt powerless. The original general car fault, he can come to hand, but as the car more and more electronic appliances, wiring harness is getting longer and longer, in the face of some new failures, he also shook his head, can only be sent to a professional 4S shop repair processing .

From information and entertainment, navigation, audio, to engine control, and body control, automotive electronics is occupying the entire vehicle and automotive market at an unprecedented speed. In 2009, China’s automotive electronics market has exceeded 200 billion yuan, and it is expected to exceed 300 billion yuan in 2011. However, the current huge market has almost become the world of auto electronics giants such as Bosch, Delphi, and China. The poor status quo of the national brand of the automotive electronics industry has become an embarrassment that China's auto industry must shake off from a big turn.

Automotive electronics market is making rapid progress

What is automotive electronics? With the increasing technological content in the development of the automotive industry, the connotation of automotive electronics is constantly "expanding." In terms of performance, automotive electronics can be divided into control electronics characterized by mechatronics (such as engine control, body control, etc.) and vehicle body electronics (characteristics such as sound, navigation, and entertainment) characterized by human-vehicle environment interactions. And so on), as well as the automotive power electronics technology, automotive telematics technology, etc. that have recently developed with new energy vehicles and Telematics services.

“Automotive electronics is a huge potential industry, and the proportion of automotive electronic products in the total vehicle value has increased from 5% in the late 1980s to the current 25%, and it has exceeded 30% in mid- to high-end cars. According to the survey report, the proportion is still increasing, and it is expected that the value of electronic products in some high-end automobiles will soon reach 50%, and it may reach 60% in the future.” At the high-level forum of the 2010 China Automotive Electronics Industry Development Forum held recently Shenzhen Hongsheng Electronics Co., Ltd. Deputy General Manager Yang Hong said.

Yang Hong said that with the continuous increase in the proportion of automotive electronics in the vehicle, the market size of automotive electronics is increasing. In 2008, the scale of China's automotive electronics market reached 140.54 billion yuan, an increase of 15.6% year-on-year, and in 2009 it was over 200 billion yuan. The size of the automotive electronics market is expected to exceed 260 billion yuan this year, exceed 300 billion yuan in 2011, exceed 350 billion yuan in 2012, and the average annual growth rate will be about 19%.

Why is the automotive electronics industry developing so fast in our country? The sharply rising domestic auto market is the biggest stimulus. In 2009, China's auto production and sales have both exceeded 13.5 million. According to the trend of the market this year, the annual production and sales of more than 15 million vehicles will not be a problem. Such a huge consumer market for cars provides an extremely fertile ground for the development of automotive electronics. In recent years, the growth rate of the automotive electronics industry has clearly surpassed that of the automotive industry, and this trend is likely to continue.

On the other hand, looking at the current global automotive industry, intelligence and digitalization have become the development trend of the automotive industry. Safety, energy saving, comfort, and entertainment have become the main theme of future automobile development. This requires the continuous increase in the deployment rate of automotive electronics in the vehicle. . With the increasing maturity of automotive electronic products and technologies, product prices have begun to decline, consumer awareness has continued to rise, and the automotive electronics market has grown faster and faster.

In addition, from the perspective of national policy support, the introduction of policies such as the “Adjustment and Revitalization Plan for the Automotive Industry” and the “Restructuring and Revitalization Plan for the Electronic Information Industry” have all provided detailed provisions for the autonomy of key components such as automotive electronics. The Outline of the Eleventh Five-Year Plan, development points for the 11th Five-Year Development of the automobile industry, and adjustment and revitalization planning for the automobile industry clearly stated that we must vigorously develop the automotive electronics industry. The provinces and cities with good foundations such as Jilin and Wuhan are also placing automotive electronics in an important position in planning. These factors have created a favorable policy environment for the development of the automotive electronics industry.

The current situation of market imbalance

Located in the automobile industry zone in the southwestern part of Changchun City in Jilin Province, “Automobile City” has a park covering an area of ​​five square kilometers. In 2007, it was named “National (Changchun) Automotive Electronics Industry Park”. At the time of the awarding ceremony, Wang Xudong, Minister of Information Industry, said that Changchun is a city with great potential for the development of the automotive electronics industry. It has the talent base and technical advantages. The National Automobile Electronics Industrial Park is located in Changchun and will further promote the development of the industry. And technology upgrades.

The establishment of the Changchun Automotive Electronics Park is an example of current efforts to increase the development of automotive electronics throughout China. There are also many national automotive electronics industry bases in Wuhan East Lake, Wuxi New District and other places, but the results of large-scale development are not satisfactory .

Fu Yuwu, executive vice chairman and secretary-general of the China Automotive Engineering Society, said that in recent years, China's automotive electronics industry has enjoyed rapid growth, but the status quo of development is not optimistic. As multinational corporations have already formed a monopoly in controlling the production of automotive electronic products, the core technology of China’s auto electronics has fallen seriously. The gap between China’s auto electronics and the world’s advanced level is not shrinking, but is gradually increasing.

Taking the current share of China’s automotive electronics market as an example, in the year of 2009, the automotive electronics market was still firmly controlled by foreign-invested companies. In the year of the top ten automotive electronics market sales, there were only Shenzhen. Hangsheng is a local company, and the rest of the market is controlled by the world’s automotive electronics giants such as Continental, Bosch, Denso, Delphi, Visteon, Valeo and others. Even among the top ten Hangsheng Electronics Co., Ltd., the product types are mainly concentrated in the low-end automotive electronics products such as car audio and car entertainment systems.

The result is a more than 200 billion domestic automotive electronics market. The "Made in China" national brand is hard to share. Looking at the current Chinese automotive electronics market, the current state of imbalance between Chinese and foreign companies' markets is becoming more and more obvious, and foreign automotive electronics companies are gaining momentum in accelerating their deployment in China. Since the establishment of representative offices in China in the early 1990s, Delphi, the world’s automotive electronics giant, has invested hundreds of millions of dollars in China, including more than a dozen joint ventures and wholly-owned companies; and Japan’s Denso has also entered China in almost the same period. With several years of market expansion, a complete set of production supply, sales and after-sales service systems have been formed.

Xu Peng, general manager of automotive electronics division of CCID Consulting Co., Ltd., said that entry barriers for automotive electronics companies are high and require high performance and reliability, which places high demands on domestic companies. Taking automotive chips, one of the core technologies of automotive electronics, as an example, if a company does not have more than a decade of stable production experience, it will be difficult to establish a foothold in this market. At present, the vast majority of domestic automotive electronics companies are difficult to compete with foreign countries in this respect. In 2009, China’s imports of automotive chips increased by 23%, and the trade deficit exceeded RMB 2 billion.

Experts in the automotive industry have stated that the advancement of automotive technology and the upgrading of emission regulations are inseparable from the application of automotive electronics. China has begun to recognize the pivotal role of this sector, and many provinces and cities that have the basis and conditions for the development of automotive electronics have been introduced one after another. A series of promotion policies, but in the short term the embarrassing situation of the backward core technology of automotive electronics is difficult to change, and the huge domestic profit margin will continue to attract world-famous automotive electronics companies to come to gold.

It is imperative to accelerate the development of automotive electronics industry

For the Chinese automotive electronics industry, July 5 of this year is a memorable day, because on this day China Automotive Electronics Standards Work Committee was formally established. Industry experts said that its establishment will enable China's automotive electronics companies to have regulations to follow, and the end of the standard is not unified, this old problem, is conducive to regulating the domestic automotive electronics manufacturing companies, and promote the healthy development of the automotive electronics industry.

Fu Yuwu said that although there is a big gap between domestic automotive electronics companies and foreign countries, the road to catch up is long, and they are likely to face fierce competition, but even so they can not give up the pursuit. In the process of catching up with the world advanced level in the domestic automotive electronics industry, it requires not only strong support from the relevant national departments, but also a solid foundation for automotive electronics companies. They must work hard to develop a suitable path for their own sustainable development as soon as possible.

In the "2010 China Automotive Industry Development Report" co-edited by the China Automotive Engineering Society and the Department of Industrial Economics and Research of the Development Research Center of the State Council, the development trend of the automotive industry in China during the "Twelfth Five-Year Plan" period and China's automobiles were analyzed in detail. The status, existing problems and development prospects in the electronics industry. Experts have always believed that the autonomy of the automotive electronics industry is the key to industrial restructuring, and it is imperative to accelerate the development of the automotive electronics industry.

“In the next few years, China’s auto electronics market will continue to develop steadily during the adjustment. It is expected that the average compound growth rate of China’s automotive electronics IC market will be over 14.4% in the next three years. In addition to the rapid growth in the pre-installation market, the The modified market will also become an important driving force for the development of the market." Xu Peng said.

In the face of such a huge market and broad prospects for future development, many experts in the automotive electronics industry have stated with earnest respect that China’s auto electronics have reached the “most dangerous” moment, and if they do not make adjustments, they are allowed to continue to develop. If the core technology is still being held in the hands of foreigners, then the Chinese auto industry can only be empty talk. Moreover, the rapid development of emerging markets such as new energy vehicles will generate huge demand for automotive electronics. In the face of this golden opportunity, Chinese automotive electronics companies and relevant government departments must overcome the shortcomings of quick success and instant profit by restricting foreign capital acquisitions and anti-trust dumping. To build large-scale national automotive electronics enterprise groups and other ways to make up for the shortcomings of China's automotive electronics companies, making it an important pillar of the independent development of China's auto industry.

"Four Short Boards" Lead to the Failure of Domestic Automotive Electronics

Why is China's automotive electronics industry so "outdated"? After visiting many automotive electronics industry experts and related companies, the reporter found that there are currently four "short boards" that cause domestic automotive electronics to be controlled. These four shortcomings are the serious hollowing out of the core technology of automotive electronics, the incomplete organization of the automotive electronics industry, the shortage of professionals, and the lack of understanding of the development laws of the automotive electronics market.

"With the advancement of science and technology, the degree of automotive electronics is getting higher and higher, and a wide variety of electronic products have become the 'cerebral' of automobiles. However, electronic products with high added value and high technological content must be imported. Most domestic automotive electronics Manufacturers also remain stuck in the low-end automotive electronics industry, most manufacturers can only do entertainment systems, unable to engage in the production of core technologies such as engine electronic control.” At the 2010 China Automotive Electronics Industry Development Forum that ended not long ago, A car expert said so worriedly.

In the interview, the reporter learned that the vast majority of domestic automotive electronics companies are mostly engaged in the production of low-end automotive electrical products such as horns, audio, instrumentation, navigation lights, and mechanical components. Although in recent years, some companies have also begun to enter tire pressure tests and doors. Window control systems, automatic air conditioning systems and other fields, but compared with the engine electronic control technology, these are still non-core technology, it is difficult to impact on foreign automotive electronics companies.

Fu Yuwu, executive vice chairman and secretary-general of the China Automotive Engineering Society, said that most of the key electronic components such as engine management systems, body electronic stability systems, and central controllers in China's automotive electronics industry are currently produced exclusively by wholly foreign-owned or joint venture companies. The vast majority of timing gear systems, anti-lock braking systems and electric glass lifting systems are all produced by wholly foreign-owned or joint ventures. The problem of hollowing out of automotive electronic components in China is very serious.

Taking the automotive electronics core patent market as an example, according to the "China Automotive Electronics Patent Situation Report" completed by the Intellectual Property Department of the China Semiconductor Industry Association, etc., the current domestic anti-lock brake system, electronic brake force distribution system and electronics Patents on automotive electronics technology, such as stability programs, are almost always in the hands of foreign companies. From 2000 to 2008, the proportion of patents for automotive electronics such as power control, safety control, chassis control, and body control was more than 80%, and most of them were controlled by foreign companies. Not only that, but in the field of automotive entertainment where domestic auto electronics companies are gradually gaining ground, foreign companies are also stepping up patents.

Another factor constraining the current automotive electronics industry's difficulty in becoming bigger and stronger is the incompleteness of the organizational structure of the automotive electronics industry. For a long time, it lacks uniform standards and lacks an effective coordination and management organization, which directly leads to the phenomenon of domestic automotive electronics companies fighting each other. Serious, it is difficult to form a synergy. In July this year, the Ministry of Industry and Information Technology and other departments formally established the Automotive Electronics Standards Committee to try to bridge the gap in the lack of integration in the automotive electronics industry and promote this key industry to quickly gain competitiveness.

In an interview, an auto expert who asked not to be named told reporters that the domestic automotive electronics industry, including the other two short boards that are difficult to form industrial chains and lack of talent, is precisely a microcosm of the development of the Chinese auto industry. Due to the high technological content in the automotive electronics industry, the long research and development cycle and the high risk, most domestic companies that have just started to engage in the automotive electronics industry would rather choose short-term immediate benefits and rely on agency sales and assembly of foreign products to gain profits. With too much effort and capital invested in research and development, this "taking in" has laid a deadly danger for the long-term development of the domestic automotive electronics industry.

He said that it was precisely because of this short-sighted corporate behavior that led to the current embarrassing situation in which domestic auto electronics fell completely. Although one auto electronics company has earned enough money, the bulk of profits still flow into the pockets of foreign manufacturers. What's even more serious is that foreign auto giants are relying on their core technical advantages to consolidate their absolute superiority and become increasingly monopolized in the automotive electronics upstream industry, causing domestic auto electronics companies to hover over low-end fields. The competitiveness and selling point are the low prices, the unsustainable development model, and the narrower and narrower road of development.

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It is imperative to seize the high point of automotive electronics

China's automotive electronics industry is undergoing a tremendous transformation, facing the key choices at the crossroads. A smooth road can bring huge profits. It may be a deep abyss. Another road is full of thorns but it will The wider the walk. Although seizing the commanding heights of the core technology has become a common consensus in the industry, most of the automotive electronics companies in China still continue to drive their efforts to the first road.

It is undeniable that China's automotive electronics industry is currently ushering in a golden period of development. On the one hand, the rapidly increasing domestic car ownership provides a huge market base for automotive electronics companies. On the other hand, with the continuous improvement of technology, the assembly rate of automotive electronics in the vehicle is also increasing. The car of the future is called "a computer with wheels." Under the combined effect of these factors, the domestic automotive electronics market is full of vitality. The market size in 2010 is expected to reach 260 billion yuan.

However, we should clearly realize that the current domestic automotive electronics industry is facing embarrassment. Among the 200 billion large cakes, local auto electronics companies can allocate up to 1/10. Most of the market share has been firmly controlled by the mainland, Delphi, Bosch and other foreign auto giants. What is even more severe is that most domestic automotive electronics companies are engaged in audio and navigation products with low added value. The market share of the automotive electronics in large-scale integrated circuits and embedded operating systems is nearly 100%.

Some industry experts are sad to say that the lack of core automotive electronics technology has caused serious problems in the “hollowing” of the automotive industry in China. Not only do huge profits fall into the pockets of foreign manufacturers, but also the dominant power of future industrial development and the control of the domestic market will also Take orders from outsiders. If this trend does not change, then it will undoubtedly be a fatal blow to the Chinese auto industry, which has grown stronger and stronger. Therefore, it is imperative to seize the high ground of automotive electronics, the auto industry.

As we all know, automotive electronics incorporates modern automotive technology and electronic information technology. From the writing of software to the application to the vehicle body, the entire process of research, development, testing, application, and management of automotive electronics is long and expensive. This is the most domestic An important reason why automotive electronics companies are unwilling to devote their energy to technology research and development and choose to make faster, low-value-added products. In addition, the domestic automotive electronics companies started late and have a weak foundation, and it is difficult to break into the core technology fields that foreign auto giants have already firmly controlled. This will not keep up with the progress of the industry. The gap between the domestic auto electronics industry and foreign countries continues to widen. .

It is not difficult to understand why this disease in the Chinese automotive electronics industry has been placed in the general environment of the Chinese automobile industry and even the entire Chinese industrial development. The lack of core technology is not a shortcoming in the automotive electronics industry. It is a real portrayal of the development of most industries. Under such a deformed development model, it is by no means a straightforward route to China's automotive electronics industry. Catching up with foreign advanced technology is more like an empty phrase.

How to get rid of the dilemma of being controlled by people, break the foreign blockade, and how to balance the relationship between profit and R&D? It tests every Chinese automotive electronics company and tests the relevant government departments. Not long ago, the China Automotive Electronics Standards Work Committee was formally established to further advance the development of local automotive electronics. Some domestic automotive electronics companies have also gradually penetrated from vehicle-mounted infotainment products to automotive control electronics products, aiming to compete with foreign manufacturers at a higher technological level. These new weather let us see the hope of the rise of the local automotive electronics industry.

At present, some new changes have emerged in the domestic automotive electronics industry, including both opportunities and challenges. Faced with this new situation, the government’s relevant departments and local large-scale automotive electronics companies shoulder heavy burdens. To play a supporting and guiding role in the industry, they should play an active role, with less eagerness for quick success, more down-to-earth, and accelerated research and development of automobiles. The pace of electronic core technology has created the Chinese brand of automotive electronics and promoted the rapid development of the entire national automotive industry.

Automotive Electronics Market Shows New Changes

Today, the domestic automotive electronics market is showing new changes. Industry experts believe that this is both a challenge and an opportunity. The relevant government departments and automotive electronics companies should actively cooperate and seize opportunities in a multi-pronged manner.

From the perspective of the domestic automotive electronics refinement market, these changes include: due to the high penetration rate of automotive electronic power control systems, less growth point, relatively slow growth rate, market share will gradually decline, and chassis and safety control systems are used more frequently. Therefore, the market will grow rapidly in the next few years; as consumers continue to increase the pursuit of vehicle comfort, the penetration rate of body electronic products will continue to increase, the body electronics market will develop faster; with the car information and The continuous improvement of entertainment system products and services, as well as the reasons for lower market entry barriers, will enable the automotive electronics market to develop rapidly.

"The current development trend of China's automotive electronics industry is already very clear, that is, the rapid growth of automotive electronics after-load market, intelligent, digital and bussiness will become the direction of product development, safety, energy saving, comfort, entertainment will become the future of automotive electronic application development In addition, automotive electronics technology and aviation, railway electronic technology will further realize the interaction, China's automotive electronics industry is gradually becoming more internationalized.” said Yang Hong, Deputy General Manager of Shenzhen Hangsheng Electronics Co., Ltd.

From the perspective of the domestic automotive electronics industry, although most of the current automotive electronics companies are still working hard in the low-end areas, some of them are trying to obtain advanced technology through overseas acquisitions. On July 13, 2010, Beijing Pacific Century Automotive Systems Co., Ltd. acquired General Motors global steering and transmission business. Prior to this, Geely had acquired Australia's DSI transmission and Wanxiang also acquired the US DS automobile steering shaft business.

Experts said that relevant government departments and domestic automotive electronics companies should take active action to take the opportunity to enlarge and strengthen China's automotive electronics industry. They suggested that at present, we should start from the following aspects, avoid weaknesses, break through foreign technology blockades, and build China's automotive electronics national brands.

The first is to choose a breakthrough and increase government support. According to many experts, the current breakthrough in China's development of the automotive electronics industry should focus on areas such as trucks, passenger cars and mid- and low-end cars with independent intellectual property rights. In these areas, local automotive electronics companies have a certain amount of market discourse power. The government must increase support for these enterprises and help them become bigger and stronger by establishing methods such as the development fund of the automotive electronics industry and the national automotive electronics laboratory. At the same time, it can support the transition of companies with stronger capabilities to core automotive electronic devices such as power control, and ultimately achieve a more reasonable product layout.

“What is currently lacking in China is a large-scale local national automotive electronics enterprise group. There is no brand in the competition with foreign automotive electronics giants. It is difficult to accumulate influence in the market. The government should actively support large-scale national automotive electronics companies and encourage They undertake major state-of-the-art automotive electronics projects, increase investment in R&D, and introduce high-end talents, which will provide certain subsidies for the technological transformation and infrastructure construction of these enterprises,” said an expert at the Jilin University Automobile Institute.

The second is to actively learn from the international automotive electronics giants and pay attention to digestion in cooperation. Experts said that auto parts companies, including automotive electronics companies, are actively starting overseas acquisitions. This is a manifestation of the deepening cooperation between domestic companies and foreign companies. However, whether mergers and acquisitions can avoid simple copying and change the shortcomings of reverse imitation, Dealing with the relationship between digestion and absorption and independent innovation is precisely the key to the development of domestic automotive electronics companies.

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