Artificial Intelligence
Realizing the asset restructuring of the product chain is an inevitable choice for the industrialization of spare parts industry
On November 16, Zhang Xiaoji, Chairman of the China Association of Automotive Engineers, delivered a keynote speech titled "Implementing the Scientific Outlook on Development and Promoting the Industrialization, Marketization, and Internationalization of Automotive Components" at the "China Automotive Industry Development Summit Forum and China Automotive Parts Entrepreneurs Annual Meeting" held in Guiyang. He emphasized that the path of industrial consolidation is an inevitable trend for the structural adjustment of the auto parts industry. However, this consolidation does not mean forming large conglomerates with similar products; rather, it refers to reorganizing assets along the automotive components supply chain to enhance efficiency and competitiveness.
Zhang Xiaoxuan provided an in-depth analysis of the current state of China’s auto parts industry. According to recent statistics, there are over 2,000 auto parts companies in China, with an annual industrial output value of approximately 400 billion yuan (compared to the national automotive industry's total output of 16,000 billion yuan). These companies employ around 1 million people, out of a total of 1.8 million in the entire automotive sector, and hold assets worth 400 billion yuan (compared to 1.4 trillion yuan for the whole industry). The industry generates about 30 billion yuan in annual profits, while the entire automotive sector is expected to reach 750 billion yuan this year. This indicates that China has built a relatively independent and robust auto parts industry capable of meeting local vehicle manufacturing needs.
Currently, the localization rate of imported auto products stands at over 40%, with some mature products reaching up to 60%–80%. Additionally, the export value of Chinese auto parts has reached 10 billion U.S. dollars, showing the growing global presence of the sector.
Despite these achievements, Zhang Xiaolu pointed out two major gaps between China’s auto parts industry and international standards. First, there is a significant gap in the development capacity of system-level components, particularly in synchronizing with original equipment manufacturers (OEMs) in research and development. This makes it difficult to meet modular supply requirements. Second, the R&D capabilities for automotive electronic components still need improvement. Although progress has been made in areas like airbags and ABS systems, China has yet to achieve substantial scale or market share, especially when compared to multinational corporations.
In line with the Central Government’s push for independent innovation, Zhang Xiaoji outlined three key tasks for the industry: first, innovating based on the introduction of foreign technology; second, integrating domestic and international technological resources to foster self-driven innovation; and third, conducting original innovation for technologies that cannot be acquired through purchase but are essential for the industry's growth.
Zhang Xiaoxuan stressed that while there are no shortcuts in developing China’s auto parts industry, building a solid foundation is crucial. Specialization, mass production, and high technical standards are necessary for the industry’s long-term development. Leveraging advanced international technology while improving product quality and technical levels will serve as a new starting point for future growth.
He also highlighted that the auto parts industry is a vital component of China’s broader automotive sector. Without the collective efforts of parts companies, achieving the goal of becoming a strong automotive nation remains unattainable. The transition from a large automotive producer to a true industry power is now a critical challenge, and industrial consolidation is a necessary step—though not simply about forming large groups, but about optimizing the supply chain and enhancing overall competitiveness.
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