Opportunity 1: High growth of domestic automotive market
"In the next decade, China's demand for automobiles will still maintain an average annual growth rate of 13% to 15%. Compared to the world's leading automotive countries, China's automobile market has a relatively long period of rapid growth, which is about from 2009 to 2023, spanning about 15 years. This is a good development opportunity for all domestic component companies."
Our country has its own special national conditions, and our income gap is larger than those of the powerful automobile countries. The size of the income gap will play a crucial role in the popularity of durable consumer goods. The smaller the income gap, the shorter the period of popularization of durable consumer goods, and vice versa, the larger the income gap, which determines the relatively slow pace of popularization of automobiles in China. As a result, the automobile market in China will maintain a longer period of sustained growth, which also wins a relatively long development time for independent brand enterprises with relatively weak competitiveness in a certain period of time.
Opportunity 2: Accelerating the pace of internationalization of the domestic automotive industry
"During the 12th Five Year Plan period, the country will vigorously promote the internationalization of the automobile industry and encourage automobile enterprises to go global. With the internationalization of complete vehicle factories, it will also play a good driving role for China's independent component enterprises," Xu Changming said.
"The selling points of our automotive products and the buying points of consumers who have grown rapidly over a certain period of time are highly compatible. Within a certain period of time, the fastest growing sales volume of automotive products worldwide is in South America, and the markets in Asia, excluding Japan and South Korea, as well as Africa, are also growing rapidly. However, ordinary people in these countries are more focused on low-cost automotive products. At the same time, as the country actively promotes the internationalization of the automotive industry "China will soon become a powerful automobile country. Against this backdrop, component companies will also usher in new development opportunities.".
Opportunity 3: Rapid development of autonomous vehicle enterprises
"A new change is taking place in China's automotive market, which is that the second and third tier markets, especially the third tier market, are becoming the main growth point and support point for China's automotive development in the future. However, consumers in the third tier market are not so sensitive to foreign famous cars, on the contrary, they pay more attention to the economic applicability of cars, while influenced by traditional Chinese thinking, they have their own preferences for the appearance of cars. Aiming at these characteristics, independent products are developed "Brand cars have more development advantages among them."
With the gradual strengthening of domestic independent brand enterprises, it is bound to promote the rapid development of domestic component enterprises. Domestic independent brand enterprises are facing both opportunities and challenges. One of the challenges is that the cost advantage of independent component companies is being weakened. As the prices of production factors continue to rise, the costs of independent component companies gradually increase. However, due to the continuous expansion of scale and the continuous promotion of research and development, the cost of wholly foreign-owned and joint venture parts enterprises has been continuously declining.