China's auto parts market trends

1. Accelerated industrial integration and large-scale development of enterprises:

• Increased mergers and acquisitions: There are a large number of domestic auto parts enterprises, but generally they are small in scale, weak in strength, and lack sufficient research and development capabilities. To improve competitiveness, reduce costs, and enhance quality, there will be an increasing number of mergers and acquisitions among enterprises to form economies of scale and gain a favorable position in the fierce market competition.

• Closer ties with vehicle manufacturers: Under the pressure of competition, vehicle manufacturers have continuously raised their requirements for parts suppliers, prompting parts enterprises to establish closer cooperation with vehicle manufacturers, such as participating in the product development of vehicle manufacturers and providing systematic and modular supporting services to achieve coordinated development.

2. Technological innovation promotes industrial upgrading:

• Intelligent and connected development: With the continuous deepening of the intelligent and connected trends of automobiles, auto parts are also developing in an intelligent direction. For example, the demand for intelligent sensors, autopilot-related parts, and vehicle networking modules will increase significantly. Parts enterprises need to increase research and development investment in these fields to meet market demands.

• Increased demand for electrified parts: The rapid development of the new energy vehicle market has driven the growth of demand for matching electrified parts, such as battery, motor, and electronic control system components. At the same time, charging facilities and related parts will also usher in development opportunities.

• Widespread application of lightweight technology: To improve the fuel economy of automobiles and reduce emissions, lightweight has become an important direction for automobile development. Auto parts enterprises will use more lightweight materials such as aluminum alloy, high-strength steel, and carbon fiber, as well as optimize the structure of parts to achieve lightweight products.

• The degree of generalization and standardization of parts will be continuously improved: Generalization and standardization help improve production efficiency and reduce costs, and at the same time facilitate the maintenance and replacement of parts. In the future, the degree of generalization and standardization of auto parts will continue to increase, and enterprises need to strengthen the research and application of relevant standards.

3. Global procurement and continuous growth in exports:

• Obvious global procurement trend: More and more vehicle manufacturers implement global procurement strategies to reduce costs, improve product quality and competitiveness. As a major producer of auto parts, China will occupy an important position in the global auto parts supply chain. Domestic parts enterprises need to continuously improve product quality and technological level to meet the needs of the international market.

• Expanding export scale: Chinese auto parts products have cost advantages and a certain quality level, and have strong competitiveness in the international market. In the future, with the acceleration of the international development of enterprises, the export scale of auto parts will continue to grow, especially the share in emerging markets is expected to continuously increase.

4. The characteristics of clustered industrial development are prominent: Industrial clusters can realize resource sharing, complementary advantages, and improve the overall competitiveness of the industry. At present, China has formed some auto parts industrial clusters, such as industrial clusters in the Yangtze River Delta, Pearl River Delta, and Bohai Rim regions. In the future, these industrial clusters will continue to grow and strengthen. At the same time, some new industrial clusters may also emerge in other regions.

5. The aftermarket service has huge potential:

• The rise of auto parts e-commerce: With the development of Internet technology, auto parts e-commerce platforms have gradually emerged, providing consumers with more convenient and efficient shopping channels. Auto parts e-commerce platforms can integrate online and offline resources, improve transaction efficiency, and reduce transaction costs. In the future, it will become one of the important models for auto parts sales.

• Increased demand in the aftermarket: With the continuous increase in car ownership, the demand for parts in the automotive aftermarket will also continue to grow. Consumers have an increasing demand for car maintenance and repair, and also put forward higher requirements for the quality, brand, and service of parts, which will promote the development of the auto parts aftermarket.