The newspaper’s Shanghai avalanche in the Malay auto market caused profit pressure to gradually shift to supporting plants and the aftermarket became a life-saving straw. An industry reshuffle is inevitable. The status quo of domestic parts and components companies subject to vehicle manufacturers will certainly change, but it is certainly not overnight. It is almost overnight. The Chinese auto market bid farewell to the intoxicating peak period, faced with huge inventory and retreats. Car prices, whether vehicle manufacturers or dealers are all sad, but this time Chen Weijun is with a complex mentality to view this sudden avalanche. Chen Weijun is the assistant to the general manager of Zhejiang Wanxiang Machinery Co., Ltd.. Wanxiang Machinery is a subsidiary company of Wanxiang Group, a well-known automobile parts manufacturer in China. It is one of the national manufacturers that specialize in the production of constant velocity joints for automobiles. . On the one hand, since the procurement of spare parts and components accounts for an average of 70%-80% of the entire vehicle, the profit loss caused by the auto market price war is actually mostly distributed to the upstream component suppliers. In addition, the recent increase in the prices of raw materials such as steel products has caused parts companies to agonize. "Geely yesterday we would also like to cut the price by 25%. But where does this profit margin come from? The price we have given him is already the bottom line. If the depreciation of fixed assets is taken into account, it should still be a deficit." Chen's tone seemed helpless. On the other hand, this inflection point that affects the whole industry may be an opportunity for Wanxiang Machinery, a local manufacturer of strong parts and accessories. This opportunity is to enter the supporting system of the joint venture vehicle factory. Because vehicle manufacturers must now seriously consider the issue of cost, the biggest advantage of domestic suppliers is low prices. However, the extent to which the overall decline in industry profits can shake up the existing pattern between auto manufacturers and suppliers is still unknown. The only thing that can be determined is that the industry reshuffle is inevitable. Teng Bole, secretary general of the China Automobile Industry Advisory Committee, said: “The current status of domestic spare parts companies subject to vehicle manufacturers will certainly change, but it is certainly not an important task.†Who is the game rule maker “in the automobile industry chain? At present, China’s auto after-sales service market is in a passive, weak, and beaten position. One important reason is that automakers—especially joint venture car companies with technical advantages—have been suppressing themselves for their own sake. Our development," said Chen Xiaohong, general manager of Zhejiang General Automobile Service Center. The Zhejiang Ordinary Automobile Service Center where Chen Xiaohong is located was established in June last year. Its investor is Wanxiang Group. The general company's goal is to become an independent third-party parts and components distributor, “to incorporate branded parts and accessories into this nationwide chain of sales networks. As part of the procurement and logistics platform for spare parts, we represent the OEMs and parts manufacturers For auto repair plants and ordinary consumers.†This goal is undeniable, because it faces many 4S shop systems where the entire vehicle manufacturers have flourished, and it is necessary to dig out spare parts and services from this system. It is impossible task. Chen Xiaohong soon encountered tremendous resistance. The reason is very simple. The entire vehicle company stipulates that the parts and components factory under it will not be available to third parties. This means that it is difficult for ordinary companies to obtain the supply of parts for well-known brands. The general rules of the game are as follows: Prior to the batch supply to the vehicle plant, the supporting plant will sign an agreement. Whether it is loading parts or after-sales maintenance parts, the former can only directly deliver products to the latter, and the latter can be assigned to the production line and 4S. Store system. If the spare parts factory wants to independently ship the goods to the aftermarket, it cannot use the logo of the whole vehicle product, nor can it use the tooling mold authorized by the automaker. This is despite the fact that the mold was developed and cost-produced by the accessories factory itself. OEMs only provide product parameters - otherwise heavy penalties will be imposed. Of course, the spare parts factory can also independently develop a set of tooling molds and produce its own branded products that are sold to the aftermarket. However, this will inevitably impact the sales system of the entire vehicle factory and affect its relationship with the automaker. Therefore, this situation is rare, and if so, there is not much supply. In fact, Chen Xiaohong’s current problems are almost exactly the same as Wanxiang. For a long period of time in the past, Wanxiang Group could only make OEMs for a few OEMs such as Hainan Mazda, Hafei, and Liuzhou Wuling. The joint venture factories of the three major auto groups and some Japanese auto makers all have their own relatively closed parts supporting systems, and it is very difficult to enter them. It is precisely for this reason that Wanxiang has been motivated to enter into the distribution and distribution of spare parts. According to Chen Xiaohong, the current relationship between domestic automakers and supporting plants is not reasonable. “One consequence of this pattern is that the supporting plant has become its own gravedigger.†The reason is very simple. Due to the restriction of the vehicle manufacturer, the supporting plant has virtually given up the aftermarket. This just gave its competitors— - Opportunities for those parts and components manufacturers that have not been able to enter the vehicle factory supporting system (the products they produce are called "slave parts") are rapidly growing. A typical example is the deputy parts of the Volkswagen series. Their product quality and cost performance have surpassed that of the public. After the expansion of these vice-plants, they will participate in the global procurement of the automakers and in turn squeeze the supporting plants. More importantly, the supporting plants have handed over their vast market share to their competitors. According to the ratio of revenue, the current domestic sales of vehicle sales accounted for 20%, spare parts and accessories accounted for 20%, and the remaining 60% were in the after-sales service market (including car beauty, automotive finance, etc.). Especially in the current weak car prices, profit pressure gradually transferred to the supporting plant, the aftermarket is a life-saving straw. “Actually, we very much hope to enter the after-sales maintenance market.†Chen Jicheng, vice president of Fuyao Glass, said that Fuyao has consulted with Guangben several times and even proposed to let his hundreds of sales outlets to help with its logistics and distribution. The cost of this channel, but it is often fruitless. The reason given by the auto manufacturer is nothing less than two. First, there is a problem with the product quality of the deputy factory parts. Second, maintaining the 4S shop sales system is conducive to establishing customer loyalty. In this regard, Teng Bole, secretary general of the China Automobile Industry Advisory Committee, believes that quality issues are not critical. “We once removed the foreign parts and domestically produced products from the logo so that engineers from foreign OEMs judged that the test results were domestically successful.†Teng Bole said, “Although the overall level of domestic spare parts is not optimistic, It cannot be denied that we have already reached the international level in certain local areas." In fact, the key lies in the huge profits from supporting parts and components. Parts dealer Mr. Z told reporters that an imported spare parts, if the import price is 100 yuan, to the 4S shop may have turned over five or six times, "There was a boss who opened the Buick Regal told me that a brake pad It took more than 1,300 yuan, and I told him that this original brake pad purchased by General Motors, the purchase price may be less than 100 yuan.The other party was quite surprised at that time. In fact, most car owners in China simply do not know the vehicle factory gourd What kind of medicine to sell.†Z manager said, “If you do a follow-up investigation, figure out three prices: the supporting factory supplies the auto factory, the auto factory sells to the 4S shop, the 4S shop sells to the consumer, calculate it The result of the spread may be shocking to consumers.†Not long ago, a well-known joint venture automobile company in China suddenly stopped production for 24 hours. The reason was rather absurd: The company’s insiders stole imported spare parts and sold them to the aftermarket, which led to the production line. Unable to start work properly. According to a source close to the insider, some parts of the joint venture company were completely imported from abroad. In the past, the normal condition was to supply these parts and components in proportion to the auto production line and its 4S stores, but due to the very low import prices, The price of the 4S shop has a huge spread, so there are internal personnel who steal the parts from the import link and resell it to another after-sales service center. Obviously, it is difficult for us to verify the truth of this deteriorating image from the company, but in fact, within the spare parts circle, this type of news is no longer a secret. A parts dealer told reporters that the more common phenomenon is that some trading companies that import and export spare parts for auto joint ventures increase the number of spare parts imports privately, and then sell more imported spare parts to the aftermarket. Exorbitant profits. It is even more common for supporting plants to privately invest some of their ancillary components into the aftermarket. Chen Xiaohong believes that these phenomena reflect the abnormal relationship between automakers and component manufacturers. The result is that consumers pay high costs for this, and supporting plants are losing market opportunities. But to get rid of the control of the vehicle factory is easier said than done. The relationship between OEMs and suppliers can be roughly divided into three types. The highest level of the pyramid is the strategic partnership component manufacturers that participate in the synchronous R&D, followed by the second-tier suppliers, the third-tier suppliers, and parts factories in this pyramid. The location determines the extent to which it is subject to the OEM. On June 17th, a core value circle dreamed for, a report titled “Requesting for Coordination of Related State Authorities to Abolish Technical Barriers Recognized by Non-International Conventions by Japanese Automobile Enterprises†(hereinafter referred to as “Reportâ€) was sent to China Construction Glass. With the Industrial Glass Association. The drafter of the "Report" is Fuyao Glass Industry Group Co., Ltd. - China's largest and seventh largest automotive glass supplier in the world. The cause of the incident was that in the first quarter of this year, the Japanese automakers Toyota, Nissan, Mazda, Suzuki’s factory in China also announced that: In the future, the side windows and rear seats of new cars will all use an automotive glass called UV-CUT. The reason is This glass can effectively filter ultraviolet rays, which has the effect of energy saving and environmental protection. However, the problem is that such UV-CUT glass is currently produced only by Japan's Asahi Glass, Plate Glass, Central Glass, and even worse, the three Japanese companies do not sell UV-CUT glass to any of their peers. This means that domestic auto glass makers, including Fuyao, will be completely excluded from the list of Japanese auto company suppliers. Chen Jicheng, vice president of Fuyao Group, believes that this is a technical barrier recognized by non-international conventions and will not only force domestic auto glass companies to abandon their original customers' supply contracts (including all new vehicles using UV-CUT glass in the Chinese market). The consequences include the purchase of a car equipped with such glass. Once it needs repairs, it will have to pay more than twice the domestic repair cost of the same performance product. The insurance industry will also have to The principle of originating original compensation pays high fees. “Glass with similar or almost the same performance as UV-CUT can be produced by all major float glass manufacturers in the world, just under different names, such as Solar Green or Solar Block produced by PPG, and SEKURIT SOL by Saint Gobain, France. “Chen Jicheng said, “The reason why Japanese auto companies adopt UV-CUT is that they have good energy-saving and environmental protection performance. However, in fact, this type of glass is precisely because of the high cost and the thermal insulation efficiency is lower than some of the internationally-used heat-absorbing glass. It was abandoned by other international glass production factories.†Fuyao added a technical comparison test report after the “Reportâ€, which explains in detail. Since UV-CUT is not the best product, why does Japanese manufacturers in the Chinese market favor it? The real secret lies in the fact that three companies, including Asahi Glass, have participated in the simultaneous research and development of Japanese cars, and the latter is a strategic partnership. "According to the general situation, even those parts and components manufacturers that participate in simultaneous research and development can only write technical specifications and product performance into design drawings. However, Asahi Glass and others use this relationship to identify the exclusive name into the vehicle design." Feel this The power of strategic alliances is not just domestic auto glass companies. Two years ago, Shenlong Fukang wanted to reduce production costs. The external bidding supplier and Wanxiang Group had recommended three products such as shock absorbers. “Despite the fact that the price is 30% lower than that of Shenlong Beverly, and all the tests have passed, but in the end, The chief of the foreign side is not signing, and ultimately chose a French company.†Chen Weijun said, Wanxiang Group had tried to enter the supporting system of the three major joint ventures in the country, but eventually lost all. The main reason lies not in the universal price and product quality, but in the failure to break through the old alliance system of the auto factory. Tian Yu, general manager of FAW-Foot Automotive Parts Co., Ltd., said in an interview that although there are new cars on the market, these so-called new cars have already been listed in foreign countries and related supporting systems have already been established. “Chinese-funded parts and components companies need to start from scratch, but the follow-up foreign-funded supporting enterprises have long been well-attended. They are not at all a starting line.†With the completion of the layout of multinational auto giants in China, the related parts and components that followed Suppliers also speed up the Chinese market. According to statistics, of the 5,000 auto parts companies in the country, 1,200 are foreign-invested enterprises. Most of the world’s top 20 auto parts companies have set up joint ventures or wholly-owned enterprises in China. In fact, the global auto giants now have their own long-term partners. These component suppliers have long been involved in the simultaneous R&D of vehicle manufacturers. They have mastered the right to speak of technical standards and formed a fact with auto manufacturers. On the core value circle, the gap of survival for newcomers has been quite limited. "Fuyao's dream is to be able to break into this core value circle." Chen Jicheng said. Globally, Fuyao has not yet become a strategic partner of the auto giant. To this end, starting in November last year, Fuyao invested 200 million U.S. dollars to build an automotive-grade original film factory in Fuqing. Some of the plant's production technology was purchased from PPG. PPG is the 4th-ranked automotive glass manufacturer in the world and supplies directly to Mercedes-Benz, BMW, and Chrysler manufacturers. In August of this year, Fuyao will also set up its own first R&D center and invest 1%-2% of its sales for technology development. “Entering the synchronized R&D system of multinational auto giants, we put the products designed by our R&D department as a kind of technical barrier into the whole vehicle, and it is our goal to change from passive to active. This is our goal.†Chen Jicheng said.
Who makes high-priced foam for auto parts?
The newspaper’s Shanghai avalanche in the Malay auto market caused profit pressure to gradually shift to supporting plants and the aftermarket became a life-saving straw. An industry reshuffle is inevitable. The status quo of domestic parts and components companies subject to vehicle manufacturers will certainly change, but it is certainly not overnight. It is almost overnight. The Chinese auto market bid farewell to the intoxicating peak period, faced with huge inventory and retreats. Car prices, whether vehicle manufacturers or dealers are all sad, but this time Chen Weijun is with a complex mentality to view this sudden avalanche. Chen Weijun is the assistant to the general manager of Zhejiang Wanxiang Machinery Co., Ltd.. Wanxiang Machinery is a subsidiary company of Wanxiang Group, a well-known automobile parts manufacturer in China. It is one of the national manufacturers that specialize in the production of constant velocity joints for automobiles. . On the one hand, since the procurement of spare parts and components accounts for an average of 70%-80% of the entire vehicle, the profit loss caused by the auto market price war is actually mostly distributed to the upstream component suppliers. In addition, the recent increase in the prices of raw materials such as steel products has caused parts companies to agonize. "Geely yesterday we would also like to cut the price by 25%. But where does this profit margin come from? The price we have given him is already the bottom line. If the depreciation of fixed assets is taken into account, it should still be a deficit." Chen's tone seemed helpless. On the other hand, this inflection point that affects the whole industry may be an opportunity for Wanxiang Machinery, a local manufacturer of strong parts and accessories. This opportunity is to enter the supporting system of the joint venture vehicle factory. Because vehicle manufacturers must now seriously consider the issue of cost, the biggest advantage of domestic suppliers is low prices. However, the extent to which the overall decline in industry profits can shake up the existing pattern between auto manufacturers and suppliers is still unknown. The only thing that can be determined is that the industry reshuffle is inevitable. Teng Bole, secretary general of the China Automobile Industry Advisory Committee, said: “The current status of domestic spare parts companies subject to vehicle manufacturers will certainly change, but it is certainly not an important task.†Who is the game rule maker “in the automobile industry chain? At present, China’s auto after-sales service market is in a passive, weak, and beaten position. One important reason is that automakers—especially joint venture car companies with technical advantages—have been suppressing themselves for their own sake. Our development," said Chen Xiaohong, general manager of Zhejiang General Automobile Service Center. The Zhejiang Ordinary Automobile Service Center where Chen Xiaohong is located was established in June last year. Its investor is Wanxiang Group. The general company's goal is to become an independent third-party parts and components distributor, “to incorporate branded parts and accessories into this nationwide chain of sales networks. As part of the procurement and logistics platform for spare parts, we represent the OEMs and parts manufacturers For auto repair plants and ordinary consumers.†This goal is undeniable, because it faces many 4S shop systems where the entire vehicle manufacturers have flourished, and it is necessary to dig out spare parts and services from this system. It is impossible task. Chen Xiaohong soon encountered tremendous resistance. The reason is very simple. The entire vehicle company stipulates that the parts and components factory under it will not be available to third parties. This means that it is difficult for ordinary companies to obtain the supply of parts for well-known brands. The general rules of the game are as follows: Prior to the batch supply to the vehicle plant, the supporting plant will sign an agreement. Whether it is loading parts or after-sales maintenance parts, the former can only directly deliver products to the latter, and the latter can be assigned to the production line and 4S. Store system. If the spare parts factory wants to independently ship the goods to the aftermarket, it cannot use the logo of the whole vehicle product, nor can it use the tooling mold authorized by the automaker. This is despite the fact that the mold was developed and cost-produced by the accessories factory itself. OEMs only provide product parameters - otherwise heavy penalties will be imposed. Of course, the spare parts factory can also independently develop a set of tooling molds and produce its own branded products that are sold to the aftermarket. However, this will inevitably impact the sales system of the entire vehicle factory and affect its relationship with the automaker. Therefore, this situation is rare, and if so, there is not much supply. In fact, Chen Xiaohong’s current problems are almost exactly the same as Wanxiang. For a long period of time in the past, Wanxiang Group could only make OEMs for a few OEMs such as Hainan Mazda, Hafei, and Liuzhou Wuling. The joint venture factories of the three major auto groups and some Japanese auto makers all have their own relatively closed parts supporting systems, and it is very difficult to enter them. It is precisely for this reason that Wanxiang has been motivated to enter into the distribution and distribution of spare parts. According to Chen Xiaohong, the current relationship between domestic automakers and supporting plants is not reasonable. “One consequence of this pattern is that the supporting plant has become its own gravedigger.†The reason is very simple. Due to the restriction of the vehicle manufacturer, the supporting plant has virtually given up the aftermarket. This just gave its competitors— - Opportunities for those parts and components manufacturers that have not been able to enter the vehicle factory supporting system (the products they produce are called "slave parts") are rapidly growing. A typical example is the deputy parts of the Volkswagen series. Their product quality and cost performance have surpassed that of the public. After the expansion of these vice-plants, they will participate in the global procurement of the automakers and in turn squeeze the supporting plants. More importantly, the supporting plants have handed over their vast market share to their competitors. According to the ratio of revenue, the current domestic sales of vehicle sales accounted for 20%, spare parts and accessories accounted for 20%, and the remaining 60% were in the after-sales service market (including car beauty, automotive finance, etc.). Especially in the current weak car prices, profit pressure gradually transferred to the supporting plant, the aftermarket is a life-saving straw. “Actually, we very much hope to enter the after-sales maintenance market.†Chen Jicheng, vice president of Fuyao Glass, said that Fuyao has consulted with Guangben several times and even proposed to let his hundreds of sales outlets to help with its logistics and distribution. The cost of this channel, but it is often fruitless. The reason given by the auto manufacturer is nothing less than two. First, there is a problem with the product quality of the deputy factory parts. Second, maintaining the 4S shop sales system is conducive to establishing customer loyalty. In this regard, Teng Bole, secretary general of the China Automobile Industry Advisory Committee, believes that quality issues are not critical. “We once removed the foreign parts and domestically produced products from the logo so that engineers from foreign OEMs judged that the test results were domestically successful.†Teng Bole said, “Although the overall level of domestic spare parts is not optimistic, It cannot be denied that we have already reached the international level in certain local areas." In fact, the key lies in the huge profits from supporting parts and components. Parts dealer Mr. Z told reporters that an imported spare parts, if the import price is 100 yuan, to the 4S shop may have turned over five or six times, "There was a boss who opened the Buick Regal told me that a brake pad It took more than 1,300 yuan, and I told him that this original brake pad purchased by General Motors, the purchase price may be less than 100 yuan.The other party was quite surprised at that time. In fact, most car owners in China simply do not know the vehicle factory gourd What kind of medicine to sell.†Z manager said, “If you do a follow-up investigation, figure out three prices: the supporting factory supplies the auto factory, the auto factory sells to the 4S shop, the 4S shop sells to the consumer, calculate it The result of the spread may be shocking to consumers.†Not long ago, a well-known joint venture automobile company in China suddenly stopped production for 24 hours. The reason was rather absurd: The company’s insiders stole imported spare parts and sold them to the aftermarket, which led to the production line. Unable to start work properly. According to a source close to the insider, some parts of the joint venture company were completely imported from abroad. In the past, the normal condition was to supply these parts and components in proportion to the auto production line and its 4S stores, but due to the very low import prices, The price of the 4S shop has a huge spread, so there are internal personnel who steal the parts from the import link and resell it to another after-sales service center. Obviously, it is difficult for us to verify the truth of this deteriorating image from the company, but in fact, within the spare parts circle, this type of news is no longer a secret. A parts dealer told reporters that the more common phenomenon is that some trading companies that import and export spare parts for auto joint ventures increase the number of spare parts imports privately, and then sell more imported spare parts to the aftermarket. Exorbitant profits. It is even more common for supporting plants to privately invest some of their ancillary components into the aftermarket. Chen Xiaohong believes that these phenomena reflect the abnormal relationship between automakers and component manufacturers. The result is that consumers pay high costs for this, and supporting plants are losing market opportunities. But to get rid of the control of the vehicle factory is easier said than done. The relationship between OEMs and suppliers can be roughly divided into three types. The highest level of the pyramid is the strategic partnership component manufacturers that participate in the synchronous R&D, followed by the second-tier suppliers, the third-tier suppliers, and parts factories in this pyramid. The location determines the extent to which it is subject to the OEM. On June 17th, a core value circle dreamed for, a report titled “Requesting for Coordination of Related State Authorities to Abolish Technical Barriers Recognized by Non-International Conventions by Japanese Automobile Enterprises†(hereinafter referred to as “Reportâ€) was sent to China Construction Glass. With the Industrial Glass Association. The drafter of the "Report" is Fuyao Glass Industry Group Co., Ltd. - China's largest and seventh largest automotive glass supplier in the world. The cause of the incident was that in the first quarter of this year, the Japanese automakers Toyota, Nissan, Mazda, Suzuki’s factory in China also announced that: In the future, the side windows and rear seats of new cars will all use an automotive glass called UV-CUT. The reason is This glass can effectively filter ultraviolet rays, which has the effect of energy saving and environmental protection. However, the problem is that such UV-CUT glass is currently produced only by Japan's Asahi Glass, Plate Glass, Central Glass, and even worse, the three Japanese companies do not sell UV-CUT glass to any of their peers. This means that domestic auto glass makers, including Fuyao, will be completely excluded from the list of Japanese auto company suppliers. Chen Jicheng, vice president of Fuyao Group, believes that this is a technical barrier recognized by non-international conventions and will not only force domestic auto glass companies to abandon their original customers' supply contracts (including all new vehicles using UV-CUT glass in the Chinese market). The consequences include the purchase of a car equipped with such glass. Once it needs repairs, it will have to pay more than twice the domestic repair cost of the same performance product. The insurance industry will also have to The principle of originating original compensation pays high fees. “Glass with similar or almost the same performance as UV-CUT can be produced by all major float glass manufacturers in the world, just under different names, such as Solar Green or Solar Block produced by PPG, and SEKURIT SOL by Saint Gobain, France. “Chen Jicheng said, “The reason why Japanese auto companies adopt UV-CUT is that they have good energy-saving and environmental protection performance. However, in fact, this type of glass is precisely because of the high cost and the thermal insulation efficiency is lower than some of the internationally-used heat-absorbing glass. It was abandoned by other international glass production factories.†Fuyao added a technical comparison test report after the “Reportâ€, which explains in detail. Since UV-CUT is not the best product, why does Japanese manufacturers in the Chinese market favor it? The real secret lies in the fact that three companies, including Asahi Glass, have participated in the simultaneous research and development of Japanese cars, and the latter is a strategic partnership. "According to the general situation, even those parts and components manufacturers that participate in simultaneous research and development can only write technical specifications and product performance into design drawings. However, Asahi Glass and others use this relationship to identify the exclusive name into the vehicle design." Feel this The power of strategic alliances is not just domestic auto glass companies. Two years ago, Shenlong Fukang wanted to reduce production costs. The external bidding supplier and Wanxiang Group had recommended three products such as shock absorbers. “Despite the fact that the price is 30% lower than that of Shenlong Beverly, and all the tests have passed, but in the end, The chief of the foreign side is not signing, and ultimately chose a French company.†Chen Weijun said, Wanxiang Group had tried to enter the supporting system of the three major joint ventures in the country, but eventually lost all. The main reason lies not in the universal price and product quality, but in the failure to break through the old alliance system of the auto factory. Tian Yu, general manager of FAW-Foot Automotive Parts Co., Ltd., said in an interview that although there are new cars on the market, these so-called new cars have already been listed in foreign countries and related supporting systems have already been established. “Chinese-funded parts and components companies need to start from scratch, but the follow-up foreign-funded supporting enterprises have long been well-attended. They are not at all a starting line.†With the completion of the layout of multinational auto giants in China, the related parts and components that followed Suppliers also speed up the Chinese market. According to statistics, of the 5,000 auto parts companies in the country, 1,200 are foreign-invested enterprises. Most of the world’s top 20 auto parts companies have set up joint ventures or wholly-owned enterprises in China. In fact, the global auto giants now have their own long-term partners. These component suppliers have long been involved in the simultaneous R&D of vehicle manufacturers. They have mastered the right to speak of technical standards and formed a fact with auto manufacturers. On the core value circle, the gap of survival for newcomers has been quite limited. "Fuyao's dream is to be able to break into this core value circle." Chen Jicheng said. Globally, Fuyao has not yet become a strategic partner of the auto giant. To this end, starting in November last year, Fuyao invested 200 million U.S. dollars to build an automotive-grade original film factory in Fuqing. Some of the plant's production technology was purchased from PPG. PPG is the 4th-ranked automotive glass manufacturer in the world and supplies directly to Mercedes-Benz, BMW, and Chrysler manufacturers. In August of this year, Fuyao will also set up its own first R&D center and invest 1%-2% of its sales for technology development. “Entering the synchronized R&D system of multinational auto giants, we put the products designed by our R&D department as a kind of technical barrier into the whole vehicle, and it is our goal to change from passive to active. This is our goal.†Chen Jicheng said.