How can auto parts companies compete more in the domestic market?

The global auto market is in a state of mourning, and sales in the Chinese auto market hit record highs in March. For auto parts suppliers, China's domestic matching market is full of enthusiasm. How to make a share in the domestic matching market has become the strategic focus of many current suppliers.

However, in fact, although the market has just warmed up, the competition in this market has been quite hot. Chen Wenkai, president of, an e-commerce platform of the famous automobile industry, believes that companies that can have a place in the domestic matching market now have three main types or combinations:

Technology leadership company. Such companies are mainly overseas multinational corporations. They have strong technical capabilities in certain high-tech products or have strong integration capabilities in certain modules/systems.

Relational company. There are very close relationships with certain OEMs including asset ties, or special relationships with local governments. They may not be inferior in technology and cost, but they are definitely not the most competitive companies. The number of such companies is still quite large.

Cost-leading company. Such companies have no access to world-leading technologies, nor can they be inextricably linked to customers. However, they rely on the premise of quality, technology, and service to reach customers, and have greater cost advantages to compete. There is a place in it. Most of these companies are independent modern management companies.

Of course there are companies that are a combination of some of these three types of features.

Start with the three types of companies themselves.

Technology-led companies have some hidden concerns in the current state of the Chinese auto market. Because the next two to three years will be the development of the middle and low-end car as the main force. The factors of "the most advanced and reliable technology" in these low-cost models are declining, and become a general factor in technical factors. It is likely to be replaced by other medium-technology but more cost-effective suppliers. Because of the cost factor in the procurement of the priority has been strengthened. In addition, the demand for product technology upgrades for more and more components in mid-to-low-end models is not particularly fast, which provides other suppliers with the opportunity to achieve the same level of learning technology. Therefore, technology-led companies must not only strengthen their own strengths of technology leadership, but also work hard on how to use technologies/processes to reduce costs and gain more customer base.

Relational companies can hardly judge short-term development. However, in the long term, if we do not use stable customer relationships, and quality, cost, and service are close to the industry's leading level, there are also significant risks. According to Chen Wenkai, president of, five or so joint-venture vehicle companies have commissioned the platform to recommend suppliers outside the traditional system. He said: "The competition among vehicle companies has passed the stage of products, sales service, brand building, etc. Now that the smoke has spread to the supply chain management that is considered to be the backyard. Even better products, strong sales brand Management, if there is no price competitiveness, the car will be more and more difficult to sell.” From this perspective, the vehicle companies in order to care about the overall situation, in some products, the possibility of “sheltering the car” will be increasing. Such companies also need to reduce their reliance on close customers and diversify their customer base. Delphi's bankruptcy is the best example, although his relationship is the world's largest general auto company.

As far as cost-leading companies are concerned, they have the most potential for development. What needs to be done is to improve quality and service capabilities, strive to consolidate business relationships with various types of companies, and continue to expand market share, so that the cost of the company in its own field can reach a leading position that competitors can hardly reach.

For those suppliers whose main business is in the export market and there are not many customer bases in the domestic market, they need to be more patient and aware of their real needs on the basis of analyzing their own competitive advantages. The idea of ​​getting an order within a month or two is impractical, because the domestic market needs a certain amount of time to understand each other and run in.