Auto parts independent innovation focuses on words

Since the country elevated independent innovation to a key policy priority, this topic has consistently remained at the forefront of the industry. Whether a car is technologically advanced is largely reflected in its components and parts. As a result, independent innovation has increasingly influenced the auto parts sector. Many companies are now chasing the term regardless of whether they truly possess real technological capabilities, and they seem proud of it. However, when someone dares to voice concerns or offer a critical perspective, they often face an immediate backlash—what can only be described as a "stick hitting" mentality. This impatience and superficiality are quite evident. Having core technology is essential for a company’s survival. There's nothing wrong with that, and it's actually a positive thing. The problem arises when certain auto parts companies, despite being relatively strong, believe that simply participating in a few independent innovation forums and giving passionate speeches makes them leaders in the field. They act as if they're already ahead, but their actions don’t always match their claims. It's time to put an end to this impatience. Some auto parts company CEOs have shared with reporters that in the past two years, the number of independent innovation forums has exploded. Sometimes, there are over a dozen such events held nationwide each month. Companies are often invited to participate, sometimes without clear purpose or value. One CEO admitted that although the company is still in a growth phase, it feels pressured not to ignore the importance of independent innovation. However, due to limited experience in the automotive industry, it's hard to assess the true value of these forums or the influence of the guests involved. “If our customers are attending, we feel obligated to be there too,” he said. “Sometimes, all top managers are sent out, and the company is managed remotely through phone calls.” These sentiments reflect the views of many auto parts executives. Due to their weak position in the industry, Chinese auto parts companies must constantly align with vehicle manufacturers. If they don't, they risk losing their customers. The proliferation of so-called innovation forums reflects a trend of superficial engagement, where formalism prevails and real progress is lacking. Occasionally, companies will announce the establishment of R&D centers, claim to hire high-level researchers, but fail to back these claims with meaningful action. Any product, whether developed internally or sourced externally, is labeled as "independent innovation," leading to frequent patent disputes. Is having a desire, enthusiasm, or even importing a few foreign machines equivalent to real independent innovation? Of course not. Yet, this misconception remains widespread among many companies. A senior executive from Wanxiang Group emphasized: “This is a long, difficult, and complex process. We need to take initiative. If we keep waiting for government funding or technology, we’ll lack the perseverance needed to succeed.” As China's self-owned brand car companies grow, global automakers are increasing their procurement from China. At the same time, shorter development cycles for domestic OEMs mean that more attention is being given to vehicle design and assembly, leaving less room for other auto parts. This creates both opportunities and challenges for local auto parts companies. According to statistics, over 70% of the world's top 100 auto parts suppliers operate in China. Nearly 1,200 foreign or joint-venture companies produce auto parts here. However, China's spare parts industry has yet to be fully regulated. To compete with global giants like Bosch, Delphi, Magna, and Valeo, local companies must focus on developing their own products and building real capabilities. Experts suggest that small-scale companies should concentrate on a few core products, aiming for precision and quality, while larger firms can expand their product lines with appropriate investment. But they must avoid engaging in R&D without proper technical or financial support. Without real strength, companies risk being eliminated. Currently, this situation is slowly changing. With the improvement of China's intellectual property protection system, companies that once relied on imitation are finding it harder to grow. Some forward-thinking companies are beginning to invest in R&D. For example, about 50% of auto parts companies in Guangzhou have established R&D centers, and some, like Huanan Rubber Tire and Yangzhou Yapu Auto Parts, have significantly increased their R&D budgets. From "small and precise" to "big and comprehensive," companies have various paths to success. Experts recommend that auto parts companies tailor their strategies based on their actual situations and find development models that suit them best. In the current industry landscape, three main development models exist: one is centralized dependency, like those under the Auto Group and FAW-Fuyang; another is independent development, as seen with Wanxiang Group; and the third is merger-based growth, as exemplified by Hunan Torch. Each model has its own advantages and challenges. Cultivating leading companies is crucial for the growth of the auto parts industry. Recently, several Chinese auto parts companies have reported strong performance. Fuyao Glass saw a 41.9% increase in net profit, while Ningbo Huaxiang expects a 300% rise in Q3 profits. These results show that as companies grow stronger, they can achieve profitability. However, only a few leaders are not enough for the vast automotive market. Globally successful auto parts companies, like Delphi, Bosch, Denso, and Aisin Seiki, have grown alongside their parent vehicle manufacturers. In China, similar support from domestic automakers is essential for the development of local parts companies. As one expert noted, "How can low-quality parts assemble high-grade cars?" Taking the road of large-scale development and cultivating leading enterprises is a necessary stage for industry growth. Government support plays a vital role. South Korea, for instance, has invested heavily in its auto parts industry, providing funds for R&D centers, training, and technology development. China still has a long way to go in this regard. He Desheng, an expert in rockets and automobiles, suggests that China could establish a national technology development team to integrate domestic resources. While challenging, this approach could be highly beneficial. If Chinese auto parts companies can achieve low cost and high quality, they may one day become the "heart" of joint-venture vehicles.

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