[Huicong Auto Parts Network News] In the spirit of WTO's openness and sharing, it is the general trend to liberalize the share ratio of joint venture vehicle companies. The State Council issued the "Decision on Temporarily Adjusting Relevant Administrative Regulations, State Council Documents, and Departmental Rules and Regulations Approved by the State Council in the Pilot Free Trade Zone" (referred to as the "Decision"). The release of the "Decision" is a major signal, and it is inevitable to liberalize the share ratio of core components. Put the key components of automotive electronics and new energy vehicles on the pilot list so that outstanding Chinese brands have sufficient competitiveness to compete with multinational brands.

 

　　 Pilot projects in related fields allow wholly foreign investment

 

　　 On July 19, the State Council issued the "Decision on Temporarily Adjusting Relevant Administrative Regulations, State Council Documents, and Departmental Rules and Regulations Approved by the State Council in the Pilot Free Trade Zone" (the "Decision").

 

　　 The "Decision" proposes that my country will further open up a number of industries and allow foreign businessmen to establish wholly-owned enterprises in the corresponding fields in the free trade zone. Among them, the adjustments related to the auto parts industry include, in the Shanghai, Guangdong, Tianjin, and Fujian Free Trade Pilot Zones, foreign investors are allowed to engage in wholly-owned automotive electronic bus network technology ("CAN bus") and electronic control of electric power steering systems. The manufacturing and research and development of the electric device (referred to as "EPS controller"); foreign businessmen are allowed to engage in the manufacturing of energy-type power batteries (energy density ≥110Wh/kg, cycle life ≥2,000 times) in the form of sole proprietorship.

 

　　Relevant industry experts said that the pilot free trade zone for the sole proprietorship of the production of core auto parts will prepare for the liberalization of vehicle joint ventures. At the same time, including automotive electronics and key components of new energy vehicles on the pilot list, and recent discussions on the gradual lifting of the ban on auto joint venture shareholding have been heating up, which means that free competition in the Chinese auto industry market will become a trend.

 

　　CAN bus: independent brand enterprises have certain competitiveness

 

　　 It is reported that the CAN bus was first developed by Bosch, and it is now a concept, and the vehicle manufacturer independently develops it on the platform according to certain standards. As the largest auto parts group at present, Bosch is involved in many automotive business fields, and CAN bus and EPS controllers are its strengths.

 

　　 At present, most passenger car companies have their own CAN bus. With the development of smart cars, CAN bus will inevitably become a must for all smart cars. Domestic vehicle companies have become more mature in the application of CAN bus. The CAN bus is led by vehicle companies to establish a corresponding electronic and electronic control architecture and set its own unique standards in accordance with international standards.

 

　　 CAN bus, Ethernet and EPS controllers, these key automotive electronics technologies have been mastered by a considerable number of automotive electronics companies in China, but vehicle companies still have prejudices on the technology research and development capabilities of independent components. Relevant experts believe that the state should encourage and support more independent parts companies with innovative capabilities, so that the comprehensive competitiveness of independent brand parts companies can be improved. At present, independent brand enterprises have certain competitiveness in the fields of navigation, entertainment, and in-vehicle communication.

 

　　EPS controller: foreign capital is the main source of independence, there is a gap

 

　　 At present, the core technology of EPS controller is basically in the hands of foreign companies, such as JTEKT, ZF, NSK, Showa, Bosch, etc.

 

An industry person who has been engaged in EPS business for many years also said that most domestic EPS controllers are mainly imported. Continental Electronics, Omron, ELESYS and JTEKT all have joint ventures in China, of which JTEKT’s EPS business accounts for approximately 11% of the Chinese market. Domestic self-owned brand companies include Zhuzhou Elida, Zhejiang Shibao, Hubei Henglong, etc. These companies also independently develop and produce EPS controllers, which have a certain level of technology compared with foreign capital; Shanghai Lianchuang Automotive Electronics, a subsidiary of Huayu Automobile, also develops It produces EPS controllers, which are installed in SAIC and other self-owned brand models.

 

　　Related experts said that in the next 5 to 10 years, in the field of EPS controllers, independent brand companies will also have market competitiveness. Although from a technical point of view, the gap between independent enterprises and foreign capital is not large, there is still a certain gap in process, equipment capabilities and product consistency compared with foreign capital. In addition, self-owned brand companies have no brand advantage.

 

Regarding the impact of the pilot sole proprietorship in the free trade zone on independent brand companies, relevant experts believe that the pilot free trade zone alone will not have a great impact on independent brand companies, but from the perspective of the development of parts and components companies, the market is fair. important. Experts in the industry said that after the implementation of the sole proprietorship policy, it will be more difficult for local companies to master core technologies in these areas, which will make the positioning of domestic and foreign automotive electronics product lines more distinct. The monopoly of international companies on the upstream industry may be The Chinese automotive electronics industry has been hovering in the middle and lower reaches of the industrial chain.

 

　　 Power battery: foreign investors are eyeing their eyes and may be affected by their independence

 

　　 At present, the development of domestic new energy vehicles is in full swing, and the power battery as its key component has also attracted coveted by all parties. Public information shows that the Ministry of Industry and Information Technology has published four batches of "Automotive Power Battery Industry Standard Conditions" catalogues, including Tianjin Lishen Battery Co., Ltd., Hefei Guoxuan High-Tech Power Energy Co., Ltd., and Duo Fluoride (Jiaozuo) New Energy Technology Co., Ltd. 57 companies including Weihong Power System (Huzhou) Co., Ltd.

 

　　 In addition, foreign companies such as LG Chem, Samsung SDI, and Panasonic are also actively deploying in China. They have established joint venture factories in Nanjing, Xi'an, and Dalian, but no foreign power battery company can enter the above catalog. There are also rumors that Bosch is also "just about to move" on power batteries and will build a factory in Qingdao, China.

 

　　Related industry experts said that at present, domestic power battery companies can basically meet the requirements of energy density ≥110Wh/kg and cycle life ≥2,000 times. Although the ternary lithium battery has a slightly poor cycle life, it has a high energy density. In addition, my country is combining graphene materials with ternary lithium. By then, the driving range, energy density and cycle life of power batteries will be greatly improved. Therefore, the power battery industrialization capacity has gradually accelerated in the past two years, but there is still a certain gap compared with foreign-funded enterprises, and it takes 3 to 5 years to give priority to development.

 

　　 Industry insiders generally believe that the "Decision" has a relatively large impact on the power battery market.

 

　　Relevant experts believe that the first pilot in the free trade zone means that it may be liberalized nationwide in the future. Although the technological level of power batteries is not far behind, most independent battery companies are in the growth stage and still need 2 to 3 years of cultivation. At present, foreign-funded enterprises have been "eyes up" on China's power battery market. Once liberalized, the market will lose more market share than acquired technology in the short term. If after the liberalization, foreign capital enters the power battery access catalog, the subsidy dividend for supporting independent brands will be gone.

 

　　 It is the general trend to liberalize the share ratio of core components

 

　　 Allowing wholly foreign-owned investment in key components such as automotive electronics and power batteries in the free trade zone has opened the curtain for the further opening of the automotive industry.

 

Then, after the liberalization of the stock ratio, the auto industry will really usher in a scourge. Will self-owned brand cars suffer a "crash"? Experts believe that this is just an important excuse for the "conservatives". So terrible, but it will bring opportunities.

 

　　 The "Automotive Industry Policy" formulated in 1994 stipulated that the Chinese shareholding ratio of engine Sino-foreign joint ventures should not be less than 50%, but this content was deleted in the "Auto Industry Development Policy" revised in 2004. More than 10 years later, Cummins, the world's largest independent engine company, has established five complete machine production bases in China, all of which are joint ventures, and have not adopted a sole proprietorship. Therefore, after the liberalization of the shareholding ratio, it is very unlikely that the current joint venture will be converted to a wholly foreign-owned enterprise immediately.

 

Let’s look at the auto parts companies of self-owned brands that do not have shareholding protection. Under the chase of foreign parts companies, some outstanding companies have not only succeeded in entering the supporting system of vehicle multinational companies, but also have become the forefront of the world through mergers and reorganizations. Yanfeng, Yapp, Joyson Electronics, Longcheng Precision Forging, Fuyao Glass, etc.