Five of the world’s top 20 auto companies are in China, but only one of the world’s top 20 auto parts companies is in China. China’s parts and components enterprises should have great potential for development, however, the overall growth of the automotive industry deceleration, profit narrowing, and product structural adjustment, for China’s parts and components enterprises added multiple pressures. How can Chinese parts enterprises change lanes to overtake in the process of track switching?
Digital transformation: from follower to first mover
Chinese auto parts enterprises need to re-examine the value of digital transformation, develop a digital transformation roadmap, establish a business value-oriented digital operation system, and change the management structure, thinking and ability.
Industrial chain cooperation: from manufacturing collaboration to ecological alliance
In the era of intelligence, the product development model needs to be adjusted, auto parts companies need to focus on product technology research and development and end users and other links, in-depth communication with the OEM, as soon as possible to intervene in the early stage of research and development to shorten the response time; Fully share user and product data to jointly respond to rapidly changing market demands and technology trends. At the same time, parts companies can establish a variety of partnerships to create an industrial chain ecosystem on the basis of clear positioning.
Post-acquisition integration: from active buyer to true owner
In the past 10 years, after the merger and acquisition of Chinese auto parts companies, they usually maintain the independence of the operation of the target company, mainly through the board of directors to manage it, and rarely involve substantive integration. According to the degree and speed of integration, substantive post-merger integration can be divided into the following three modes: selective integration, progressive integration and full integration.
With the acceleration of the trend of new energy and intelligence in the automotive industry, the purpose of mergers and acquisitions of Chinese parts companies is no longer simple overseas expansion and business expansion. How to make full use of the acquired enterprises, especially overseas enterprises in technology, talent, research and development and business innovation capabilities, combined with the huge domestic market space, as well as the company’s own in-depth insight into the Chinese market, through integration to effectively achieve the enterprise’s overall ability incubation and transformation acceleration, to achieve 1+1>2, it is worth thinking about Chinese parts enterprises. However, given the superior stage of M&A integration capabilities of Chinese companies, as well as the challenges in cross-cultural and cross-regional environments, we believe that the effect of gradual integration may be slightly better.
Post time: Jun-27-2023
