As the leading auto parts manufacturer in China, Wanxiang Qianchao is struggling to get out of the quagmire in 2008.

At present, the state has clearly defined the “industry development policies that encourage and foster a group of parts and components companies with comparative advantages to achieve large-scale production and enter the global auto parts procurement system and actively participate in international competition”. Will accelerate, will bring more new opportunities to the powerful parts and components companies. In addition, the rapid development of self-owned brand automobiles and the increase in the localization rate and localization rate of joint-venture brands will provide more room for development for domestic parts and components companies, especially ethnic enterprises.

“This is a good news.” On February 11th, the internal manager of Wanxiang Qianchao told reporters that “it helps obviously for the company to expand its business areas in the next step and our road will go wider and wider”.

Worrying performance decline

Since the second half of 2008, affected by the global financial crisis, the global vehicle sales market has rapidly declined. In 2008, the Chinese auto industry achieved sales of 9,381,000 vehicles, failing to complete the planned 10 million vehicles at the beginning of the year. For the first time in 10 years, sales growth dropped to the first place, at 6.7%.

Affected by this, auto parts and accessories companies have also felt "cold". In particular, the universal cash flow, its export revenue accounted for about 35% of total revenue.

According to the statistics of China Association of Automobile Manufacturers, in 19, the profits of 19 key auto companies showed a negative growth, and 82% of domestic auto companies did not complete the target plan for the beginning of the year. According to statistics on the completion of the annual plan for 45 passenger vehicles, a quarter of companies Not reaching 50% of the plan.

On February 11, 2009, General Motors announced on its official website that it will reduce the wages of its employees in 2009 and cut the total number of employees from the current 73,000 to 63,000. General Motors said that the decision was made due to the impact of global sales declines and company restructuring requirements. As the universal joint department that became the accessory product of General Motors in 1997, performance will be affected again.

However, it is undeniable that the universal money pool has assembled many automotive system components such as chassis and suspension systems, automotive brake systems, and automotive transmission systems. It is currently one of the largest professional auto parts production bases for independent automotive systems in China. The company's chassis business has the only modular chassis technology in the country and has high technical barriers.

The Future of "Three Threes System"

Compared with the vast majority of auto parts and accessories companies, the reversibility of Wanxiang Qianchao is relatively high, mainly due to the use of Wanxiang Qianchao chairman Lu Guanqiu to play the international card. When the national policy will continue to encourage auto parts companies to adopt various ways to “go global” and implement “transnational operations”, this will also create an external condition for better integrated international resource integration for the basic enterprises.

Universal cash flow may benefit from this. As early as 2006, the company set up a joint venture company with Japan Shuang Ri Co., Ltd. to establish a joint venture company with a registered capital of US$ 12.78 million, accounting for 75%. The two sides plan to develop the joint venture company into the world's largest rolling body product company with an annual revenue of nearly 1 billion yuan and a profit exceeding 100 million yuan in the coming years.

Lu Guanqiu said that the era was "forced to get to the top of Liangshan," and now Lu Guanqiu's international card is playing better. With the acceleration of global procurement by international automakers, through the parts supply agreements with Ford, GM, and Hyundai, in 2008, 5 million constant speed drive shafts were supplied to the US market and 80 years for South Korea. Thousands of constant speed drive shafts.

At the same time, Lu Guanqiu spent a period of four years initially forming a unique market structure system with three-thirds of the domestic support, social maintenance, and export sales. For different markets, different service networks have been established and strategic cooperation with domestic OEMs has been carried out according to the positioning of “zero-distance supply and service”. Through the improvement of product performance and quality, it has become a part of the international automobile famous brand enterprises. First-tier suppliers create stable downstream customer resources.

In addition, a nationwide regional distribution service center has been established. At present, Wanxiang has established about 5,000 terminal distribution outlets, and its marketing network has radiated to large, medium, and small cities throughout the country, providing timely and high-quality services to end customers.

Due to the low entry barriers in the domestic auto parts market, competition is fierce. However, with the gradual implementation of a series of national industrial supporting policies, mergers and acquisitions or reorganization will become the future direction of universal money flow.

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