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Chinese components are falling into a vicious circle of "four lows".

Jul 07,2022

"Chinese auto parts enterprises have cost advantages and technology at the same time. Without technology, only relying on cost will not achieve long-term development."
At present, Chinese parts enterprises are falling into a vicious circle of "low technology content - low profit margin - low R & D expenses - low technology content". How to break through has become the most urgent problem for domestic parts enterprises. Implementing overseas mergers and acquisitions to obtain technology, or relying on low-cost advantages to develop overseas markets, these seem to be two shortcuts for domestic auto parts enterprises to break through. However, the reality is that these two shortcuts are not smooth roads. If parts enterprises want to develop through these two ways, they still need to spend a lot of time and pay more tuition fees.
Ni Wei, vice president of global sales and marketing of ASIMCO group, is responsible for the coordination and management of global sales and marketing of ASIMCO group. Before joining ASIMCO group, he worked for Mercedes Benz for 4 years, served as a maintenance engineer and trainer, and served as a manufacturing and product manager for general motors for 4 years. As a member of the preparatory group at that time, he was responsible for preparing to build GM Guangzhou car assembly plant.
When talking about the current development of domestic auto parts enterprises, he said that Chinese auto parts enterprises have cost advantages and technology at the same time. Without technology, only relying on cost can not achieve long-term development. He said: "whether state-owned enterprises or national enterprises, they should first become stronger and then become bigger, and bigger is not necessarily the ultimate goal of enterprises."
He believes that overseas mergers and acquisitions and expansion of overseas markets are the way out for the development of domestic auto parts enterprises, but to take these two ways, we must understand the overseas cultural background. The cultural background of China is very different from that of foreign countries, which leads to the different perspectives and methods of foreigners and Chinese people. If they do not understand each other's cultural background, it is very likely to cause contradictions. In M & A negotiations, it is not uncommon for negotiations to break down due to their different cultural backgrounds. He gave a simple and vivid example: for example, two people look at a cylinder from different angles. One person looks down from above and sees a circle. The other person looks sideways from the horizontal and sees a rectangle. The two people got totally opposite views. In fact, neither of them was wrong, but they looked at it from different angles.

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