In the automotive industry, there is a saying that if the parts are strong, the automobile industry will be strong; if the parts are weak, the automobile industry will be weak. The auto parts industry is a very important part of the automotive industry chain. In the value chain of the global auto industry, auto parts value has accounted for 50% of the total value. However, one of the most heart-rending facts is that China's auto parts and components industry is still very fragile after China's leap into a global production and sales country.

Since the reform and opening up, China's auto parts industry has developed rapidly. The relevant data show that in 2010, the annual production value reached 1.6 trillion yuan. At present, there are about 30,000 auto parts enterprises in the country, and it is already available to provide more than 18 million cars, more than 24 million motorcycles, and more than 70 million cars and more than 110 million motorcycles for the society. Maintenance service capabilities. However, an unavoidable reality is that China's parts and components companies are not only small in scale, but have low industry concentration, and most of them rely on low-price and vicious competition, leading to disorderly markets and inability to raise industrial standards.

It is understood that recently, "Automotive News" announced the top 100 auto parts suppliers in 2010, with 30 companies, 28 companies, and 17 companies in the United States, Japan and Germany respectively, accounting for 75% of the total. The other 25 countries are divided by 10 countries including France, South Korea, Canada and Sweden. Among them, South Korean companies are the most eye-catching, and there are already four companies in the list. As China, the world’s largest auto market, there is no auto parts company.

According to data from the Ministry of Commerce, foreign investment currently controls most of the market share of auto parts. Domestic sales of parts and components only account for 20% to 25% of the total industry. Auto parts manufacturers with foreign backgrounds account for the entire industry. More than 75% of these foreign-funded suppliers, 55% are wholly-owned enterprises, 45% are Chinese-foreign joint ventures, and local parts and components are mainly supported by self-owned brands, which has a low market share. Especially in high-tech areas such as automotive electronics and engine parts, the foreign market share is as high as 90%, among which the output of key components such as automotive EFI systems, engine management systems, ABS and airbags, and automatic transmissions, etc. The proportions were 100%, 100%, 91%, and 69% respectively.

Regarding the embarrassing situation of China's auto parts market, some industry insiders have analyzed that the current domestic parts and components companies are not strong, and the competition between them is fierce. In addition, the international competitors are pressing harder and harder, and the living environment is very difficult. The development time of Chinese auto parts enterprises is shorter than that of whole vehicle companies. Both the technical details and talent reserves are significantly different from those of international parts and components companies. Therefore, it is difficult to catch up with competitors in the short term. Moreover, with the popularization of electronic technology in the auto parts field, the gap between domestic and international companies has further widened.

Another important issue affecting the development of China's auto parts industry is that China’s spare parts companies’ past cost advantages are gradually weakening. China’s inflationary situation has increased, financial costs have risen, employees’ wages have risen, rent prices have risen, and logistic costs have risen. In addition, the direct reflection of the inability of domestic companies to grasp the core component technologies is that domestic auto parts prices are much higher than those of foreign countries. Therefore, the cost issue has also become a major impediment to the development of China's auto parts industry.