China's auto parts market is rising

28/08/2013 10:50

 According to the relevant industry analyst reports, China's third and fourth-tier cities are very enthusiastic of buying the car, automobile consumption seems to have become “rigid demand" and therefore, automotive investors have a broader space. With the introduction of the new car "Warranty Act" will be implemented, and it will enhance the parts enterprises threshold and the edge parts enterprises have many opportunities with overseas M & A integration. With these advantages, it is meaning that domestic auto parts enterprises with good situation.

The "Warranty Act" will be officially implemented this year on October 1st. This regulation has a clear requirement on parts made, and there are no flexibility requirements. Obviously, the stringent requirements for parts and components and car security system are bound to have a profound impact on the industry. Of course, this is good for preventing the counterfeit from reaping market shares, and the excellent quality of the business is good, it will help parts listed companies to obtain spare orders and to maintain gross margins, to achieve strong Always the Winner.

It is a great challenge for the enterprises which is has a gap for technical level, the ability to control the quality to the original pieces. Therefore, if you want to gain market share, you must comply with the relevant standards. And it will inevitably make the relevant enterprises in the internal management, product technology and quality has improved, or that have no ability or fake-oriented enterprises which will be eliminated, so that industrial optimization integration, bring us a healthy and orderly market.

Chinese parts industry is still very fragmented, on how to get rid of the homogenization of competition, to achieve higher quality production, moving to the upper end of the value chain is a key industry to achieve healthy growth. The acquisition includes the acquisition of overseas assets, but also the future of the industry to achieve transformation and upgrading one of the shortcuts.

Since the 2008 economic crisis does not have periodic, so the future is difficult to predict the economic turmoil, the global M & A market is large, Europe and some parts due to the recent bankruptcy, some market share was let out, Chinese parts companies will fill the vacated market share. Through mergers and acquisitions, which undoubtedly will be stationed in parts company more profitable market. Now, auto parts raw materials such as auto repair tools, car decoration, rubber, steel, etc., prices continued to decline, will alleviate cost pressures, increase profitability, auto Parts Company will also constitute a new good. Overall, the parts market integrity prices rise.