Despite the sluggish global auto market and the decline in net profit of auto enterprises since this year, the enthusiasm of multinational parts giants to invest in China market is still overwhelming.
On September 7, visiting German Chancellor Angela Merkel attended the launching ceremony of the new factory in Wuhan. Previously, the future cockpit (Shanghai) technology center of Bosch Group's automotive multimedia business division was just opened in Pudong. Almost at the same time, the parts factory invested by Japanese Denso in China has started. Honeywell, one of the world's top 500 enterprises, has set its global R & D Center for auto parts in Shanghai. Toyota Motor Company signed a package of technical cooperation agreements with BYD, Ningde times and other Chinese enterprises to jointly develop new energy auto parts...
"While the auto market has not recovered and the performance is not ideal, the multinational auto parts giants are still in the Chinese market. On the one hand, it reflects the long-term investment strategy of these multinational companies, on the other hand, it also shows that the Chinese market still has huge potential." Liu Rui, professor and doctoral supervisor of the school of Applied Economics of Renmin University of China, said in an interview with China Automotive News.
Go against the wind and show long-term strategy
The world economy is slowing down, manufacturing industry is falling again, and the "cold current" of the car market is sweeping the world... Since the beginning of this year, the auto sales in the three major auto markets of Europe, the United States and China have declined to varying degrees, and it is difficult for multinational parts giants to be independent.
According to the European Automobile Manufacturers Association, in the first half of 2019, the number of new car registrations in Europe was 8.2 million, down 3.1% year on year. Statistics from the United States show that in the first half of this year, cumulative sales of light vehicles in the United States fell 2.3% year on year. According to data released by China Automobile Industry Association, in the first half of 2019, China's auto sales volume was 12.323 million, down 12.4% year on year. Meanwhile, the passenger vehicle market in India continued to decline in the first half of this year, with its cumulative sales volume falling by 10.2% year-on-year.
The "cold current" of the automobile industry quickly spread to the upstream parts industry. According to the semi annual report of multinational companies, in the first half of this year, Japan's electricity installation profit was about 8.812 billion yuan, down nearly 25% year-on-year; the profit announced by Valeo was 573 million US dollars (about 4 billion yuan), down 32% year-on-year; the net profit of anbofu was 514 million US dollars (about 3.6 billion yuan), down 14% year-on-year; the net profit of bogwarner was 332 million US dollars (about 23 million yuan Billion yuan), a year-on-year decrease of 33%.
The auto market has been falling, and the multinational parts giants have begun to reduce the annual plan, or even reduce the number of employees to "lose weight for the winter". Even at this moment, multinational parts giants will still pay attention to the Chinese market, increase investment, continue to increase capital, and lay out R & D centers and manufacturing bases.
As one of the multinational parts giants, Bosch Group has been rooted in the Chinese market since the 1980s. In 2018, Bosch group provided 48 million sensors for China's automobile market alone. The total sales volume of parts business in China reached 112.6 billion yuan, a year-on-year increase of 2.5%, accounting for 18% of the global sales volume of Bosch group. The new investment of Bosch Group in China reached 7.8 billion yuan, a year-on-year increase of nearly 22%.
In March this year, the first Bosch second generation intelligent booster (the latest generation of brake booster products) production base of Bosch Group in Asia Pacific region was officially opened in Nanjing, which is one of the three manufacturing bases of Bosch Group in Germany, China and Mexico. With a total construction area of 22400 square meters and a total investment of 770 million yuan, the supply and marketing network covers the whole Asia, including China, Japan, Southeast Asia and other regions. The first production line of the production base has an annual production capacity of about 1.5 million sets, and the second production line will be opened at the beginning of 2020. It is expected that by 2021, Nanjing factory will become the world's largest second generation intelligent booster production base of Bosch group. According to the plan of Bosch group, Bosch Group will establish a new Bosch software center in China this year. In the future, the center will provide high-quality software support for all business segments of Bosch Group in China, including embedded software, cloud based digital software and application programs based on artificial intelligence. It is estimated that the initial grant amount of the center will exceed RMB 35 million by 2020.
Cummins, a century old store in China since 1979, has shipped 1.5 million units in 2018, among which 500000 units in China exceeded the U.S. market for the first time. The U.S. company said it will invest 150 million yuan in Wuhan in 2019, triple the scale of Cummins China R & D center, introduce new energy, compressed natural gas, fuel cell and other engine technology research and development, and meet the market demand of Chinese automobile manufacturers in diesel, compressed natural gas, electric, hybrid, fuel cell and other power. As a result, Cummins forecasts that sales revenue in 2019 will increase by 4% over last year.