Get Adobe Flash player

News Center

About Chongqing

Contact Us

On June 7th, the first day of the 2017 Global Automotive Forum, participants brainstormed the strategies for profitable growth in a maturing market from the perspective of an auto parts supplier.

President of Light Vehicle Driveline Technologies Dana Incorporated, Bob Pyle; President of Delphi China, Simon Yang; and President of Valeo China, Edouard de Pirey participated in this discussion. Ashvin Chotai, Managing Director, Intelligence Automotive Asia, hosted the forum discussion.

The slow-down in production growth of China’s auto industry, overcapacity concerns and shrinking profits are all putting pressure on auto parts suppliers. Suppliers are also in an environment where they are required to make significant investments in new technology to meet the demand of customers, markets, and regulations.

 

 

Under the new market environment, to the international suppliers that dominate China’s auto parts industry at the Tier 1 city level, what technical challenges currently affect them as they gain a foothold in the overall market? How will the Chinese auto market develop in the future? How will the relationship between the OEMs and suppliers change?

In 2016, Dana, Delphi and Valeo have contributed to 10% growth in China’s market. At the forum, three representatives from each of the companies expressed their views.

 

50 Years of Development in 5 Years’ Time

Participants admitted that auto parts suppliers are facing huge changes and challenges under the rapid development of China's auto market.

Simon Yang said that the current changes in China's auto market in addition to the many changes facing auto-parts companies, show that the industry is seeing rapid and complex changes. To keep up with the speed of change, if suppliers aren’t willing to take new countermeasures, some suppliers will face the danger of being eliminated. Yang mentioned, "The changes in the past five years has surpassed that of past 50 years in China’s auto market, which has become the world's largest mature market. China's consumer demand for automotive electronics, electric vehicles and internet-connected auto technology, are far ahead of the demand of the rest of the world. China's energy-saving regulations, the automotive industry regulations are constantly improving and upgrading. Moreover, the Chinese auto industry participants are not limited to the OEMs, pure electric vehicle manufacturers and internet companies have joined the research and development and manufacturing process. Autonomous driving, big data collection and automotive vehicle communication technologies are undergoing rapid changes. In conclusion, all these phenomena represent the rapid changes in China’s automotive industry. "

Mr. Pirey believes that China's auto industry is facing three major revolutions: electrification, autonomous driving and new services.

Bob Pyle believes that, "Although the production of cars has declined in some regions since 2009, China's car production is still increasing." Thus, auto parts suppliers should re-evaluate the problem of overcapacity, because it is related to the global parts allocation. Meanwhile, overcapacity also affects the risks of inventory.

 

Investments, the Key to Winning in the Future

In the face of rapid changes in the auto market, the participants demonstrated that, "transition is imperative.”

Delphi has transformed in many ways to get ready for the big changes in the Chinese auto industry, according to the introduction of Simon Yang. First, Delphi continues to promote business growth with investment. It has invested much on security, environmental protection and internet connectivity. At the same time, it continues to expand cooperation with industry leaders such as internet and advanced autonomous driving companies. In short, Delphi is investing heavily in software, data services and large-scale acquisitions. Second, Delphi has also made a big transformation in terms of minimizing production costs such as continuously optimizing and adjusting the scale of the production base in accordance with the demands of the customers. In addition, Delphi also increased the usage of automated production and machines, which has greatly improved the production efficiency, and has alleviated labor costs and reduced the pressure on the cost of production.

Simon Yang said, “Due to the constant innovation under the new environment, Delphi has achieved an increase in its performance and attracted more customers.”

Mr. Pirey said: “The future world needs Chinese innovation.” The Chinese market is more willing to try new technologies than others. Mr. Pirey frankly said that owing to the focus on the Chinese market, Valeo can enjoy global growth in the depressed market. He said: “China is the world's largest market, which represents 50% of the world's economic growth. China’s auto market has plenty of room for growth.”

 

11 % of Valeo’s OEM revenues are invested in technology R&D, said Mr. Pirey. It also has a lot of patents and 3,000 engineers in China. He also said, "In addition, China is also full of innovation. There is no doubt that the future of the auto industry relies on the invention and innovation of China's auto industry. This is one of the reason why we invest heavily in China's market."

 

Documentary of GAF2016