At the “2003 annual meeting of the parts industry” sponsored by the China Automobile Association not long ago, a person in charge of a seal company spoke bluntly, and the main core of the topic was how to reduce the negative impact of the price of the entire vehicle plant on them. Since then, seal companies have signed "industry self-regulation" clauses under the leadership of industry associations. "Non-vicious competition, not to push down each other's price", these terms can be seen to some extent as the "offensive and defensive alliance" that seal companies have established for vehicle manufacturers.

"If you follow the requirements of the automaker, companies simply can't make profits. What opportunities do you have to survive?" League companies all think so.

It is understood that in 2003, the price of plastics, the main raw material for seals, rose rapidly, resulting in a 4% to 6% increase in corporate costs. Because of fierce competition in the market, vehicle manufacturers have become commonplace prices. To ensure its own profit, OEMs are required to reduce their prices by 1% to 10% each year.

A few days ago, OEMs have issued a "double regulation" notice to the upstream parts and components companies: Parts companies are required to reduce their prices to the specified range within a specified period of time. If the upstream manufacturers refuse to implement, the vehicle manufacturer will cancel its supporting qualifications. In 2003, the price for the seal industry was particularly severe, with the highest price cuts reaching 10% to 15%. "Our general profit is between 5% and 10%. If the internal management controls are in place, we can save about 5%. Now that the price of raw materials has risen and the automaker has lowered the price requirement, serious overdrafts have already occurred." A seal Business executives complain.

In fact, the problems encountered by parts and components companies are far more than these. Under the dual pressure of rising raw material prices and price cuts by automakers, domestic parts and components companies are struggling. One of the magic weapons of reducing the cost of parts and components industry is to form a large-scale economic scale. However, the fragmented matching market has seen parts and components companies become bigger and stronger. When the vehicle market is profitable, it can still conceal the structural defects in the parts and components market, but when the vehicle market is in a fiercely competitive period, as it is now, the pressure of squeezed profits and moisture is transmitted to the parts companies, and the inborn market Structural problems began to be exposed.

Another innate structural problem in most parts and components companies in China is the low organizational effectiveness. Basically, manufacturers are in a state of disorderly competition. At the same time, China's auto parts industry is still a labor-intensive industry. Although China has abundant cheap labor resources, the labor productivity of Chinese auto parts companies is only one-eighth that of Japanese parts companies. In addition, no matter whether it is the purchase of raw materials, the process control of work in progress, or the sale, circulation, and service of finished products, Chinese auto parts companies have not yet formed large-scale cost advantages, coupled with irrational product structure, and many parts and components companies. There is a serious excess of production capacity, a large number of assets are idle, and fixed costs increase; or because some enterprises, under the protection of certain interest groups for a long time, have high costs and lack market competitiveness.

The difficult problem now is that a large number of private enterprises such as Wanxiang Group have come to the fore, but how can more countries that have invested heavily in capital be able to move toward a virtuous circle without protection? The princely separatist industrial structure and the Chinese and foreign "neopsis" How does the supporting pattern break through? How does the KD surge after China's accession to the WTO respond? It seems that the future of China's spare parts industry depends not only on the company's own struggle, but also on the government's effective macro guidance, from Japan and South Korea. The road to development that year, as well as the successful experiences of emerging countries and regions, can be used for reference.



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