Changes in Production and Sales of Parts Promote the Growth of the Automotive Industry

In the earliest period, the production of automobile parts was subordinate to the automobile manufacturing, which was used for the complete vehicle and complete machine production support (also called: OEM supply and spare parts for the vehicle), and also used for the maintenance of social vehicles. Some auto parts production companies are wholly owned subsidiaries subordinated to automobile production companies, some are attached to auto manufacturers' preferred or tender fixed-point supporting plants (also known as: satellite plants, cooperative plants), and some are suitable for various types of vehicles. Variety demand for a large number of professional auto parts production plant. Regardless of which type of auto parts business is mentioned above, it is organized according to the needs of the entire vehicle, complete machine production support, or social vehicle maintenance needs.

In the period of planned economy, the competent department of the industry clearly approves the parts and components factory affiliated to the automobile production enterprise. In each annual automobile production plan, a certain amount of social vehicle maintenance parts (also called: vulnerable automobile parts) must be arranged. Ensure that the needs of automotive users; that is, auto parts and auto parts used in vehicle maintenance, as long as the vehicle model meets the technical conditions, in accordance with production procedures to achieve qualified auto parts, can produce marketing.

However, since entering the market economy, especially in Sino-foreign joint ventures, foreign parties have tried every means to control various aspects in order to obtain more benefits, such as procurement of auto parts for OEM procurement of auto parts and components, approval of auto parts suppliers, and even special maintenance of auto brands. The automobile repair parts used in the factory will use a variety of “reasons” to say things, calling them “original parts”, and the auto parts dealers in the society will use “×× brand accessories”, “factory parts”, and “complementary parts”. In the competition, some departments also boosted their names with “genuine projects”, and the term “deputy factory parts” also appeared in the market. Strictly speaking, there are differences between OEM and social maintenance parts. The former is for the assembly of whole vehicles and complete machines, while the latter is for maintenance of whole vehicles and complete machines, but it is the same in terms of model types and technical conditions. There will be some differences in the quality level, but it will not affect the daily use or cause serious consequences, let alone equal to counterfeiting.

With the emergence of various forms of marketing, auto parts marketing has also undergone five historical changes. First, it has changed from traditional unified purchasing and underwriting to flexible open marketing. Second, from a single planning arrangement, distribution channels to production and marketing authority. Decentralization and multi-channel market circulation changes. The third is from independent production and sellers’ promotion to on-demand production and buyer-side purchase. The fourth is from the intangible market of national auto parts ordering conferences to the tangible markets of national, regional and corporate auto parts trading activities. The fifth is the transition from extensive-type booth management to lean-type team integrity management.

At the same time, the management system for the production and sales of auto parts has also evolved from the highly centralized management model of the past departments (regions) to the current management models of auto parts manufacturers, auto parts dealers, and auto parts markets. During the planned economy period, the Ministry of Communications implemented nationwide direct management before the early 1960s; in the mid-1960s, the entire country’s auto parts companies and affiliated companies’ 157 outlets under the jurisdiction of the Ministry of Communications were all handed over to the First Machinery. China National Automotive Industry Corporation of the Ministry of Industry implemented centralized national management; in the 1970s, when the state further reformed the industrial management system, it was decentralized to local management, and the Department of Materials implemented a nationwide unified order to allocate supply resources; at the end of the 1970s. The country adopts the policy of reform and opening up. Auto parts manufacturers have established and expanded the self-selling rights. The auto parts distribution system has formed the pattern of coexistence of the three channels of the Ministry of Materials, China National Automotive Industry Corporation and auto parts manufacturers; since the 1990s , Further evolving the establishment of auto parts street, auto parts market and auto parts global procurement port has become a tangible market for auto parts marketing under the market economy system.

Undoubtedly, it is the historical changes in the production, sales and management of auto parts that have contributed to the rapid growth and development of the entire automotive industry. From the past, commercial vehicles dominated the rise of passenger cars, modified cars, and specialty cars. Nowadays, the demand for commercial vehicles and passenger vehicles is strong, and new models, whether joint venture brands or self-owned brands, are launched every year for dozens. Even hundreds of them greatly enriched the product market. This fully shows that apart from the increase in market competitiveness in the development and development of automakers, production capacity expansion, and marketing services, an important and indispensable factor is the abundance of market resources for auto parts. There is more room for selection of accessories for car and engine production and maintenance. This has become the industry consensus.

(The author of this column is Secretary General of China Automobile Industry Advisory Committee)

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