Car Stuff
Wen? |James
After the Chinese New Year holiday, the new coronavirus-induced pneumonia epidemic is still spreading. from February 10, there have been some provinces and cities of the enterprise resumed production, but there are still some enterprises are located in the more serious areas of the epidemic can not be resumed work.
At the same time, due to the epidemic serious labor shortage, even the resumption of business, the current production capacity is difficult to meet expectations.
And for the automobile manufacturing and parts manufacturing industry, can not resume work caused by the consequences of the current has gradually to the outside? Spread, from affecting the enterprise itself and the domestic industrial chain, to now affect the overseas industrial chain - several large overseas vehicle factories have been shut down one after another.
At present, the world's highest automobile production plant - Hyundai Ulsan plant has been shut down, in addition to South Korea within the territory of the Kia Motors plant, Renault and Samsung joint venture brand Renault Samsung plant has also been shut down.
Inside Japan, Nissan Motor's Kyushu plant also shut down production on February 14th, and at the same time, production will be suspended for two days on February 17th and 24th. Jaguar Land Rover and Fiat Chrysler (FCA) also warned that parts supplies are now so tight that they stand almost on the brink of shutdown.
The shutdown of some overseas OEMs shows that the impact of China's outbreak on the automotive manufacturing industry continues to fester, and the effect on the industry is becoming more apparent by the day. At the same time, from another side can be seen, China's auto parts suppliers globalization progress continues to accelerate, and the importance of the growing.
One, South Korea into a production shutdown disaster area? Hyundai Kia Renault have been hit
Because of the new crown virus epidemic, there have been a number of overseas automakers shut down or face the danger of shutting down at present, the world's highest automobile production plant - Hyundai Ulsan plant has been shut down, in addition to South Korea, there are Kia Motors plant, Renault and Samsung's joint venture brand Renault Samsung factory has also been shut down.
1, Hyundai: shutdown of daily losses of 700 million, worse than Beijing Benz
Hyundai is the first car company outside of China to suspend production. on February 4, Hyundai announced that due to a shortage of parts from China, Hyundai Group will suspend production of cars in South Korea. Meanwhile, Kia will also slow down car production in South Korea.
Hyundai currently has seven factories in South Korea***, five of which are concentrated in Ulsan. Since Feb. 4, Hyundai's Ulsan plants have been slowing down production, and since Feb. 7, all five Hyundai Ulsan plants have been shut down.
It is understood that the five plants in Ulsan can reach an annual output of 1.4 million vehicles, which is the world's largest production of vehicle factories. As a result of this shutdown, the 25,000 workers at the Ulsan plant are currently on vacation, and a resumption date has not yet been set.
A spokesman for Hyundai's labor union said on Feb. 10 that suppliers located in China had resumed production in China on the same day, and that Hyundai's factories in South Korea would gradually resume production from Feb. 11-17 as well.
▲Hyundai cars parked at the port of Ulsan, South Korea, waiting to be exported
Hyundai said it was unable to supply parts to its South Korean factories in a timely manner due to a factory shutdown caused by a worker at a supply chain manufacturer diagnosed with a new coronavirus infection. Hyundai relies heavily on auto parts exported from China for its manufacturing process, so the shutdown of the Chinese supplier will have a big impact on Hyundai.
Hyundai Group's factories in South Korea have huge production capacity, and the annual output of its brands Hyundai and Kia at its South Korean factories accounts for about 40 percent of the group's total production.In 2019, Hyundai Group's annual production of Hyundai and Kia vehicles was 7.2 million units. Affected by the shutdown of the Korean plant, Hyundai Group may make up for the capacity of the Korean plant with production lines in Russia, Turkey, the Czech Republic and the United States.
Hyundai Group said the company is currently taking various remedial measures to minimize losses and also hopes to find alternative suppliers outside China as soon as possible.
The reason for the shutdown at the Hyundai plant is a shortage of automotive wiring harnesses, according to foreign news agency AFP. Wiring harnesses are a common part of various electronic devices, used to connect them. Although unassuming, wiring harnesses play an important role in automobiles.
A Hyundai Ulsan plant employee said, "It's very unfortunate that I can't go to work right now and have to accept a pay cut. This is very hard to bear."
The shutdown will have a huge impact on Hyundai. Analysts expect Hyundai to lose at least 600 billion won (about 3.52 billion yuan) if the plant is shut down for five days, equivalent to a daily loss of 700 million yuan, which is worse than the loss of 400 million yuan per day from the shutdown at the Mercedes-Benz plant in Beijing.
2, Kia Motors: Hyundai Kia, a family of relatives, cut off the supply of products are the same
Hyundai wiring harness shortages shut down production, will also affect the group's other brand Kia Motors. That's true, too, as Kia's plant in South Korea was shut down on February 10th.
A Kia Motors spokesman said Feb. 10 that Kia Motors suspended nearly all production at three South Korean factories, according to CNN, the foreign media network.
The Kia Motors spokesman said the three Kia factories in Sokhae-ri, Hwaseong and Gwangju have now been temporarily shut down due to problems with the supply of wiring harnesses from China. Kia's military vehicle production line in Gwangju is still in production and has not been shut down. The plant in Hwaseong resumed production on Feb. 11, and the other two regional plants will resume production on the 12th, a Kia spokesman said.
A Kia Motors spokesman said, "We are working hard to get supplies from the Chinese plants that have resumed production, as well as plants in Korea and Southeast Asia."
3. Renault: 4-day shutdown? Increased risk of sustained supply cuts?
Renault Motor and Samsung's joint venture brand Renault Samsung Motors has also stopped production, and the reason for the shutdown is also the wiring harness out of supply.
According to the foreign media South Korea "Joongang Ilbo" reported on February 6, due to the supply of wiring harness parts from China, located in Busan, South Korea, Renault Samsung RSM plant will be discontinued from February 11, the shutdown will last 2-3 days. However, due to the slow resumption of work by Chinese supply manufacturers, the plant's production can't return to normal immediately even if wiring harness products start to be supplied.
A Renault spokesman said on Feb. 7 that the shutdown would last four days, saying, "Because of Busan's special geographic location, plants located here are at greater risk of supply disruptions, and are currently the locations where supply disruptions are most frequent."
In addition, the spokesman said Renault and its alliance Nissan were working closely together to deal with the supply disruptions.
Two, Japan and Europe are not spared? A number of car companies are waiting in the wings
South Korea*** has three car companies that are currently shutting down, including Hyundai's Ulsan plant, which has the world's highest whole-vehicle output. Japanese car companies are also facing such problems, Nissan Motor's Kyushu plant will stop production on February 14th. Meanwhile, Jaguar Land Rover Cars and Fiat Chrysler (FCA) Corp. have warned that parts supplies are now so tight that they stand almost on the brink of shutting down production.
1, Nissan: three-day shutdown? affecting 3,000 cars
According to Japanese media outlet Nikkei Shimbun, the supply of parts from China is now so tight that Japanese companies are finding it difficult to source parts from China, so Japanese vehicle factories are also facing the possibility of shutdowns and production cuts.
Nissan's plant in Kyushu is currently experiencing a shortage of parts supply. on Feb. 10, a Nissan spokesman said that two production lines at the Kyushu plant would be shut down on Feb. 14, and that another production line, which mainly produces cars for export, would be shut down on Feb. 17 as well. In addition, the working hours on other non-shutdown days have been adjusted from 8 hours to 7 hours per shift, and the daily factory production time will be reduced by 2 hours. According to forecasts, the shutdown will affect the production and delivery of 3,000 Nissan vehicles.
Another media report said that in addition to the shutdown on Feb. 14 and Feb. 17, the Nissan Kyushu plant will also be shut down for one day on Feb. 24, with the shutdown extended. As a result of the shutdown at Nissan's Kyushu plant, the Kyushu plant of Nissan's subsidiary Nissan Motor Body will also be closed for two days on Feb. 15 and Feb. 22, the company said.
▲Employees working at Nissan's Kyushu plant
Nissan has seven vehicle plants as well as three parts factories in **** Japan, and the affected Kyushu plant's current production capacity is up to 530,000 vehicles per year. The Kyushu plant is also Nissan's largest vehicle plant in Japan.
It is understood that Nissan's Kyushu plant has about 4,500 workers, and in the whole of 2018, this plant a**** produced 434,000 vehicles, which accounted for about half of Nissan's total production within Japan.
2, FCA: European plant parts inventory tight? Urgent need for Chinese supply
Turning its attention to Europe again. According to the foreign media "Financial Times" reported, Fiat Chrysler Automobiles (FCA) said that due to the Chinese parts factory shutdown, one of its factories in Europe, inventory emergency, will be forced to shut down production within a few weeks.
FCA Chief Executive Mike Manley said that four suppliers in China have been shut down due to the spread of the epidemic, and one of them is a "critical" component. The "critical" parts company is now putting FCA's European plants at risk.
Manley also expressed concern about the future supply situation, and if the Chinese supplier does not return to work by the end of February, the other three parts factories may also be interrupted in stock.
Manley said that in two to four weeks' time, FCA will clarify whether it will take steps to shut down plants. However, it has not yet been determined which plant.
Currently, FCA has begun internally to inventory its parts inventory and assess the current danger of a potential shutdown. At the same time, FCA has now begun to seek alternative products. However, the whole process may take longer as the replacement products need to go through a certain period of testing and certification work.
3, Jaguar Land Rover: warns of supply chain dangers
February 7, Jaguar Land Rover released its financial results, the company said in the report, China's epidemic continues to spread, may affect the company's performance in the fourth quarter, and at present to quantify the impact of the epidemic on the company is still too early.
However, just 2 days later, on Feb. 9, Jaguar Land Rover made another announcement, which said that if the outbreak continues to rage, the supply chain outside of China will also be affected. In addition, the resumption of work at Land Rover's plant in Changshu, Jiangsu Province, has also been affected, and the plant has not yet resumed work and the time of resumption has not yet been determined.
Three, China's parts companies slow to resume work? Vehicle enterprises have faced supply disruptions
A large number of vehicle manufacturers due to parts shortages shut down, while the production of these parts of the factory due to the impact of the epidemic is slow to resume work. Currently, *** four overseas OEMs have shut down production or have confirmed that they will do so soon. South Korea's Hyundai and Kia two car companies shortage of parts are wiring harnesses, car things have found the source of the supply of wiring harnesses.
According to a report by foreign media outlet The Korea Times, wiring harness parts for Hyundai and Kia's South Korean factories are currently sourced mainly from three South Korean companies, namely Kyoshin, Yura and THN.
1, Kyoshin
According to the official website of the supplier Kyoshin, the company currently has 10 branches around the world, including four in China. These four companies are Qingdao Kyoshin Electronics Co., Ltd, Qingdao Jimo Kyoshin Electronics Co., Ltd, Jiangsu Kyoshin Electronics Co., Ltd and Anhui Kyoshin Electronics Co.
A spokesman for South Korea's Kyosemi said in a recent interview with foreign news agency Reuters, "The company is currently in a state of emergency."
2. Yura Corporation
Yura Corporation currently has six factories in South Korea*** and nine factories in China, including the first factory in Weihai, the second factory in Weihai, the Rongcheng factory, the Yantai factory, the Heze factory, the Beijing factory, the Baoding factory, the Leling factory, and the Sichuan factory*** Yura Corporation's business is also distributed in Southeast Asia, Europe and South America.
3. THN Corporation
THN Corporation currently has parts factories in Korea, China, Brazil, Paraguay and the Philippines. Among them, China has the most factories, *** with 6 factories, which are Qingdao Sancheng Electric Assembly Co., Ltd, Donghai Sanming Electric Assembly, Weihai Ruixiang Electronic Assembly Co., Ltd, Sanxian Electric Assembly, Shandong Sanzhen Electric Assembly Co. In addition, three factories in South Korea also production line bundle products for the supply of Hyundai Motor.
▲Producing a car will use a large number of wire harnesses
So, combing through the Hyundai and Kia automobile production stoppage can be found:
Because of the spread of the epidemic, Jingxin's, Yura's and THN's Chinese factories were forced to stop work. Next the Korean factories, which had set aside wiring harness inventory that could be used for at least three weeks before the Chinese New Year holiday, ran out of stock and were unable to meet production, leading to the shutdown of the Korean factories. However, the supply problem could not be solved immediately because the capacity of the Chinese factories could not be guaranteed after the resumption of work, and some factories may not have resumed work for the time being.
Currently, Kyoshin and Yura have decided that they will increase the production of their factories in Korea and Southeast Asian countries to make up for the current lack of capacity in China.
While a number of companies in Japan, South Korea and Europe have experienced supply cuts or are about to do so, the media have only reported on specific parts supply cuts by South Korean manufacturers, and have thus been able to follow the trail to find out exactly which ones are having problems.
While Nissan, FCA and other companies have cut off the supply of specific parts has not yet been reported in the media, while the manufacturers have not disclosed information in this regard. Therefore, there is no way to know exactly which domestic suppliers stopped production to its production schedule.
Four, parts and components enterprises have become the norm? Globalization layout have high tactics
Many overseas car companies were forced to stop production due to parts shortages, which also shows that China's parts suppliers in addition to meet the needs of domestic car companies, but also in the supply of the global automotive industry chain. So what is the situation of domestic auto parts going overseas?
Customs statistics show that since 2014, China's auto parts manufacturing industry exports have been maintained at more than 60 billion U.S. dollars (about 420 billion yuan), accounting for more than 75% of the proportion of all automotive products exports, parts and components are the mainstay of automotive product exports.
The "2018 Global Most Valuable Parts and Components Brands List" released by Brand?Finance, a British brand value assessment organization, shows that in 2018, the world's most valuable parts and components company is Valeo, followed by Magna, Amperex, and China's Junsheng Electronics ranked seventh. Other Chinese parts brands such as Weichai Group and Huawei Automobile also entered the top 100 global auto parts in 2019.
However, the competitiveness of Chinese parts companies is still not as good as that of international parts industry giants at present.
As the phenomenon of overcapacity of automobile enterprises continues to emerge, they are facing challenges in their operation and survival. Directly linked to the vehicle enterprises is the parts and components enterprises. These parts and components companies are also trying to explore and seek transformation, one of the important direction is to go to sea.
After years of development, China's parts and components enterprises overseas mode, has been made in China, sold to the global model, upgraded to overseas R & D, overseas production, overseas sales model, entered a new stage, the following are some typical parts and components enterprises overseas case.
1, Junsheng Electronics
Junsheng Electronics is a plastic parts processing enterprise, but the company through a number of enterprise innovation and upgrading and overseas mergers and acquisitions, get more markets. At present, Junsheng Electronics has developed products in the fields of intelligent driving, automotive safety products, automotive functional parts, power control of new energy vehicles to realize the upgrading of parts manufacturing.
At present, Junsun Electronics has its main R&D bases in Asia and Europe, and its parts and components business is carried out in more than 30 countries, with more than 50,000 employees. According to the official website of Junsun Electronics, there are 62 OEM automobile enterprises*** and 11 Tier?1 manufacturers cooperating with Junsun Electronics.
2, Weichai Group
Weichai Group to export trade, cross-border mergers and acquisitions, local manufacturing three ways to realize the overseas strategy.
In export trade, Weichai Group's power assemblies, complete vehicles and engines, hydraulic controls and auto parts are exported to more than 100 countries and regions around the world, and it has also set up offices in more than 30 countries. In terms of cross-border mergers and acquisitions, Weichai Group has expanded its development in the fields of engine and hydraulic technology through mergers and acquisitions since 2009. Meanwhile, Weichai Group has also set up R&D and manufacturing bases in Southeast Asia, North America and other countries to promote the enterprise.
3. Beijing Hainachuan
Beijing Hainachuan is an enterprise specializing in the R&D and manufacturing of automotive parts and components, and its current products cover the interior and exterior of automobiles, powertrain systems, chassis systems, seats, bodywork, and electronic and electrical appliances. The current global industrial layout of Hainachuan covers 9 countries in Asia, Europe, North America and South America, while 32 bases and R&D centers have been established.
▲Globalization layout of typical domestic auto parts companies (Table from China Auto Parts Industry Development Report (2018~2019))
In addition, many internationally renowned parts and components companies are optimistic about the Chinese market, and they have also opened branches and factories in China for local production.
The products they produce, on the one hand, meet the needs of automobile enterprises in China, and even sell back to Europe, the United States, Japan and South Korea and other regions. For example, the aforementioned South Korea Jingxin, Yura and THN three companies, is in China to produce zero automotive wiring harnesses, sold to South Korea.
4, Magna
Magna is the parts supply business among the leaders, in China *** there are 31 factories, 10 R & D centers, in addition to part of the sales center **** 55 office locations.
Currently, Magna has established factories or R&D centers in China for body, chassis, exterior, seats, powertrain, electronics, mirrors, electronic locks, and vehicle design and OEM in a variety of areas. Magna has 166,000 employees worldwide***, with 18,750 employees in China, accounting for approximately 11% of the global workforce.
5, Bosch
Bosch's manufacturing plants in mainland China*** have 23, mainly manufacturing electric vehicles, motors, gearboxes and electrical equipment, and exported to other countries. Two plants in Wuhan make automotive steering systems and thermotechnology; the plant in Wuhu produces multimedia entertainment systems; the Nanjing plant produces power-assist systems; and the Changzhou plant produces products for smart internet-connected and self-driving cars....... In addition, Bosch has plants in Wuxi and Taicang.
In 2019, Bosch's sales in the Asia-Pacific region totaled 22.5 billion euros (about 172 billion yuan), with sales in China reaching 10 billion euros (about 76 billion yuan).
V. Global car companies rely on Chinese parts? Local companies still need industrial upgrading
China, there are many parts manufacturers to go to sea, but also many foreign companies to invest in China, China's participation in the global automotive industry chain is getting bigger and bigger.
Returning to the shutdown of car companies' overseas factories. A total of ***5 car companies and 11 factories have shut down, as more and more car companies begin to warn of supply chain problems. Almost all of the car companies that have already shut down have said they can use the weekend after resumption to make up production if the shutdown doesn't last long.
But the economic losses to car companies from the shutdowns are real. Hyundai's five factories in Ulsan, South Korea, are expected to lose 3.5 billion yuan after a shutdown of about five days, Nissan's Kyushu plant in Japan is expected to lose 3,000 vehicle deliveries after a two-day shutdown, Renault's Samsung plant is shut down for four days, and the Kia plant is also shut down for one to two days.
It seems that the car companies do not stop production for a long time, but a day of suspension of production to the car companies are huge losses, and the longer the suspension of production, the greater the loss.
Components companies located in China gradually resumed work after Feb. 10, which is believed to ease the pressure on the entire supply chain.
China's annual exports of auto parts and components can reach more than 60 billion U.S. dollars (about 420 billion yuan), accounting for more than 75 percent of the total exports of the automobile manufacturing industry, which is the mainstay of automobile product exports.
Currently, China's auto parts manufacturing enterprises more than 13,000, the annual output value of more than 3 trillion yuan, in the automobile manufacturing industry as a whole, the weak performance of today, and still maintain a stronger growth force. This is inseparable from the parts and components enterprises of technological innovation and industrial upgrading, but also parts and components enterprises to expand overseas markets, occupy a broader world.
Parts enterprises to the sea, once the success, which is both overseas enterprises parts manufacturing technology, but also allows Chinese parts and components enterprises and more income, can be said to kill two birds with one stone.
However, China's exports of automotive parts and components products, most of the product value-added are relatively low. Glass, bumpers, wiring harnesses, brake pads are more common, but the key automotive components accounted for a low percentage of export volume. This also shows that Chinese parts and components enterprises, in addition to a few giants, the overall level of OEM factory. And OEM factory production model, in the global economy today, obviously no longer suitable for China's national conditions.
Also worth noting is that in the annual 420 billion yuan of automotive exports, a certain share is still due to foreign companies set up in China, not the export of Chinese parts and components enterprises.
This all shows that China's parts and components enterprises still need to further enhance the research and development capabilities, toward the core of the parts and components industry. On the other hand, they need to enhance their competitiveness and further expand their market share.
Conclusion: Chinese auto parts companies affect global industry development
As the epidemic continues to spread, Chinese parts makers have also been forced to shut down production and product deliveries are delayed. This has hit foreign OEMs that rely on Chinese parts.
In the past two days, China's auto and parts manufacturing industries have gradually begun to return to work, but companies in Hubei will have to wait until next week before they are likely to resume work. The impact of the epidemic on foreign car companies is likely to continue. It is hoped that the outbreak will end sooner rather than later, so that people's health will not be hit again.
This article comes from the authors of Automobile House Car Family, and does not represent the viewpoint position of Automobile House.