The future development of automotive electronics companies

Chinese local automotive electronics companies coexist with both opportunities and challenges

Chen Guangqian, chairman of the automotive electronics technology branch of the China Automotive Engineering Society, believes that the increasingly stringent requirements for automobiles in terms of energy saving, environmental protection, and safety, as well as the demand for in-vehicle information, networking, and intelligence, provide a platform for the rapid development of automotive electronics. And opportunities.

He said that the country’s industrial policy supports the development of automotive electronics companies that have their own core technologies and will take effective measures: the National Development and Reform Commission is implementing the “Specialization of Automotive Electronics Industry”; the Ministry of Information Industry is organizing the promotion of “Automobile Electronics”. “Platform Engineering” was formally listed as one of the 13 major national projects; the Ministry of Science and Technology has included the development of automotive electronics as a “priority theme”. All this has created a good policy environment for the development of automotive electronics.

At the same time, he also emphasized that China’s automotive electronics industry is currently based on weak foundations, lack of technology accumulation, lack of core technologies, and relatively backward technical standards, and the industry lacks competitiveness. The foreign auto giants have all entered China and fully deployed, almost monopolizing the core technology areas, all of which have brought tremendous challenges to the Chinese automotive electronics industry. Therefore, how to establish an innovative and independent R&D platform, carry out automotive electronics industrialization and achieve breakthroughs is a major issue facing local companies.

Seeking Cooperation to Solve the Problem of Where is the Market?

Wang Yongqing, Director of Industrial Development Division, National Development and Reform Commission’s Industrial Policy Department, believes that China’s automotive electronics companies currently face the “what is the market” issue. He said frankly: “At present, China’s auto companies are mostly joint ventures, and most of the vehicles are joint venture brands. These multinational companies have come to China to establish the market when they set up companies. It is very difficult for our local automotive electronics companies to enter the market. The foreign brands have already had a very complete supply system in the world for many years. The next step depends on how we should enter the automotive electronics market."

Wang Yongqing said that for domestic auto parts supporting production market, domestic auto electronics companies still have certain advantages, such as Chery, Geely and other cars, as well as domestic commercial vehicles. With regard to the question of how local automotive electronics companies have entered the mid-to-high-end car sector, he believes that it is necessary to take the path of joint ventures and cooperation to increase the starting point for the development of enterprises. He said that since it is difficult to dig out the market from the hands of foreign investors, we will join hands with independent brand manufacturers that already have market share, and use Chinese local companies to be close to OEMs, low labor costs, and consistent product quality. The advantages of cheaper prices seek cooperation.

Wang Yongqing summed up his point of view that the opportunities for the development of local automotive electronics companies: First, seek cooperation with domestic companies; Second, seek cooperation with foreign companies. In addition, the role of multinational companies’ parts and components purchasers in the technical support of Chinese parts manufacturers should also be emphasized. This is an important way to absorb and introduce advanced technologies.

Car electronics market has a lot to do

Hao Jianqing, vice president of CCID Consulting believes that, from the perspective of the development trend of China's automotive electronics market, the automotive electronics market should be a promising area for domestic Chinese brand companies. First of all, from the perspective of market size, the automotive electronics market has great potential and is the fastest growing segment of the market in the next few years.

In addition to market size, the difficulty of entering the automotive electronics market will also be an important feature to attract business investment. Compared with the core automotive electronic products such as power control systems and chassis control systems, the technical difficulty of on-board electronics is obviously much smaller. For companies that want to enter the automotive electronics field, especially Chinese domestic companies with relatively poor automotive electronics technology, Electronics can be used as a breakthrough in its entry into the automotive electronics field.

So far, many local companies have used their advantages in traditional electronic products to enter the automotive information, entertainment and communications markets. For example, as the world's largest DVD production base, many Chinese DVD manufacturers have already participated in the field of on-vehicle DVD. In addition to meeting the needs of the domestic market, domestic-made DVDs are also exported to foreign countries. In addition, China's car phone industry has begun to take shape. The above examples are all good examples of how local Chinese companies can use their advantages in traditional information and entertainment electronic products to develop their own ideas and open up broader application markets for enterprises.

Automotive electronics companies should transform into body electronics companies

Yin Jianhong, deputy general manager of Foshan Good Helper Electronic Technology Co., Ltd. believes that China's huge automotive electronics market, especially body electronics, is basically monopolized by foreign companies. Foreign companies have occupied more than 70% of China’s automotive electronics market and have mastered the lifeline of sustainable development of Chinese national automobiles. In order to develop the national automotive electronics industry as soon as possible, especially the body electronics industry, the relevant departments, in addition to encouraging and supporting existing body electronics companies, should vigorously support the transformation of automotive electronics companies with scale and technology into body electronics companies.