Profit Growth in The Auto Parts Industry

Judging from the industry operation from January to October 2010, the total profit of the auto parts industry is still growing, but the growth rate has slowed down; import and export volume has also increased, but imported products are high-profit and high-profit such as gearboxes and engine parts. Value-added, high-tech products are the main products, and the export products are mainly labor-intensive and resource-consuming types with low entry barriers and low profits such as tires and electronic instruments. The downstream vehicle industry has overcapacity for a certain period of time. Although there was an unconventional high-speed growth in 2010 under various national stimulus policies, in 2011, the growth rate of production and sales slowed down and the pressure of overcapacity increased. Affected by this, parts and components The industry may be under pressure from greater profits in the second half of the year. The main problem facing the industry is that the upstream and downstream are crowded out, and the industry faces double pressure. The parts industry is a crowded out industry and lacks bargaining power for the upstream and downstream. The upstream raw materials are mainly steel, rubber, plastics, fabrics, etc., and their prices are ultimately determined by the prices of bulk commodities such as steel, petroleum, and natural rubber. Auto parts companies can only avoid risks by judging the trend of upstream commodity prices. At the same time, downstream vehicle manufacturers are mostly large enterprises and groups, and they are in a strong position in the interest game with parts manufacturers, and they have strong negotiating capabilities and can pass cost pressures to the auto parts industry. Therefore, parts are actually at two ends. Squeezed "sandwich" sandwich status.