With the rapid development of the Chinese automotive market, competition in the automotive parts industry is also becoming increasingly fierce. Currently, China is one of the largest automotive parts producers in the world, with companies covering almost all automotive parts production. However, the overall variety of automotive parts is extensive, leading to a relatively low market concentration in China's automotive parts industry. Data shows that as of June 2023, there are 100,000 registered enterprises in the automotive parts industry within the "automobile manufacturing industry," with 2022 being the year with the highest number of registrations, reaching 12,995.
Currently, Chinese automotive parts are an important component of the automotive industry chain, and the competitive landscape is influenced by various factors. As vehicle manufacturers gradually shift towards a specialized vehicle development model, the competitive landscape of automotive parts is also changing. Tier 1 suppliers play a crucial role in the design and development of core automotive components, gradually mastering core technologies and forming their own core competitiveness. These Tier 1 suppliers collaborate with vehicle manufacturers in research and development, playing an important role in product design and technological innovation. They typically possess high research and development capabilities and technical strength, enabling them to provide high-quality and high-performance core components to vehicle manufacturers. Tier 2 suppliers have the capability to produce key components and supply specialized split components to Tier 1 suppliers. These Tier 2 suppliers usually focus on specific areas, such as engines, chassis, and electronic systems, and they possess high professional technology and production capacity in their fields. By collaborating with Tier 1 suppliers, they can supply their components to vehicle manufacturers, providing critical support for vehicle production. Tier 3 suppliers and below have the capability to produce general components and supply to Tier 2 suppliers. These suppliers typically produce more standardized and generalized components, such as bolts, nuts, and seals. Their products are not only supplied to the automotive industry but are also widely used in other industries. These suppliers are usually smaller in scale and face greater competitive pressure, but due to the generality of their products, market demand is relatively stable.
The gradual expansion of supplier levels downward has led to an increase in the number of suppliers in the automotive parts market, while also reducing the industry's concentration, making competition even more intense. This trend means that more companies are entering this market, bringing greater challenges to suppliers. To cope with this competition, suppliers need to continuously enhance their technical strength and product quality to meet the demands of vehicle manufacturers and the market. In addition, they also need to strengthen cooperation and coordination with upstream and downstream suppliers to build a stable and efficient supply chain system. Only in this way can suppliers maintain a competitive advantage in the fierce market competition.