BYD entered the automobile industry as a battery manufacturer. It was questioned at first, but with the effort of the company, it broke the sales records continuously and became one of China’s leader automobile manufacturers finally. It is a good example for the “amateur” to enter the automobile industry. Compared to the automobile industry, there are more new amateurs joining the auto parts and components area. After three to five years’ fighting, many of them won their seats in the industry successfully.
In the activity of selecting top 100 most competitive auto parts enterprises in 2010, which is guided by the Ministry of Commerce and hosted together by the K-car network and China International Auto Parts Expo, an investigation is made among about 1000 specialists who are responsible for the purchasing and technique development in more than 400 main plants from home and abroad. According to the research, there are about 5% of the auto parts suppliers who are recommended as the top 100 of the part enterprises enter this industry in the recent 5 years. Although these companies are not confident about entering the top 100, about 70% of judgers think that they have confidence in some of these enterprises. used auto parts
After the analysis, there are following types about the amateur industries entering this industry.
The first type is from the home appliance industry which may produce the whole assembly or the parts. The second type is from the IT industry which may focus on the precision plastic parts or the precision metal parts. The third type is about the casting, forging, cold extrusion, and metallic sintered products. These products are not used in the automobile industry before, but now these parts begin to be applied in the automobile industry. Additionally, there is another type of industry which has no relationship with the automobile industries. These companies are mainly funds-driven.
According to the research on the merchandising managers and some technical experts, there are three reasons for this phenomenon. Firstly, China’s automobile industry is developed extremely quickly which will obviously lead to the development of the industry. It is predicted that China will become world’s largest market for auto parts industry. As a result, more and more companies want to share this “big cake”. Secondly, the home appliance component products have little profits due to the heavy competition. Therefore, many of the manufacturers want to have a try on the auto parts industry. Thirdly, another important reason is that in the cycle of development, Chinese auto parts industry is still in the increasing stage with 10 to 15 years potential for long-term development. From the maturity integration period, it is expected to be 5 years or longer. Therefore, entering the auto parts industry at this stage is still a chance to win success. According to the research and analysis, most of the new entrants who are successful in business have a higher capacity of the company in the aspects of fine enterprise management and cost control. For some who are not that successful, it is due to their long-term incomprehension and inadaptability to the rules in the auto parts industry.