Automobile and motorcycle parts need to conform to the diversified development trend

With the continuous development of the automotive and motorcycle industries in recent years, consumer demand for automotive and motorcycle parts has also been increasing. As one of the largest producers of automotive and motorcycle parts in the world, China has an increasingly complete industrial chain and supply chain in this field, meeting domestic demand while gradually moving towards the international market. However, in the face of technological, market, and consumption scene development and changes, automotive and motorcycle parts exporters need to understand the industry's prospects and trends, avoid risks and challenges, and implement their internationalization strategies safely and efficiently.

According to the "Auto and Motorcycle Parts Export Industry Report 2023" released by the Industrial Research Institute under the Shenzhen Cross-Border E-commerce Supply Chain Service Association, China's auto and motorcycle parts industry has formed six major industrial clusters in the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, Central China, Chengdu-Chongqing in the west, and northeastern China. The parts output of these six industrial clusters accounts for about 80% of the entire industry. With the expansion of the auto and motorcycle market and the increase in the penetration rate of new energy vehicles, the auto and motorcycle parts industry will usher in new growth opportunities. The export volume value report released by the General Administration of Customs shows that the export of auto parts was about 8.1 billion US dollars in 2022, up 7.4% year-on-year; the export of motorcycle and bicycle parts was about 1.32 billion US dollars, up 4.5%. According to the report, auto and motorcycle parts are mainly targeted at the after-sales market, and the demand for the after-sales market is mostly essential, so its export is less affected by the overall contraction of external demand.

The report pointed out that auto and motorcycle parts exporters should closely follow the diverse trends in technology, market, and consumer demand in the industry in order to seize international opportunities in a timely manner. On the technology front, auto and motorcycle parts are moving towards intelligence, electrification, lightweighting, and environmental protection.

The development of artificial intelligence and Internet of Things technology has led auto and motorcycle parts to gradually become more intelligent. For example, smart sensors can monitor the vehicle's operating state in real time and provide feedback, smart navigation systems can provide the optimal route, and smart safety systems can predict and prevent accidents. The popularity of intelligent auto and motorcycle parts is rising, especially among young people.

At the same time, with the popularization of electric vehicles, auto and motorcycle parts are also transitioning to electrification. Electric motors, battery management systems, and charging equipment are all important accessories in the trend towards electrification. The electrification of these accessories will effectively enhance the performance and range of electric vehicles. Moreover, to improve fuel efficiency and reduce carbon emissions, the lightweighting of automotive and motorcycle accessories has become a trend by using high-strength lightweight materials such as aluminum alloy and carbon fiber composite materials, which can significantly reduce the weight of the vehicle and improve its fuel efficiency; to reduce harmful substances, automotive and motorcycle accessories are becoming increasingly environmentally friendly by using recyclable materials for production and developing new accessories that can reduce vehicle emissions.

For market development, the trends of globalization acceleration, online sales growth, and the increasingly thriving cross-border e-commerce cannot be ignored. Under the trend of globalization, Chinese automotive and motorcycle accessories enterprises have adopted mergers and acquisitions, overseas mergers and acquisitions, equity joint ventures, and joint venture cooperation to accelerate their expansion and integration into the world's auto parts procurement system. At the same time, the online market demand for automotive and motorcycle accessories has grown rapidly, and online purchasing has become a new consumption channel for users. Cross-border e-commerce breaks geographical restrictions and brings high-quality automotive and motorcycle accessories products to more countries and regions, promoting global automotive and motorcycle accessories supply and demand matching and optimizing global resource allocation.

In addition, consumers' demand for automotive and motorcycle accessories has become diversified. In addition to traditional automotive parts, consumers are also seeking higher quality, more functional, and more unique automotive accessories. In the Western European and American regions, car owners are keen on doing their own auto repair, maintenance, and modification, thus requiring more diverse automotive parts, bringing more development opportunities to the auto parts e-commerce market. For the United States, due to the lack of mandatory vehicle scrapping system, vehicles have a longer life cycle, which makes the US auto parts market have a more diverse demand for auto parts.

In addition to following the trend, outbound enterprises should also pay attention to the technical and market risks in the automotive parts industry. The report shows that the technology update and replacement speed in the automotive parts industry is very fast, especially under the background of the rapid development of new energy vehicles and intelligent vehicles. For example, the development of electric vehicles has brought about the risk of elimination for traditional internal combustion engine parts, while the technical barriers for the core components of new energy vehicles such as batteries, motors, and electric control systems are relatively high. If enterprises cannot keep up with the update of technology, they may face the loss of market share.

Technical standards and quality control, as well as technological R&D capabilities, are also worth paying attention to. The production of automotive parts must strictly adhere to technical standards and quality requirements. If a company encounters quality issues during production, it may result in product recalls, causing huge economic losses and damage to its brand reputation. The competition in the automotive parts industry is increasingly fierce, and a company's technological R&D capability has become a key factor determining its market competitiveness. Insufficient technological R&D capability may put the company at a disadvantage in market competition.

Market risks require attention to fluctuations in raw material prices. For example, the shortage of chips has slowed down the sales of new cars, promoting the vibrancy of the local used car market and boosting demand for accessories, low-end modifications, and other products. The rising prices of raw materials and shipping fees have prompted offline channels to seek cheaper supplies and maintain profit margins.

To help automotive parts companies navigate their international expansion, the report, in addition to highlighting industry trends and risks, also offers recommendations for corporate overseas strategies. Specifically, in terms of channel strategies, companies should diversify their layouts based on target markets and product categories, exploring emerging platforms to seize early opportunities; in terms of logistics delivery, they should pay attention to overseas warehouses to solve the problems of timeliness and cost, as well as provide localized services; in terms of brand building, they should leverage independent websites to establish their brand image, and at the same time, develop their own brands to enhance consumer loyalty. In terms of service enhancement, we provide repair and assembly services to enhance the value of our products, and we also engage in online and offline marketing to enrich our customers' experiences.

Source: China Trade News Author:Zhang Hanmei

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