Analysis of the Three Barriers of China's Automotive Electronics

China Automotive Electronics Status

The technical foundation is difficult to break through the barriers of foreign companies; the small-scale vicious competition of enterprises is difficult to avoid;

More than 70% of the Chinese automotive electronics market is controlled by foreign manufacturers.

There are more than 1,000 automotive electronics companies in China, but they are all "small people."

On a busy weekend, Guo Yiqin, the general manager of Shenzhen Hezheng Automotive Electronics Co., Ltd., will come to the Auto 4S store in Beijing to see the use of the company's newly developed IVI (Information Entertainment System) products. Currently, the company's monthly shipments of this product are 2,000 units. In the spring of next year, this product will be released globally. Guo Yiqin expects that there will be 200,000 units of global sales in the future and 40% of export sales. In the same day, Mr. Mu, who has been in the automotive electronics industry for more than 10 years, is busy upgrading his product line, from CDs and DVDs to navigation and on-board computers. The careful layout of these people in the industry is precisely to meet the high tide of the Chinese automotive electronics market.

Analysis of the Three Barriers of China's Automotive Electronics

In September, the Chinese auto market was full of red. According to data from the Beijing Automobile Dealers Association, in September, the number of new cars in Beijing exceeded 70,000, creating a new monthly sales record. This figure is 10,000 more than in August, an increase of 17% from the previous month; it is 35,000 more than the same period last year, an increase of 103%.

"With the boom in the auto market, auto electronics have been very hot for two or three years." Mr. Mu is very happy when it comes to the market. In fact, since 2006, products such as “DVD+GPS” have been very popular in the “post-installation” market, and the markets of Shenzhen and Beijing echoed in the north and south, reflecting the “sunny days” of automotive electronics. “How many cars are produced in China each year,” said Mr. Mu. According to the concept of "Automotive Industry Adjustment and Revitalization Plan" promulgated by the General Office of the State Council at the beginning of the year, in 2009, China's automobile production and sales should strive for more than 10 million vehicles, and the average growth rate for three years should reach 10%.

However, the Chinese auto electronics companies with enviable performances are in a strange circle, that is, their growth in performance is largely due to the “cheap” and “very thin” aftermarket, while the pre-installation market and The body electronics market has been firmly occupied by foreign companies.

"In the pre-installation market, it takes two to three thousand yuan to add a set of electronic products with 'DVD+GPS' function, and only two or three thousand yuan to buy a set of products in the aftermarket, which is more than ten times worse! Mr. Mu said with emotion. In 2009, the scale of China's automotive electronics industry is expected to reach 148.43 billion yuan, and in 2012 it will exceed 320 billion yuan; and the aftermarket is only a few billion yuan to several billion yuan, with a growth rate of at most 40%.

In the good market prospects, why are Chinese local auto electronics companies trapped in a narrow aftermarket? Is it a local company's partiality? The reporter found through investigation that the local Chinese auto electronics companies, which are prosperous, are suffering from the pressure of the three “difficult mountains” and are waiting to be saved.

Technical foundation is difficult to break through the barriers of foreign companies

“Foreign auto electronics companies use 40% of the capital to control 50% of China's auto electronics market and draw 70% of China's auto electronics.” Five years ago, China's auto electronics market was like Dr. Wang Xiaoguang of the National Development and Reform Commission's Economic Research Institute. Words. Today, this pattern has not changed much. According to the survey, more than 70% of China's automotive electronics market is dominated by foreign automotive electronics manufacturers, including Bosch, Delphi, Visteon, Continental, Hyundai Mobis, Denso, Siemens VDO, Valeo. In the fierce competition, the weak Chinese auto electronics companies have almost no right to speak.

According to the industry, the automotive electronics market is basically divided into two categories. One is car body electronics: including engine, chassis and body electronics; the second is car electronics: including driving computers, navigation, audio and infotainment systems, and in-vehicle communication systems. The in-vehicle class is further divided into a custom-made front-loading and a market-installed rear-loading.

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