Recently, the National Development and Reform Commission’s monopoly investigation on the auto industry has set off an uproar in the auto industry. On August 20, the NDRC announced the monopoly of four Japanese bearing companies, including Japan’s Sumitomo, and four Japanese bearing companies. Penalties were imposed according to law, and the total fine was RMB 1,235.4 million. This has also become the biggest ticket issued by China's anti-monopoly department since the promulgation of the Anti-Monopoly Law. Of course, the anti-monopoly work of the auto industry will not end. This is just a prelude to the anti-monopoly investigation in the auto industry. It is the ultimate goal to fundamentally solve the problems of the current domestic automobile industry and promote the healthy and orderly development of the automobile industry.
According to an interview with the German "Stuttgart" on the report of Elring Klinger CEO Stephen Wolf, the Chinese government has already notified several German parts manufacturers that they are not allowed to continue to set up independently. In China, domestic subsidiaries conduct business, and in the future these companies must form joint ventures with local Chinese companies to continue their business in China. At the same time, Wolff also said that at least three German component manufacturers have to find partners in China to continue their business in China.
Regarding the authenticity of this report, we are currently unable to verify it, but this news will make people who care about the development of their own brands rejoice. The elimination of the sole proprietorship system of the parts industry is conducive to the development of domestic parts and components enterprises.
In fact, the problem of the auto parts industry is more serious than the whole vehicle industry. According to the regulations, foreign automakers must enter into a joint venture with Chinese automakers to enter China, and no foreign automakers can have more than two partners in China. Therefore, this has formed a development path for joint venture brands with Chinese characteristics. As an indispensable part of the vehicle project, along with these foreign brands, there are foreign parts companies that are everywhere.
However, unlike the whole vehicle industry, the relevant domestic laws and regulations do not impose strict regulations on the share ratio distribution of the parts and components industry. That is to say, foreign parts suppliers can enter the domestic market as sole proprietorship. As a foreign-invested company, these wholly-owned foreign parts suppliers also enjoy various preferential conditions created by local governments to attract foreign investment. As part of the industrial chain, wholly foreign-owned component companies can also make full use of China's low local labor costs and expand production scale. For the government, the presence of these companies can bring more jobs to the local area and boost economic growth. However, for the autonomous automobile industry, the situation of foreign-owned enterprises will inevitably lead to short-board development of independent parts and components enterprises and hinder the development of the independent automobile industry.
Generally speaking, the premise of the completion of the vehicle production base must be the availability of supporting supplier resources. The completion of a complete vehicle production enterprise will even drive the development of surrounding automobile-related enterprises. Therefore, the local government is happy to attract investment in this area. However, we are also keenly aware that although China has a large shareholding ratio in the vehicle joint venture, most of the profits are still in the hands of foreigners due to the existence of sole proprietorship suppliers.
This is the technology and patent monopoly we often say. Although the automotive industry has achieved global development, the automobile industry is artificially divided into Japanese, European, and American factions, depending on the country of production. Several factions learn from each other but are independent of each other. And supporting these factions independently of each other is a series of powerful parts suppliers. With the support of patent rights, the parts between several factions are completely incompatible. As a simple example, Volkswagen's favorite boneless wiper snap-on structure limits the owner's ability to use only this patented wiper. The part that seems to be contrary to the Anti-Monopoly Law is exactly what the Intellectual Property Law wants to protect.
In the recent punishment for Japanese parts suppliers, we can also see that the NDRC's judgment on the monopoly of Japanese parts suppliers is that these companies have reached and implemented price monopoly agreements for auto parts and bearings. It is not the concentration of operators who abuse market dominance and exclude and restrict the effects of competition. In other words, anti-monopoly in the automotive industry is full of respect for intellectual property. So how to break the monopoly under the protection of intellectual property rights? joint venture.
The tangible benefits brought about by the profit after the joint venture are naturally not to be said. It can be seen from the huge auto companies that are not enterprising. Through the joint venture, a portion of the profits originally attributed to the foreign party will return to the pockets of Chinese companies. These cash flows are positive at the level of the entire industry and even the national economy.
Compared with the market-changing technology of the whole vehicle industry, it is obviously more reliable for component companies to exchange technology through joint ventures. Different from the whole vehicle, the coordination of the components is relatively less and the specificity is stronger. This means that if the Chinese personnel are involved in the development work, the development will be relatively difficult. On the other hand, the development of the automotive industry to today's vehicle companies involves less and less development work, and the core technologies they have acquired are becoming less and less. The system development work of individual components is more and more, and the development work of suppliers is becoming more and more specific, which also makes the black box parts of the automotive industry more and more. Therefore, under the current industrial conditions, the core technologies of key core components are basically controlled by suppliers. Through joint ventures, Chinese companies will have more opportunities to intervene in the design and development of core components, and master the related technologies of parts from the aspects of refinement.
For self-owned brand automakers, the emergence of joint-venture parts suppliers can alleviate the embarrassing situation of independent brands subject to foreign-funded parts and components enterprises to a certain extent. For example, through the joint venture between the vehicle manufacturer and the foreign component companies, it is possible to classify the parts suppliers into the group and turn them into internal contradictions.
At two points, we should also see the reality of the vehicle joint venture process. The Chinese side is not enterprising. The foreign technology blockade is a problem faced by all Chinese automobile joint ventures. Practically speaking, there are also a few suppliers of parts and components that actively realize Sino-foreign joint ventures in the domestic automotive industry, but there are very few that can truly learn the core technologies. where is the problem? The Chinese positioning is wrong.
A slap in the face, the status quo of the Chinese auto industry joint venture company can not really blame the foreign technical blockade. The Chinese companies apparently have some deviations from their own positioning. Among the vast majority of Sino-foreign joint ventures, Chinese companies are more willing to put themselves in the position of investment companies and invest in enterprises in the name of automobile companies. I don’t think about how to make progress. If there is no regulation of laws and regulations, then the joint venture of the parts industry will once again embark on the path of the whole vehicle enterprise. How to supervise? I think it is especially important to strengthen brand supervision.
Numerous experiences and lessons have already told us the importance of the brand. In the joint venture of the whole vehicle, we should reasonably believe that the brand of the foreign joint venture partner should be used. However, in the joint venture of parts and components, can we consider the other way around, since there is no clause that stipulates that the joint venture must use the foreign trademark and the enterprise is everyone's, then why not use the Chinese trademark?
In the joint venture process of parts and components, the use of Chinese brands can promote the cultivation of independent parts suppliers. We will focus on supporting several comprehensive parts and components enterprises, and through joint ventures with foreign companies through the huge capacity of the Chinese market, we must also use the Chinese trademarks for part of the stock ratio. After several years of market tempering, we have built one or two comprehensive parts suppliers with internationally renowned levels. Looking at the automobile industry chain of the world's automobile powers, in addition to the powerful vehicle companies, there are one or several internationally competitive parts suppliers without exception. It can be said that component suppliers are an important part of supporting vehicle companies. With a strong independent component supplier, the entire brand of the vehicle will truly master the core technology.
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