In China today, even in the international auto parts industry, Yuhuan County is a brand, which is a place rich in auto parts.
Thirty years of innovation
Thirty years ago, Yuhuan was a small agricultural county. People used fishing and farming to make a living.
The county's land area of ​​more than 270 square kilometers raises 390,000 impoverished resident population. Thirty years after the reform and opening up, Yuhuan has developed into an industrial county with a total industrial output of more than 700 billion in 2007 and a migrant worker population of more than 250,000. Yuhuan has a prosperous economy, a prosperous market, a well-off people, and a stable society.
Yuhuan County has six industrial clusters including auto parts, plumbing valves, medical equipment, eyeglass accessories, furniture and machine tools. Among them, auto parts and components are the first pillar industry in Yuhuan's industrial economy. There are more than 1,700 production companies and 100 percent of private enterprises. They absorb 110,000 employees and produce more than 5,000 varieties. We borrowed a slogan from Toyota: "There is a car on the way, and there is a Yuhuan automobile and motorcycle fitting on the car." In the mid-1980s, Yuhuan had the reputation of the largest auto parts production base in South China in the industry; in November 2004, China Automobile Industry Association officially granted Yuhuan County the “China Auto Parts Industrial Baseâ€. This overall regional brand is still the first in the country. In 2004, Yuhuan Auto Parts Industry achieved an output value of 113 billion yuan; in 2007, it reached 224 billion yuan, which has doubled in three years. In 2006, the National Development and Reform Commission and the Ministry of Commerce named 142 “national auto parts export base companies†in the country, among which Yuhuan County has five companies. This ranks first in the county-level economic zone. In China today, even in the international auto parts industry, Yuhuan County is a brand, which is a place rich in auto parts.
In the history of Yuhuan, a small county with a history of fisheries and agriculture, how did it switch to an industrial economy with a manufacturing industry as the mainstay? Why did such a small island with an automobile in 1958 lead to the rise of the East China Sea? Such a huge industrial cluster of auto parts and components has become China's first auto parts industrial base. Many people in the industry who have come to visit Yuhuan are unreasonable, and they are even close to being a fantasy. A consul from the North American country who came to Yuhuan to inspect Shanghai, he told us that he had heard from abroad that Yuhuan’s auto parts industry was first developed by several fishermen. He asked if we were real. Our answer is true. He was surprised that the transfer of an industry was so simple! It was just that simple. We told him that in the mid-1960s, there was a serious recession in marine fishery resources and the fishermen’s survival was in crisis. In order to solve the problem of eating and to live, fishermen must seek new ways of survival. The industrial shift caused by the survival demand is the direct cause of the germination of the Yuhuan auto parts industry. Thirty years ago, we engaged in auto parts and components to eat and survive; in the three decades since the reform and opening up, we have been developing auto parts for development, and for upgrading, we have established the status and influence of Yuhuan in the domestic and foreign industries. . For different purposes, the height, perspective, position, and method of thinking are different.
Thirty years of innovation
Yuhuan Auto Parts Industry has experienced three stages of innovation and development.
The first stage is the initial stage, in the late 70's. In this historical stage, on the one hand, the state-owned economy is highly concentrated, and all products are basically supplied to state-owned auto parts companies. The quality requirements are relatively high. Therefore, the quality of Yuhuan auto parts industry has a high starting point and strict management requirements. Foundation. On the other hand, because Yuhuan enterprises are basically matched with state-owned enterprises, they have also developed a business model of receiving orders and lack of innovation and research and development capabilities. At this stage, although the scale of the industry has not developed quickly, the industrial base of auto parts has been initially laid, and it has taken the lead in the country.
The second stage was the rise stage. In the late 1970s and the end of the 1990s, it mainly benefited from the reform and opening-up policy put forward by the Third Plenum of the 11th Party Central Committee. At this stage, policies are open, markets are open, and ideas are open. Some management personnel, technical personnel, and business personnel of enterprises have exerted their own strengths and have gone out of the original enterprises to raise funds and set up factories. For a time, the entire Yuhuan was like the fission of atoms in physics. One family had 10 families and 10 families had become 100 factories. Industrial clusters have rapidly emerged. It is precisely because of this fission-derived reason that the Yuhuan auto parts industry has produced few similarities in the production process, and the vast majority are concentrated in machined parts. Although this similarity leads to a lack of diversity in product categories. However, it also has an advantage, that is, the industrial division of labor has been refined, the industrial chain is easy to form, the production cost has a rare advantage, Yuhuan products in the market has shown a strong competitiveness. At this stage, the industrial scale of auto parts and components has developed rapidly, and most of the original accumulation was formed at this stage.
The third stage is the development stage. From the beginning of the 20th century to the present, mainly after China entered the WTO, the country has opened its doors, and a broader, more standardized, and more challenging international market has appeared before the people. At this stage, foreign capital has entered the domestic market one after another, and the competition has become increasingly fierce; the huge capacity of the international market has attracted domestic entrepreneurs to want to share a foreign cake. In order to enhance the company's own taste and enhance the market competitiveness of enterprises, Yuhuan auto parts companies have invested funds to build standard factory buildings, transform production equipment, improve product quality, establish research and development institutions, develop new products, and strive to create famous brands in provinces and cities. So far, Yuhuan Auto Parts Industry has two companies that have entered state-level high-tech enterprises, four products have been exempted from inspection by the State, four trademarks have been awarded national well-known trademarks, nine enterprises have won Zhejiang famous brands, and 11 enterprises have entered provincial-level high-tech enterprise. Yuhuan has built a provincial-level auto parts industry quality inspection and testing center and a number of provincial-level enterprise technology R&D centers for brake discs, shock absorbers, suspensions, gears, etc., and has undertaken a number of national-level research projects, national-level torch programs, and Key research projects and key research projects in Zhejiang Province. In order to achieve convergence with the international market, from the domestic market to the international market, Yuhuan entrepreneurs have gone abroad to visit, study, exhibit, learn from foreign experience, and seek foreign orders and international cooperation. At this stage, the Yuhuan auto parts industry began to experience a change in growth mode, shifting from quantitative growth to increasing quantity and quality; from the domestic OEM market to the international aftermarket, and it has begun to enter the international OEM market. .
Looking at the above, I believe that Yuhuan Auto Parts Industry has a good foundation, rapid development, strong strength, and strong competitiveness and sustainable development conditions.
However, we also see that although Yuhuan’s industry scale is large, the scale of the enterprises is generally relatively small, which restricts the promotion of the industrial level and the improvement of comprehensive strength to a certain extent, and will face serious challenges in high-level competition.
How to take the road of innovation after thirty years
Yuhuan’s auto parts industry is facing both internal and external environmental challenges. From the external environment, on the one hand, a large number of international capital has entered China. It is said that there are already more than 1,000 auto parts joint ventures or wholly-owned enterprises in operation in China. These enterprises have advanced international technology, advanced management, advanced equipment and brand advantages, and then have the same level of domestic labor costs, and their products have strong competitiveness in the market. On the other hand, with the implementation of the development of the Midwest and the digging of the old industrial bases in the northeast, the advantage of the industrial base and labor cost advantage will appear stronger than Yuhuan. On the other hand, material prices have risen since last year, labor costs have increased, exchange rates have fallen, tax rebates have been lowered, monetary policy tightened, and interest rates have risen. This has caused many companies to face crises in the brittleness of the capital chain in the process of soaring costs. From the internal environment, with the development of the market economy, Yuhuan's first-mover advantage in the mechanism obtained during the initial period of reform has basically been lost; the small-scale enterprises and the lack of comprehensive strength have severely restricted the ability to participate in market competition; most enterprises Without independent intellectual property rights and lack of core technologies, the added value of products cannot be greatly improved; branded products and well-known trademarks are rare; implementation of brand strategy is a long way ahead, and so on, all require Yuhuan's entrepreneurs to make rapid progress. The choice.
[next] How does the Yuhuan Auto Parts Industry's innovation road go? I think the key is to do the following three things:
First, companies must unite. It is necessary to achieve the integration of advantages in resources through alliances, expand the industry, strengthen the company, and refine products. What depends on competition depends on strength, economic strength, strength in science and technology, strength in talents, and other aspects. The reason why Yuhuan County can become China's auto parts industrial base is because in the country's county economy, Yuhuan County's auto parts industry is in a leading position. In fact, corporate alliances have many successful precedents. Yuhuan’s Huanzhou Steel Co., Ltd., through seven small companies, has annual sales from the original several hundred million to more than a dozen billion yuan now, and the purchase volume is low, the cost is low, and the company has a large number of varieties and the sales will be good. . There are Wenzhou's Delixi Electric Appliances, which are jointly formed by more than a dozen home appliance manufacturers. Their strength has been enhanced, and their technology development has been vigorous. Enterprises are well-known throughout the country and products are competitive in the market. If you follow the pattern of the original small business, you cannot have the current generous. In fact, corporate alliances are the overall trend of current economic development. Many major auto and parts companies in the world are also involved in mergers and acquisitions, such as SAIC and NAC, Dongfeng and Hafei, FAW and Changan, etc. In today's world, companies are not big and industries are not strong. There is no room for survival. The Yuhuan County government is very supportive of corporate alliances and has specifically introduced policies to support them. At present, Yuhuan's industry is brewing the road of joint corporate development. We will promote the joint production of specialized production by promoting joint ventures of similar products, promote the joint production of systematic production by advancing joint ventures of related products, and form several large corporations by advancing the formation of specialized and systematic enterprise groups. The professional complex leads the industry to the country and to the world.
Second, the industry must innovate. Yuhuan's auto parts industry has undergone 30 years of development. However, on the technical level, it is still in its infancy. Yuhuan’s enterprises have many production parts and fewer production parts; there are many production parts and fewer production systems. Yuhuan's products, generally speaking, have a low technological content, and even less are their own intellectual property rights. This is still a big gap from the current requirements of simultaneous development and module supply proposed by the automotive industry. To change this situation, the industry must establish innovative mechanisms. First of all, the concept must be innovative. Most of our Yuhuan companies have supporting OEMs. However, we cannot think that this is a permanent relationship. There is a saying in the industry that calls for relations in the 1970s, quality in the 1980s, and quality in the 1990s. Now that we have entered the 21st century, although we have entered the supporting system of the main engine plant, if we cannot meet the requirements of the technical progress that the main engine plant has proposed for the supporting system, such as synchronous development and module supply, then the relationship is better. No matter how good the quality is, it cannot guarantee that it will not be cleared out of the system. Therefore, we must change our concepts and follow up the process of industrial development from an ideological point of view. Second, technology must be innovative. We must aim at current cutting-edge technologies for scientific development and be highly sensitive to new materials and processes. We must dare to be good at applying new materials and processes to our own product development and create products that have our own intellectual property rights. We must seize the opportunity of the current international industrial transfer and use the vision of a strategist to find and catch all useful information for my own use. It is necessary to rely on various research institutions such as the Yuhuan Automobile Parts Research Institute of Zhejiang University, the Yuhuan Research Institute of Chongqing Automotive Research Institute and the Yuhuan New Technology Transfer Center of Wuhan University of Technology to carry out extensive technology and product development. Again, we must manage innovation. We must absorb all foreign advanced management experience and management methods, such as the current popular Toyota Lean model applied to our management practices, and effectively improve our management level and achieve convergence with the international community.
Third, the brand will start. Yuhuan's enterprises have historically been supporting more and more OEMs and are accustomed to sample processing and order production, and rarely have their own brands. After entering the market economy, the maintenance market has gradually emerged and some companies have also registered their own trademarks. However, there are not many companies that really use their own branding or sales, and the amount is not very large. A large number of either supporting or branding. In fact, although the brand is an intangible asset, it is very important. As far as OEM is concerned, the production companies have invested a lot of fixed assets and liquidity, but they only earn a modest processing fee, and the brand owners have made a lot of profits. Therefore, in order to establish a foothold in the industry, we must have our own brand. From now on, we must establish it step by step. Zhejiang Zhengyu is doing better. Zhengyu shock absorbers have registered their own trademarks in more than a dozen countries and have already gained a certain reputation. Say that supporting, in the future to achieve simultaneous development, module supply, with its own brand is also essential. At present, Zhejiang Jinhui's crankshaft connecting rod, Zhejiang Shuanghuan's gear, Zhejiang Kailing's motorcycle brake system, and Zhejiang Luo's hydraulic suspension system all use their own brand support. This is also a trend. The Yuhuan government recently proposed to image the Yuhuan tree and create a brand county. Therefore, we must establish brand awareness and place brand creation in an extremely important position in business operations.
The three aspects mentioned above are based on corporate alliances. Only through joint enterprises and enhanced capabilities will it be possible to achieve intensive technological innovation and independent development to form products with independent intellectual property rights; only products with high quality and high technology content can have an impact in the industry and be effective. Brand effect, enhance the company's overall competitiveness, and create a new splendor of Yuhuan auto parts industry.
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