Challenges and Opportunities Coexist in Guangxi Auto Industry: How to Go in the Future


Since 1769, the Frenchman Quiné produced the world’s first steam-powered three-wheeled vehicle, the world’s auto industry has been developing for nearly 200 years. After more than 50 years of hard work, young Chinese automakers have basically established a relatively complete auto industry production system, and have become the world’s fourth largest automotive producer, and the third
Large consumer market and the largest potential market. After nearly 40 years of hard work, the automobile industry in Guangxi has also achieved world-renowned achievements.

The total economic output of the automotive industry ranks 12th in the country

In 2006, the Guangxi Automobile Industry completed 533300 vehicles, which accounted for 7.33% of the country's total automobile output; the number of vehicle internal combustion engines was 828,100 units, accounting for 13% of China's total internal combustion engine output; and the current year's total industrial output value of the automotive industry was RMB 4.014 billion. , accounting for 2.47 percent of the country's total auto industry; total profit of 1.520 billion yuan, accounting for 1.92 percent of the country; VAT 1.29 billion yuan, accounting for 2.82 percent of the country. The average balance of the net fixed assets of the auto industry was 6.040 billion yuan, which was only 1.72% of the national total. The total number of employees in Guangxi auto industry is 53,700, accounting for 2.1% of the total employment in the national auto industry.

In 2006, Guangxi's auto industry achieved an industrial added value of 8.289 billion yuan, accounting for 1.73% of the region's GDP, and accounted for 7.60% of the region's above-scale industrial added value, which was 1.67% and 4.39% higher than that of the same period.

In 2006, the total vehicle output in Guangxi increased by 36.63% over the previous year, which was higher than the national growth rate of 11.53%. The industrial sales output value increased by 21.42% over the previous year, which was 7.33% lower than the national growth rate.

The total economic output of the Guangxi automobile industry ranks 12th in the country, and the total vehicle production is about 6th. The market share of mini vehicles is the highest in the country. Vehicle internal combustion engines have a major impact throughout the country.

Guangxi Auto Industry not only made important contributions to the economic growth of the entire region, but also had a more important influence and status in the country. The "Eleventh Five-Year Plan" for the industrialization of the autonomous region has determined that the development target for the "Eleventh Five-Year Plan" automobile industry is one million vehicles. The annual sales revenue of the auto industry exceeds 100 billion yuan, and the industrial added value is 22 billion yuan.

Facing four major opportunities

The speeding up of cars into the home is the biggest driving force in accelerating the development of the automotive industry. In 2005, the country’s total vehicle ownership amounted to 31.6 million. Since 1995, the average annual growth rate was 11.75%, of which private cars reached 18.48 million, an average annual increase of 22.15%. In 2006, China became the second largest new car market in the world after the United States. According to industry insiders, the current number of cars in China is less than 30 vehicles per 1,000 people, which is far behind the world's average of 120 vehicles per 1,000 people. China's automobile market has great potential for development, especially private car consumption, and will continue to grow rapidly in the next 20 years. .

The acceleration of industrialization and urbanization has brought new demands to the automotive industry. The China Association of Automobile Manufacturers predicts that in 2007 China will have more than 8 million cars produced and sold, and will exceed 10 million in 2010. In 2020, China may become the world’s largest automobile producer and consumer.

Both China and ASEAN are rapidly developing automotive emerging markets. The acceleration of the process of building the China-ASEAN Free Trade Area will be conducive to the development of the automobile industry in our region. In the industrial chain for the development of the automotive industry, we are at the high end, while ASEAN countries are at the low end. There is a clear industrial gradient. Gradient means that there is a wide range of cooperation opportunities. According to the current economic development and national income levels of most countries in ASEAN, Guangxi's micro-cars and mini-cars have a very broad market space. It is possible for the Guangxi auto industry to explore the ASEAN market and to establish assembly plants in ASEAN countries.

Guangxi's auto industry has a basis for accelerating development. At present, a relatively complete industrial structure has been formed for trucks (heavy, medium, light, and miniature), passenger cars (large, medium, light, and miniature), miniature cars, automotive internal combustion engines, and auto parts industries. At present, there are more than 100 auto parts and accessories manufacturers. Our district already owns "Vulture", "Chevrolet", "Dragon", "Dongfeng Popular", "Popular Scenery", "Daewoo Bus" and other influential automobile brands and "Yuchai Machinery" internal combustion engine brands in China. The Guangxi automobile industry already has 4 national-level technology centers and nationally-recognized laboratories, 10 provincial-level technology centers, and initially established a product development platform.

There are four major challenges

The competition in the auto industry is getting more and more intense. At present, the world’s 11 largest multinational automobile companies have entered China, and the vast majority of the world’s 50 largest component companies have invested in factories in China. The domestic competition in the Chinese auto market has evolved into an international competition, especially in the fastest growing car sector. The competition for mid-level and above cars is mainly among multinational auto giants. Due to too many domestic automobile manufacturers, excessive vehicle production capacity, and other reasons, resulting in a price war one after another.

The scale of market value of Guangxi automotive products is much lower than the number of products. In the value chain of the automotive industry, it is still at the low end. The performance of the product is low in technology, low in price, and low in profitability, and it belongs to the stage of “affordable price”. The development of the automobile industry in Guangxi is still in the "primary stage."

Shortage of R&D staff and insufficient investment in R&D. European and American developed countries’ R&D personnel generally account for more than 30% of the entire industry, and China’s is only 8%. And we only have 2.5% in Guangxi. Relevant experts predict that China’s current automotive industry has a talent shortage of 500,000. For example, Shanghai will require more than 60,000 automotive talent within the next 10 years, and will reach more than 100,000 within 15 years. However, there are currently less than 20,000 such talents. The situation in Guangxi is even more serious.

The product structure of the entire vehicle is not reasonable, and the overall strength of the company is relatively weak and the driving ability is not strong. There are many special parts for auto parts, fewer common parts, and low supporting capability, which affects the speed and effectiveness of new product development. The ability of new technologies and new products to enter the market is weak, resource integration capacity and capital operation capacity are not strong, and the industrial expansion rate is slow. The institutional structure and shareholder structure of some enterprises are unreasonable, which seriously restricts the development of the automobile industry.

What to do in Guangxi

Speeding up the development of the auto industry is an inevitable choice for Guangxi. The development of the automobile industry does not occupy endowment natural resources, but it carries a large amount of knowledge, technology and capital, and it plays an important supporting role in improving the competitiveness and sustainable development of a region. The automobile industry is a high-growth industry. It is necessary to accelerate the development of the Guangxi automobile industry as the country develops large-scale mainline aircraft. Otherwise, there is no big support point for the next rapid economic development.

Adhere to the principle of introducing new brands and independent innovation. It is necessary to create, develop and upgrade national brands such as “Wuling”, “Windscape King”, and “Yuchai Machinery” that reflect the competitiveness of Guangxi, and support key enterprises in setting up technology development centers to further improve and improve SAIC-GM-Wuling and Yuchai Machinery Co., Ltd. National Technology Development Center. Accelerate the development of the development capabilities of key enterprises such as FAW Liuzhou Special Automobile Factory and Guilin Fuda, encouraging the enterprises to truly become the main body of innovation.

To meet the needs of market competition, speed up the production capacity of key enterprises and form advanced productivity as soon as possible. At the end of the “Eleventh Five-Year Plan” period, SAIC-GM-Wuling will develop a production capacity of 1 million complete vehicles and 700,000 engines, with an annual sales income of 30 billion yuan; Dongfeng Liuzhou Automobile will achieve 50,000 commercial vehicles and 80,000 passenger vehicles. The capacity of the vehicle; Liuzhou Special Automobile Factory broadens and refines the varieties of special automobile products to reach the scale of production and sales of 50,000 vehicles; Guilin Bus Industry Group Corporation develops large and medium sized, high-grade, low-flooring, modern modelling, electronic automation of the crew, and emissions Cleaned large and medium-sized passenger cars and city buses, reaching 10,000 production capacity; supporting Yuchai’s overall production capacity of 900,000 diesel engines, enabling Yuchai products to continue to maintain the domestic first brand; Liuzhou Wuling Liuzhou Machinery Factory through restructuring and reorganization, We will cultivate and market and increase investment in R&D and technological transformation to form an annual production capacity of 700,000 units of gasoline engines with a capacity of 0.6-2.4 liters.

Accelerate the development of auto parts enterprises, form an automotive industry cluster centered in Liuzhou and Yulin and Guilin. Market-oriented, accelerate the development of special vehicles such as dump trucks, tank cars, vans, powder carriers, and semi-trailers. The investment in the automobile industry during the “Eleventh Five-Year Plan” period will reach 15 billion yuan.

Structural adjustments must achieve major breakthroughs. While SAIC-GM-Wuling is speeding up the pace of localization of SPARK mini-cars, it is necessary to establish a mid-size sedan development platform of 1.6 liters or more, and strive to put mid-size sedan on the market in 2009; Dongfeng Liuzhou Automobile will establish a popular MPV and 1.8-liter sedan development platform for Jingyi. Achieve zero breakthrough in Guangxi's 1.8-liter mid-size sedan. Yuchai Machinery Co., Ltd., on the basis of maintaining the advantages of medium-sized automotive diesel engines, extends the product to heavy-duty and light-vehicle diesel engines in two directions, supporting Yuchai to accelerate the development of "Euro III" products and the development of "Euro IV" product technology. And reserves; actively develops more than 13 liters of heavy-duty diesel engines to expand the market for heavy-duty vehicles and large passenger cars. Improve the ability to integrate global resources to make cars. Support the listing of major key enterprises and multi-channel financing. Encourage enterprises to achieve leap-forward development through joint, merger, and asset restructuring measures.

Formulate and implement preferential policies to support the development of the automotive industry. A special fund for the development of the automobile industry shall be gradually established for the construction of the R&D system, support the development of new types of vehicles and key components, focus on discounts for technological transformation projects, further improve the technical and technological level of products, and promote the adjustment of the product structure of enterprises. Support enterprises to develop auto consumption credits and actively expand product sales. A one-off concession for road maintenance will be given to users who purchase cars from new districts and settle in Guangxi. Actively guide city bus and taxi companies to purchase district-produced cars. Implementation of government procurement, the same conditions for the production of automobile priority policy.

Adhere to the development strategy of going out and encourage enterprises to explore the ASEAN market. From January to September last year, China exported 660 million U.S. dollars of auto products to ASEAN, an increase of 28.0%. In 2006, the export volume of Guangxi's cargo vehicles reached 7641, an increase of 50.3% over the previous year, and the value of exports was 44.12 million US dollars, setting a record high. Most of them exported to ASEAN countries such as Vietnam. To support SAIC-GM-Wuling to establish an assembly plant in Indonesia and use the "Wuling" brand. Commercial vehicles, passenger cars and parts and components in the region are encouraged to export to ASEAN countries.


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