Nishi Takashi: China's spare parts manufacturers should re-develop their capabilities

The 2010 China International Auto Parts Expo was held on September 25-27, 2010. During the exhibition, Hideyoshi Nakajima, President of the Hiroshima Production Technology Association, and Hiroshi Noda, Executive Director of the Daihwa Nishikawa Corporation, received an exclusive interview.

Reporter: Please introduce the association first.

Xiali Lixiao: The goal of the association is to work for 24 hours and 365 days. To achieve such goals, we must achieve technological innovation. Reduce costs while ensuring quality. No one is working to reduce labor costs. The purpose of establishing the association is to make technological innovations.

Reporter: Is this association-oriented company a Japanese small and medium-sized automobile component?

Takashi Nakajima: Basically yes. We organize medium-sized auto parts manufacturers and companies with a certain technological foundation.

Reporter: What kind of policy support does Japan have for such small and medium-sized component companies? How is it done?

Shiori Nakajima: The Japanese government will have a certain amount of subsidies to encourage these SMEs to go global and expand overseas markets. Like our participation in the exhibition, there may be a subsidy of 10 million yen, but there is no specific national subsidy policy.

Reporter: Compared with the development of the entire vehicle industry, the development speed and attention of China's auto parts and components are far from enough. Compared with other countries, China's auto parts industry is also lower than Japan, Europe and the United States. Where do you think the root cause of this problem is? What are the key factors to break through the bottleneck?

Nishi Nakajiri Takashi: The popularity rate of Chinese cars is still very low. China has only 4 vehicles out of 100, while Japan is 60 and the United States is 70. This shows that the potential of the Chinese automobile market is undoubtedly great. The companies under the association also have cooperation with Chinese auto parts companies. I think the gap is mainly in development capabilities.

Hidden wild Yahe: Yes, there is still a lack of development capabilities. At present, China's auto parts companies are only at the level of "making products for drawings." However, the industry standard for Japanese parts and components companies is FSS (Full Service Provider). In other words, the manufacturer only needs to provide the cost price and the specific requirements, and the component manufacturer will cook the product according to these requirements instead of just producing it passively. I think this is what Chinese parts manufacturers should pay attention to.

Reporter: In the Chinese automotive market, it can be said that "the vehicle is king", and the status of parts and components companies and vehicle companies is not balanced. How should the interests of both parties be coordinated?

Nishiurali Takashi: Actually, not only in China, but also in Japan and South Korea. The government can have some corresponding subsidies, but it is mainly technical development. To reduce costs and improve competitiveness, I think this is the current part manufacturers should do.