OPINIONS Automakers must claim core areas of supply chain

OPINIONS

Automakers must claim core areas of supply chain

China Daily

08:44, July 27, 2020

Vehicles run through a tunnel in Ji'nan, East China's Shandong province, on May 11, 2019. (Photo: Sipa)

During his inspection tour to the First Auto Works Group in Changchun, Jilin province, last week, President Xi Jinping stressed China must strengthen its research and development on core technologies and key automobile parts, to realize self-reliance in the technology as early as possible and try to make its national brands stronger.

This has hit the nail on the head.

China has been the largest automobile market since 2009. Last year, 25 million automobiles were sold in the country, among which the Chinese brands accounted for about 40 percent.

Despite this, it should be borne in mind that many key parts of the vehicles of Chinese brands are imported, and the Chinese automakers still have many breakthroughs to make to break the technological bottlenecks.

So the market share of the Chinese brands at home by no means represents the true competitiveness of the Chinese automobile industry, as should their foreign partners stop selling them the parts and relevant technology, their production lines will soon be paralyzed.

Automobile parts are China's second-largest industrial imports, second only to the integrated circuits. The rise of trade protectionism should ring alarm bells for domestic carmakers.

China canceled its restrictions on foreign investment's share in joint venture commercial vehicle manufacturing enterprises this year, and it will do so for passenger vehicle enterprises by 2022, which means the Chinese market will be opened wider to foreign brands, and Chinese brands will face increasing competition.

New energy vehicles provide the Chinese auto industry with new opportunities, as some Chinese companies have already made breakthroughs in battery technology, electric power trains, electronic control systems and autonomous driving technology, making them respectable competitors to their counterparts in Europe and Japan.

So the Chinese car makers should never be misled by their market share, but always focus on their technological gap with advanced enterprises, and increase their input in the research and development of key technologies particularly in the new energy vehicle sector.

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