Breaking through 4.8 trillion yuan! Continuous growth in the size of the parts market - MIM reshapes automotive manufacturing

In this rapidly developing era of the automotive industry, innovation and upgrading of every component could potentially lead to a technological revolution.

The automotive parts industry, as the cornerstone of the automotive industry, is undergoing significant changes. From traditional internal combustion engines to batteries and motors for new energy vehicles, from mechanical components to intelligent electronic systems, every technological leap is redefining our mode of transportation.

01 The situation of the automotive parts market

The market size of China's automotive parts industry continues to grow. It is predicted that by 2028, the main business revenue of China's automotive parts industry will exceed 4.8 trillion yuan.

Behind this significant growth is the strong driving force of technological progress and the rapid development of new energy vehicles. In recent years, with the continuous innovation of technology, the automotive parts industry has ushered in * development opportunities.

According to data, the global automotive parts market is expected to reach $453 billion by 2026, with revenue reaching $1513.09 billion in 2021 and further expected to grow to $198.092 billion by 2028. This series of numbers not only reveals the enormous potential of the industry, but also reflects the continuous expansion of market space.
From the perspective of the industrial chain, the automotive parts industry covers seven key areas such as engine systems, automotive electronics, and transmission systems. Each link is meticulously crafted by professional enterprises, working together to build a complete and efficient supply chain system.

Currently, China's automotive parts supply chain is facing long-term growth opportunities, with electrification and intelligence becoming the core forces driving industry development. With the increasing expansion of the new energy vehicle market, the demand for key technologies such as battery packs and lightweight materials has also surged, injecting new vitality into the industry.

In terms of exports, the performance of Chinese automotive parts is also remarkable. In 2023, China's automobile parts exports reached 88.4 billion US dollars, a year-on-year increase of 9.1%. This data fully demonstrates China's competitiveness and influence in the global automobile parts market.

It is worth mentioning that the rapid development of intelligent driving technology has further consolidated China's position in the global automotive parts field. With the rapid increase in penetration rate of L3 level and above models, the future market space will be even broader, providing more development opportunities for China's automotive parts industry.

02 What innovations are reshaping automotive manufacturing?

The automobile manufacturing industry is undergoing a profound transformation, which is driven by multiple cutting-edge innovative technologies. This transformation not only overturns traditional automobile production methods, but also redefines the performance and functionality of automobiles, opening up a new development path for the entire industry.

1. New energy vehicle technology: the driving force for green travel

New energy vehicle technology, with battery technology, electric drive technology, fuel cell technology, and energy recovery systems as its core, is committed to improving the energy efficiency of vehicles and reducing environmental pollution, promoting green travel to become a reality.

Among them, breakthroughs in battery technology, such as BYD's blade battery and CATL's CTP technology, have significantly improved the energy density and safety of batteries, reduced costs, and greatly extended the range of electric vehicles.

The optimization of electric drive technology, through the efficient integration of key components such as motors, controllers, and reducers, enables electric vehicles to accelerate more rapidly and travel more smoothly, further enhancing the market appeal of electric vehicles.These technological innovations have not only accelerated the expansion of the electric vehicle market, but also prompted car manufacturers to accelerate their transformation into the new energy sector, driving the development of related industry chains and injecting new growth momentum into the industry.

2. Intelligence and networking technology: reshaping the driving experience

The integration of intelligent and networked technologies, including autonomous driving, connected vehicles, artificial intelligence, and big data, is redefining the way cars drive.
Autonomous driving technology relies on sensors such as LiDAR and cameras, as well as advanced algorithms, to achieve autonomous driving of cars, effectively reducing human operational errors and greatly improving road safety.

The Internet of Vehicles technology, which uses 5G and other high-speed communication technologies, closely connects cars with the Internet, provides drivers with personalized services such as real-time road conditions, accurate navigation, and rich entertainment, greatly improving the driving experience.

The application of these technologies not only provides automobile manufacturers with a new dimension of product differentiation, but also promotes cross-border cooperation between automobile and Internet, AI and other industries, broadening the boundaries of the automobile industry.

3. Lightweight and environmentally friendly technologies: pursuing efficiency and sustainability

Lightweight and environmental protection technology focuses on the use of lightweight materials such as high-strength steel, aluminum alloy, carbon fiber, as well as engine energy-saving and emission reduction technology, exhaust gas recirculation technology, etc., aiming to reduce the weight of automobiles, reduce fuel consumption and emissions, and improve the environmental performance of automobiles.

The application of lightweight materials has significantly improved the fuel economy and handling performance of automobiles, while the innovation of engine technology has effectively reduced environmental pollution.The progress of these technologies has helped automobile manufacturers cope with increasingly strict environmental regulations, enhanced the market competitiveness of their products, accelerated the research and application of new materials and processes, and promoted technological innovation in the entire industry.

4. Intelligent Manufacturing Technology: * Digital Transformation

Intelligent manufacturing technology, relying on 5G, industrial Internet, artificial intelligence, big data and other advanced technologies, is promoting the intellectualization and automation of the automobile manufacturing process.

The introduction of intelligent production lines, such as personalized customized production at Changan Automobile's Smart Factory, not only improves production efficiency and flexibility, but also meets the increasingly diverse needs of consumers.
The application of big data analysis can monitor production data in real time, discover and solve problems in a timely manner, thereby ensuring product quality and improving production efficiency.

The wide application of intelligent manufacturing technology not only accelerates the digital transformation of the automobile manufacturing industry, but also makes it possible for the industry to deeply integrate with the Internet, AI and other fields, opening a new era of automobile manufacturing.

03、 Challenges and coping strategies

The automotive parts industry, as a crucial link in maintaining the entire automotive industry chain, is currently facing both challenges and opportunities. Given the rapid advancements in electric vehicles, autonomous driving technology, and the Internet of Vehicles, the traditional automotive parts industry urgently needs to adjust its pace to meet the demands of emerging markets and achieve its own transformation and upgrading.

Challenges Faced by the Parts Industry

1. Rapid technological innovation

The popularization of electric vehicles requires component suppliers to quickly shift towards the research and production of new energy related products such as batteries, motors, and electronic control systems.At the same time, the advancement of autonomous driving technology has led to a surge in demand for high-precision components such as sensors, radars, and cameras, accelerating the pace of technological iteration and placing higher demands on the research and development capabilities and funding investment of enterprises.

2. Environmental regulations are becoming stricter

The increasingly strict requirements for energy conservation and emission reduction worldwide have prompted car manufacturers to adopt more environmentally friendly materials and production processes.Component suppliers need to comply with stricter emission standards, such as the EU's carbon emission regulations and China's "dual credit" policy, which increases production costs and makes technological upgrades more difficult.

3. Supply Chain Restructuring

In the context of globalization, the automotive parts supply chain faces dual challenges of complexity and uncertainty.
On the one hand, geopolitical tensions and trade frictions have led to increased supply chain risks; On the other hand, the increasing demand for electronic components and software services in electric vehicles and intelligent connected vehicles has prompted the supply chain to shift towards greater integration and intelligence.

4. Increased market competition

With the rise of automotive parts companies in emerging market countries, international competition is becoming increasingly fierce.These enterprises, relying on cost advantages and technological advancements, pose a threat to traditional markets, forcing existing enterprises to constantly innovate to maintain competitiveness.

Coping Strategies

1. Increase R&D investment and promote technological innovation: Component companies should continue to increase R&D investment, focus on key technology areas such as new energy and intelligence, and establish a technological innovation system. Accelerate technological upgrading and enhance core competitiveness through industry university research cooperation, technology introduction, digestion, absorption, and innovation.

2. Green transformation to achieve sustainable development: Actively respond to environmental regulations, adopt green materials and production processes, optimize product design, reduce resource consumption and environmental pollution. At the same time, explore circular economy models, such as the recycling of waste parts, to reduce production costs and improve resource utilization efficiency.

3. Optimize supply chain management and enhance resilience: Build a diversified and flexible global supply chain network, reducing dependence on a single market or supplier. Utilize digital technology to enhance supply chain transparency, strengthen supplier relationship management, and improve the ability to respond to emergencies. At the same time, consider nearshore outsourcing and localized production to shorten the distance of the supply chain and reduce logistics costs.

4. Strengthen brand building and expand international markets: While ensuring product quality, strengthen brand building and marketing to enhance international visibility. Take advantage of international cooperation platforms such as the "the Belt and Road" to actively explore emerging markets, participate in the formulation of international standards, and enhance the international competitiveness of Chinese auto parts brands.

5. Talent cultivation and introduction, building innovative teams: Emphasize the construction of talent teams, and cultivate a group of professional talents with interdisciplinary knowledge and strong innovation ability through school enterprise cooperation, vocational training, and other methods. At the same time, attracting high-level overseas talents to return to China for entrepreneurship or work injects fresh blood into the industry.

The continuous innovation of technology is driving the automotive parts industry to the forefront of the automotive industry and its future development direction.
Looking ahead to the future, the further integration and deepening of the trends of intelligence and electrification will not only effectively promote the automotive industry to move towards a new stage of high-quality development, but also bring convenience and intelligent experience to our daily travel.