By 2020, my country's traditional automotive cable market will be about 12.3 billion yuan, and the new energy automotive cable market will be about 1.35 billion yuan. With the steady growth of the market scale of my country's automobile industry and the gradual increase in the proportion of new energy vehicles, the scale of the automotive cable market is more extensive, and the industry development prospects are better.PART1. Development characteristics of the automotive cable industry
1) Backward performance of basic materials
The use of insulating materials is the key to meeting the requirements of automobiles and using automobile cables. Foreign-funded enterprises control the production formulas of critical raw materials such as PVC, XLPE, TPE, and other stabilizers currently used. The performance of materials produced by domestic-funded enterprises cannot meet the requirements for use. The backward version of basic materials limits the research and development of new automotive cables and increases the operating costs of enterprises.
2) The automotive wire and cable industry have solid regional characteristics.
Due to the long-term impact of the economic environment and regional conditions, my country's auto parts industry has formed regional differences. The distribution pattern of significant manufacturers has gradually become clear, showing a clustered state, mainly concentrated in six primary areas: the Yangtze River Delta region, the Pearl River Delta region, the Northeast region, the Beijing-Tianjin-Hebei region of the Bohai Sea, Central China, and the Southwest region. Among them, the largest in the Yangtze River Delta region has formed an industrial chain cluster with a multi-level support cooperation system centered on automobile manufacturers such as SAIC Motor. The cluster effect of the automobile industry chain can effectively improve the scale effect, optimize the allocation of resources, reduce transaction costs, production costs, and logistics costs, and achieve effective division of labor and cooperation between upstream and downstream enterprises. Therefore, the auto parts industry, including auto cables, has a strong regional character.
3) Relatively closed supplier system and strong customer stickiness.
Automobile and component suppliers have established a scientific and professional division of labor and collaboration system to develop the automobile industry. Car manufacturers, especially brand car manufacturers, have a close relationship with their suppliers. The selection process is meticulous and strict and has established long-term and stable cooperative relations with their respective suppliers, forming a relatively closed supply system. The automobile cable manufacturer
must enter the automobile wiring harness manufacturer
and the qualified supplier system of the automobile manufacturer. In addition to passing third-party tests by professional automotive cable standards
, they must also meet the unique technical requirements of automotive manufacturers
to become qualified suppliers. The certification process for qualified suppliers is very long, and the certification process is also very complicated. New suppliers usually need at least 2-3 years of certification before entering the vehicle manufacturer's supplier system. Generally, when a car manufacturer selects a specific type of automotive wiring harness supplier for a particular model, the cable supply source of the wiring harness supplier also needs to enter the vehicle manufacturer's supplier catalog, and the wiring harness manufacturer
needs to select the cable provided by the product catalog supplier. Otherwise, the vehicle manufacturer will not approve the line. Cable suppliers usually maintain a stable and continuous supply relationship after entering the supplier catalogs of wire harness manufacturers
and vehicle manufacturers. Even if car manufacturers update their models, they will prioritize the original car wiring harness manufacturer and its cable supplier as the designated supplier of the new model wiring harness. Therefore, there is a strong stickiness between automotive cable suppliers and automotive wiring harness manufacturers, and automotive manufacturers
4) The automotive cable industry has periodic and seasonal characteristics.
The development of the automotive cable industry is closely related to the development of the automotive industry. It is greatly affected by the macroeconomic situation, national policies, and the disposable income of residents and has a specific cyclical nature. With the improvement of the national consumption level and the development of urbanization, the automotive cable industry has entered a stable growth cycle. There are seasonal fluctuations in the production and sales of the automotive cable industry, and the seasonality is mainly affected by the downstream automotive industry. The second half of the automotive industry is the peak sales season, and downstream manufacturers will prepare enough raw materials for production before the peak sales season arrives. Therefore, the sales revenue of manufacturers in this industry is usually higher in the second half of each year than in the first half of the year.
PART2. Development prospects of the automotive cable industry
(1) National policy support
As one of the automobile parts, the automobile cable is an essential part of automobile electronic equipment and a critical part that affects the electrical performance of the entire vehicle. Various national ministries and commissions have successively formulated the "Medium and Long-term Development Plan for the Automobile Industry," "The 13th Five-Year Plan for the Development of National Strategic Emerging Industries", "Made in China 2025", and "Guiding Opinions." A series of industrial policies such as "Opinions on Accelerating the Merger and Reorganization of Enterprises in Key Industries," "Energy-saving and New Energy Automobile Industry Development Plan (2012-2020)", "Automotive Industry Development Policy" and other industrial policies have promoted the development of the automobile industry and the auto parts industry.
(2) The concentration of the downstream automobile industry continues to increase.
For companies in the automotive cable industry, the automotive industry has a high degree of attention, which means that cooperation with automotive manufacturers with a higher market share can obtain stable business orders. According to the China Association of Automobile Manufacturers statistics, China's automobile industry market shows a high degree of market concentration and is on the rise. From 2017 to 2019, the total market share of the top ten automakers increased from 88.52% to 90.38%. Among them, SAIC Motor's market share reached 23.95% in 2019, a slight decrease from 2018, but it is still in the leading position in the industry. In addition, in recent years, GAC Group and Brilliance Auto have developed significantly, and their market share has increased dramatically.
(3) Steady growth of market demand In recent years
, with the rapid development of the national economy as a whole, the level of national income has risen rapidly, and the consumption of automobiles has also risen sharply. My country's automobile production and sales have ranked first globally for many years, and my country's automobile production and sales have ranked first in the world for many years. Sales are far below the level of developed countries during the same period, and there is still a lot of room for improvement in domestic automobile consumption demand. The sustained and rapid development of the national economy will further drive the steady growth of the automotive industry, thereby increasing the market demand for the automotive cable industry.
(4) The transfer of industries to China has brought new development opportunities.
For many years, my country has been the country with the most significant automobile production and sales volume globally. With the rapid development of my country's auto production and sales, the international auto parts industry chain, including the auto cable industry, has moved to China, realizing localized R&D, design, display, and supply. The competitiveness of domestic automotive cable manufacturers
is gradually improving, gaining more and more market shares, and participating more widely in the global automotive division of labor and cooperation industrial chain.
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