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Chinese auto parts supplier margins declined for five consecutive years

 In the past 10 years, the Chinese automotive suppliers and European automotive suppliers in other markets than in the profitability has been in a dominant position, the average profit margin is much higher than other countries supplier. But the trend was in the first quarter of this year, has undergone great changes , the global business consulting firm Platinum Arrow report released yesterday showed that China's auto parts enterprises in the first quarter, the average profit margin of 5.8% , basically , Europe and America automotive supplier market profits flat.

 Chinese automotive suppliers in the average profit margin continued to decline over the past five years , the average profit margin in the first quarter of this year was 5.8 percent, compared to 10.8% in 2009, down more than 40% . Arrow Platinum Director Li Lihua told the " First Financial Daily" reporters: " China Automotive Supplier average profit margin downward trend is not optimistic , it is possible to maintain and Europe and other mature markets like automotive supplier margins ."

 Li Lihua said the Chinese automotive supplier average profit margin decline is due mainly to two aspects . First, the car price competition between suppliers , automotive manufacturers will car sales as part of a price war cost pressure shifted to automotive suppliers head every year for automotive suppliers to submit an annual price requirements. Another reason is the automotive supplier 's capacity utilization is not high , to accept 70% of surveyed executives said the automotive supplier automotive supplier capacity utilization of less than 80% , less difficult to reduce the size of the automotive supplier 's production costs.

 Europe and other mature automotive markets relatively high degree of integration , from 5% of the automotive supplier to provide over 80% of the entire vehicle market products, but China 's auto market supply is relatively fragmented. Local governments based on local GDP and tax and employment pursuits, different brand system supplier system are dispersed , which indirectly led to the production of automotive suppliers insufficient scale .

 The largest domestic automotive suppliers Huayu Automotive General Manager Zhang Haitao deeply felt. " Chinese domain car is also facing the challenge of local factories , local governments for regional production requirements, hope Huayu Automotive in local factories , but now the car manufacturers is relatively fragmented , we also need to weigh the investment income in the local factories ." Zhang Haitao told reporters .

 Future automotive suppliers to achieve double-digit sales growth , the biggest challenge is the increasingly fierce price competition , as well as vehicle demand continues to slow down. Automotive suppliers to gain more market share , first penetrated into new models or new market segments, while the car maker reported that competitive pricing .

 However, intense price competition will further deteriorate the living environment of automotive suppliers . Arrow platinum survey showed that 76.7 percent of respondents said the price competition is the most serious challenges in 2013 , compared to last year , 54.2 percent of respondents expressed concern about price competition .

 Meanwhile, the Chinese automotive suppliers have to face the leading car manufacturers "Super Platform" policy challenges . "Super- platform " refers to the leading car manufacturers in order to reduce production costs as well as the complexity of the manufacturing process can be done in the same platform producing one million cars.

 Platinum Arrow managing director Roman said: "The 'super platform ' will change the rules of the game industry , the automotive suppliers have to increase investment, with global OEMs to establish a closer relationship to continue to OEMs manufacturing platform to provide spare parts , but for now, super platform strategy for the Chinese automotive suppliers is spread news, China has not greeted well, has not established a global distribution, as well as large platform solution, some models of vendors lose some market share . "

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