Automotive Parts & Accessories Enterprise Guild Wars Midwest

Automotive Parts & Accessories Enterprise Guild Wars Midwest In recent years, the Midwestern automobile market, which has continued to rise rapidly, has allowed major car companies to change their strategies. At present, the second and third tier markets represented by the central and western regions are becoming new growth points for enterprises, while foreign brands, joint ventures, and local brands all focus their efforts in the next few years on the expansion of second- and third-tier networks such as the central and western regions.

In the past 2012, many car companies have thrown out plans to expand production in China to meet the high growth of the next round of the auto market, and the Midwest region has become the first choice for global car manufacturers to expand production.

Expansion of production in the central and western regions On April 16, 2012, Changan Suzuki’s second plant officially laid a foundation in Banan District, Chongqing, with a total investment of 2.3 billion yuan. After the completion of the first phase, it will achieve 100,000 complete vehicles and 100,000 engines. The annual production capacity was officially put into operation at the end of 2013.

On May 28, Shanghai Volkswagen’s Xinjiang plant officially laid the foundation. The project will initially invest 170 million euros (about 1.4 billion yuan), and the first phase will have an annual production capacity of 50,000 vehicles, and it is expected to start production in 2015.

On June 6th, the fourth base of Shanghai General Motors officially settled in Jingang New District, Jiangxia District, Wuhan City. The total investment in the first phase reached 14 billion yuan, forming an annual production capacity of 300,000 vehicles. It is expected that it will be put into production in 2014.

On August 27th, the Changan Ford Mazda Automobile Chongqing base expansion project with an investment of 600 million U.S. dollars (about 4.8 billion yuan) was officially started. After the completion of the Chongqing passenger car base, the total annual production capacity will increase by 350,000, and the first new car is expected to be completed. It went offline in the second half of 2014.

On November 28, SAIC-GM-Wuling announced that the third base project was formally settled in Chongqing International Automobile City, Liangjiang New Area. The first phase of the project investment plan was 6.6 billion yuan, and it will build a production base with an annual output of 400,000 complete vehicles and 400,000 engines. It is expected to be completed and put into operation in 2015.

On January 8, 2013, Sichuan Hyundai Motor Co., Ltd., established by the joint venture between Nanjun Automotive and Hyundai Motor Co., Ltd., was officially unveiled. The first phase of the company's total investment was 5.4 billion yuan. The new plant will be completed and put into operation in June 2014. An annual production capacity of 160,000 commercial trucks, 10,000 commercial buses, and 20,000 heavy-duty engine production capacities that meet Euro IV emission standards are established.

Judging from the above long list of projects, from the end of this year to 2015, the production capacity of over one million vehicles and hundreds of thousands of engines will be formed in the central and western regions, and this series of expansion projects will be completed. Behind this is the enthusiasm of the major car companies to seize the future market.

“We believe there is great potential for car sales in western China,” said Christian Kolingler, sales director of Volkswagen AG. “The new plant in Xinjiang is just part of our strategy to move to the west.”

The Xinjiang plant is not only the first time for Shanghai Volkswagen to invest in the country in its national layout, but it is also the first car production and manufacturing project introduced in Xinjiang. The future public Xinjiang plant will mainly produce small and medium-sized products suitable for the western market. Market analysts said that after the establishment of a new factory in Urumqi, Xinjiang, the public may further increase investment in western China.

Competition in the secondary and tertiary markets has intensified In fact, it is not only the Volkswagen family that is critical to seizing the commanding heights of future competition.

When interviewed by the media earlier, Chen Hong, chairman of SAIC-GM-Wuling, also stated that in the recent years, the Midwest has become the fastest growing regional market in China’s auto market. In the future Midwest, due to the large population base and large economic aggregates, the number of cars will remain. The generally low, rapid growth and other characteristics will undoubtedly become another driving force for the development of China's auto industry. The location of the new base of SAIC-GM-Wuling for a period of two years was finally determined to be located in the central and western regions. It is also the future of the Midwest market.

"We expect this year's sales volume to reach 1.4 million units, and the production capacity is currently not fully met. The two bases in Liuzhou and Qingdao before us allowed us to achieve a north-south linkage, but in the future, the potential for mini-vehicles in the central and western markets is even greater. Therefore, we need to establish a production base in the west to meet local needs.” Liang Xiaodong, manager of SAIC-GM-Wuling, also told the reporter of the “First Financial Daily” that the location of the third base is mainly based on consideration of the national production capacity layout. The settlement of the base in Chongqing will enable SAIC-GM-Wuling to form a joint production pattern in the north, south, and mid-west regions.

At present, the average coverage of SAIC-GM-Wuling nationwide is 50%, but the Midwest is a relatively weak region. Therefore, strengthening the excavation in the Midwest region will be the focus of the company's future development. In addition, SAIC-GM-Wuling Liuzhou Base currently has an annual vehicle production capacity of 800,000 vehicles. After the completion of the second phase expansion of the Qingdao plant last year, the annual production capacity of the vehicle has increased to 500,000 vehicles. Together with the 400,000-year production capacity of Baojun Base, which was formally completed and put into operation on November 18 last year, the total capacity of SAIC-GM-Wuling is currently 1.3 million units, which is 700,000 units from the scale of 2 million units in 2015, and that of the third basement The completion will help SAIC-GM-Wuling to achieve a production capacity of 2 million at the end of the 12th Five-Year Plan.

For the recent car manufacturers competing in the expansion of production lines in the central and western regions, the Deputy Secretary-General of the National Passenger Vehicle Market Information Association, Cui Dongshu analyzed that although in the past, the mid-west and other secondary and tertiary markets were the main positions of domestic independent brands, but in recent years, many manufacturers In order to increase the layout of the western market, with the continuous exploration of joint venture brands and luxury car brands, under the combined effects of many policy guidance and market demand orientation, the secondary and tertiary markets represented by the central and western regions will become the future development of automotive companies in China. The top priority is that competition in the second and third-tier markets is also becoming more and more intense.

After FAW-Volkswagen announced in 2011 that its fourth factory had settled in Foshan, Baosteel Group also invested RMB 500 million in Foshan to build a steel logistics processing and distribution project. The project is scheduled to start production in January 2013. Last year, FAW-Volkswagen signed contracts with 25 core component suppliers and auto logistics distribution companies such as FAW-Five and Denso. According to FAW-Volkswagen's plan, FAW-Volkswagen will have 37 key components to achieve local production in Foshan, involving more than 50 suppliers.

Not only does FAW-Volkswagen's newly built factory have a large number of spare parts companies around it, but there are about dozens of companies around Shanghai Volkswagen headquarters, Shanghai Anting, Dongfeng Automobile Base Camp Wuhan Zhuankou, Chongqing Chang'an, and Changan Ford Mazda Auto Base Chongqing. Hundreds of auto parts companies. Shanghai General Motors also began to attract investment in spare parts companies around Wuhan's newly built factory. It is also a competitive advantage for spare parts companies to follow the pace of investment and construction of local automobile companies and implement localized production.

"The expansion of spare parts companies and the expansion of vehicle manufacturers' production capacity are a kind of synergistic relationship. In particular, the expansion of production capacity of mainstream automobile manufacturers can always drive a large number of auto parts companies. However, whether the parts and components companies are manufacturing locally with the expansion of vehicle companies. Also depends on spare parts company's original factory capacity reserves and parts and components to reach the new factory's logistics and transportation costs." A large auto parts company responsible person told reporters.

As the OEM accelerates its entry into the Midwest, the parts and components companies are also accelerating their pace of entry into the Midwest.

One month after Delphi Pak Chengdu, the company's first manufacturing base in the western region, started construction in September last year, Delphi Pike Chongqing Branch, the second manufacturing base in the western region, also started operations. “At present, we are constructing two automotive wire harness production bases in the western region to ensure rapid response to customer needs and provide localized support. The Chongqing company mainly supplies Changan Ford Mazda, Volvo and Jiangling Ford.” Delphi Packard Electronic/Electrical Systems Mr. Aibo Bin, President of the Business Department and President of Delphi Asia Pacific said.

From the perspective of the company's strategy, the size of automakers' expansion of production capacity will determine whether auto parts manufacturers will follow closely. The different types of auto parts and components also determine to a certain extent whether the parts manufacturers should adopt localization strategies in a timely manner. “Some car interior parts such as steel cutting, car seats, car dashboards, and car lights need to be coordinated with the pace of expansion of car manufacturers in order to localize production. The relatively large single volume of these interior parts requires localized production. This is not only more efficient, but also the cost of its logistics and transportation is much higher than the investment in fixed assets for local investment and construction, said the person in charge of the above-mentioned automotive parts and accessories companies.

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