Interview guests:
Association representative:
Dr. Chen Yilong Director, Asia Pacific, AIAG, US Automotive Industry Action Group, Chief Representative in China
Chinese supplier representatives:
Zhang Yang Deputy General Manager of Tianrun Crankshaft Co., Ltd. and Minister of International Trade
an expert:
Wenkai Chen CEO of Gasgoo
Moderator: Many auto manufacturers now include parts and components companies. Most of the components are purchased globally. What are the reasons behind the concept of “global procurement�
Chen Yilong: Global procurement, speaking of time is not short. However, it became a trend after 2001. According to the survey, 70% of companies in the automotive industry want to go to China to purchase. Therefore, China occupies a very important position in global procurement.
Chen Wenkai: But global sourcing is actually a new thing and it will not exist for a long time. Because of the procurement of automakers, there is generally a close relationship with suppliers because it involves the cooperation of R&D and logistics. General automobile manufacturers will not easily change suppliers. Nowadays, the three major automakers in North America have come to China to find new suppliers. This is in itself a change to the original stability. But once China stabilizes, it will not change easily. Therefore, global procurement will not exist for a long time.
Moderator: What products are China buyers more enthusiastic about?
Zhang Yang: At present, the buyers are relatively big in terms of technical content is not very high, easy to process such a product.
Moderator: For domestic suppliers, in the face of so many procurement giants in the world, do you have such heart preparations?
Zhang Yang: For China's internal combustion engines, as well as auto parts companies, well-made companies will have their own overseas strategy, and everyone is actively looking for opportunities. For us, because our domestic market also has very strong growth, we must seize the orders at our doorsteps; for OEM orders abroad, we must choose meaningful strategic partners to look for a long-term commitment to our corporate technology and management. Develop useful partners.
There is also a problem, because the current global procurement is mainly OEM-based, while the OEM's equipment and production stability, technical content requirements are very high. Due to the quality concept of our Chinese people and our equipment, there may be a big gap with our foreign counterparts. This faces the problem of investment investment. Therefore, the international market is currently a trade-off issue for us.
Chen Wenkai: Zhang Quan’s statement represents a gesture that many Chinese suppliers are now buying globally. We have experienced this very deeply. Now that China's very good suppliers are the main targets for international buyers, they are very tight in order to meet the needs of domestic automakers; this category of suppliers is currently in China. It is that “the emperor’s daughter does not marry†and they face the question of “selection†when facing cross-border purchases.
Moderator: I would like to ask Dr. Chen. When a very good supplier in China does not eat the meat that you purchase internationally, how do you do it?
Chen Yilong: There are still many companies that really want to export. Because many companies also recognize that from a long-term perspective, to be bigger and stronger, to OEM support is a good opportunity. On the one hand, OEMs are relatively high in terms of quality, logistics, and e-commerce. If you can match them, you are in a very good position for your competitors. On the other hand, to win the supply contract of OEM large manufacturers, it means a long-term strategic cooperation.
Chen Wenkai: In fact, the global procurement situation is relatively complicated and the surface is prosperous but there are actually few results. For example, Zhang Zong would find this situation: Our company has visited several international buyers almost every month, but as the general manager of international marketing in this area, he will find that there are no results for two years. There is no single list. Why do people often come to visit, that is, there is no result? From the buyer, they may also have problems.
Moderator: I would like to ask Zhang Zong, is it like that as President Chen had just said, every day people come to blind date, but no one really can set it down?
Zhang Yang: There are several situations. One is our own target market. We have targeted development strategic partners. This time is our main offense. The other situation is passive. Basically, some well-known international companies visit us every month. However, some of the products they purchase are mature products, and some are new products. For the development cycle of a new product, the first time is relatively long, and the requirement for early stage investment is relatively high. For mature products, there will be some differences from the understanding of everyone's craftsmanship to engineering product capabilities. There is another very important idea. Everyone has a different concept of logistics. A large part of Chinese companies think that transporting goods to the port is equivalent to handing it to foreign businessmen. My task has already been completed without considering my What will happen to products in Western vehicles? In this regard, some domestic companies have also suffered losses in this area. Therefore, everyone has adopted a more cautious attitude.
Moderator: Mr. Chen, you are the intermediary between the buyer and the supplier. What kind of efforts can be made as intermediaries to improve their current communication problems?
Chen Wenkai: Some of the difficulties that I just said about global procurement are reflected in many aspects. What the two people just said is how to make suppliers meet the requirements of buyers after both parties are already familiar with it. The vehicle manufacturer is very worried. He went to China to purchase. After he had finished looking for the supplier, he had to do quality improvement, process improvement, and initial supply after the supplier had finished the supply. After the problem occurred, how could he help afterwards? He changed. In fact, I know that many quality engineers, including the U.S., and Europe’s buyers, will help them improve their products and technologies from the supplier's factory. This is a common phenomenon. In addition, in terms of logistics, it is basically centralized by the vehicle manufacturer instead of being transported by the supplier to North America. He may find a third-party logistics agency to integrate the logistics of all Chinese suppliers. These are all vehicle manufacturers and buyers are worrying, so Chinese suppliers are very fortunate during this time. As a middleman, what we are mainly doing now is the first level of service, which is information service. A large number of buyers he wants to come to China to find a suitable matching supplier, but in the vast sea he may not be able to find Zhang, and such outstanding young man as Zhang and companies such as Tianrun are emerging. We help buyers and suppliers do a lot of matching work.
Moderator: So you are a matchmaking agency.
Chen Wenkai: Because China's supply market is changing rapidly, new suppliers emerge every year. Every year, some of the original suppliers become more outstanding suppliers. In this way, for the buyer, he needs to quickly find a supplier that is suitable for him, which may consume a great deal of time and labor costs. As for the suppliers, Zhang Zongang just said that they also have to make a choice. In the end, what kinds of buyers are most suitable for me. At this time, we will first help the two parties match well at the information level. To put it plainly, we are playing the role of a bridge in the middle.
Moderator: The products provided by our country's suppliers are always saying that the price is cheap and it seems that this is where the core competitiveness lies. Have you ever thought of improving other competitiveness besides price?
Zhang Yang: When we make quotation, we usually leave a reasonable profit margin for ourselves. Many of our things are calculated based on the data suitable for the development of the Chinese market. Many buyers will place some of the international general profit margins on Chinese purchasers. Their patience and education with Chinese suppliers is slightly worse. I hope buyers can tell me how their market is formed. They need me how to comply with their market rules and how to serve them. Because we are also facing the fact that China’s human resources are becoming increasingly scarce and costs are increasing, how can we also find profit growth points? Service is an important point, so I’m thinking about how to better serve our customers; but In this regard, our communication of information is too little.
Moderator: Mr. Zhang said that the purchaser needs more patience. Do you have such patience?
Chen Yilong: I think it's still hard to say anything. But I think what Zhang always said is very correct. That is, we should communicate more. Among the many things, only we must establish a good communication channel, and we must think twice about the other side. In this case, we must do a win-win situation. .
Moderator: How will the future global procurement trend go? Please share with us.
Chen Wenkai: Predicting the future is a difficult thing. Judging from the current stage, global procurement has encountered certain challenges in China's practice. The main reasons include the relatively rapid appreciation of the renminbi, which has appreciated by nearly 8% since the opening exchange rate; and the export tax rebate rate of some products has also declined; there is also a high expectation of the buyer's own previous expectations of China, but in practice, Many do not meet their expectations, so they are also lowering their expectations.
However, as a whole, because China's vehicle market will continue to grow, Chinese parts suppliers are improving their management capabilities and there is still much room for cost reduction. Eventually, China will not become a global manufacturing center for auto parts. The change, that is, the situation where global procurement is mainly concentrated in China will not change.
Another trend, from the aspect of procurement, is that with the rise of the overall management capability of China's suppliers and the formation of economies of scale, it is originally not advantageous and products with relatively high technological content may also be included in the buyer's field of vision. .
The automotive industry is destined to be a globalized industry. Domestic companies must adapt to globalization in order to become bigger and stronger. If a multinational buyer finds you, it will bring you from a local supplier to an international supplier, and you may become an international large company. This kind of opportunity must be well managed by Chinese suppliers.
Even if the current buyers come and visit frequently, there is no result at all. In fact, it is a good opportunity for the supplier to learn because he represents the needs of the buyer to communicate with you in the process. Where suppliers can know where they are lacking, where they need to improve and improve; when you really meet the requirements of big buyers, many buyers will naturally come to your door. Suppliers must grasp such an opportunity, even if it is annoying now, do not refuse.