Auto Parts Industry Market Status and Development Trend

With the acceleration of the globalization of the automotive industry, the division of labor between automotive Oems and parts companies is more clear, and the Oems focus on vehicle development and assembly, while the parts companies are responsible for research and development, procurement and production and other professional links. This division of labor not only improves production efficiency, but also reduces production costs. Many automotive parts companies are independent from vehicle manufacturers and gradually form a core competitiveness in specific areas, which has promoted the professional development of the industry.


The auto parts industry is developing towards high-end. With the continuous progress of automotive technology, the technical content of automotive parts is also constantly improving. The application of intelligent and automated technology makes the products more precise and efficient. For example, the promotion of autonomous driving, vehicle networking and other technologies requires higher technical levels and better performance of components. The application of new materials also improves the efficiency and safety of products, meeting consumers' demand for high-quality parts.


The market size of China's automotive parts industry is also expanding. According to statistics, the operating income of China's auto parts manufacturing industry reached 4,408.6 billion yuan in 2023, showing the vigorous development of the industry. 
The trend of the auto parts industry mainly includes the development of specialization, refinement and high-end, while the rapid development of new energy vehicles will also drive the demand for related parts.


Policy trend
In the next ten years, automobile exports and to the countryside will be the national policy trend to promote large consumption, according to the China Automobile Association data shows, that from 2020, the development of nearly three years of new energy vehicles to the countryside policy, it has led to a cumulative sales of more than 4.1 million, in the future, the figure will continue to grow.


Since 2020, the Chinese government has issued the "Medium and Long-term Development Plan for the Automobile Industry" and the "Regulations on the Management of Investment in the Automobile Industry", attaches importance to the autonomous development of core auto parts technology, and has successively implemented a series of policies and measures to support the development of the auto parts industry. Driven by the national industrial policy and the rapid development of the industry, China's auto parts industry supply system has gradually improved, and the industry market scale has gradually expanded.


In 2019 and 2020, there are seven Chinese companies on the Top 100 list, and in 2021, there are 8 China companies on the Top 100 list and 10 China companies on the list in 2022. In the 2023 list, there are a historic breakthrough of 13 Chinese enterprises. The data strongly proves that China's auto parts industry is booming, the future market space is huge.


Industry trend
Industry operations are more streamlined and specialized to improve production efficiency and reduce costs. In the case of global economic integration, vehicle manufacturers focus on the core links, reduce the self-production rate of parts, and hand over to professional enterprises to improve the degree of specialized division of labor and operational efficiency.


Automotive lightweight to promote the application of plastic parts continue to extend. At present, plastic parts replace metal parts with lightweight characteristics, "plastic instead of steel" has become a trend, the future with the extension of application， China's plastic parts market will have obvious room for growth.


Automotive companies will continue to divest parts business, focus on automotive design, core parts manufacturing and vehicle assembly based professional production mode, the remaining tens of thousands of automotive parts will be distributed to first, second and third level suppliers, the real realization of supporting supply relationship, for downstream suppliers is more likely to get orders trend.