Analysis of the Current Situation of Parts Procurement Management in the Automotive Industry

(1) Comparison of Automotive Parts Procurement Management
Whether China's automobile manufacturing industry can truly become a pillar industry with global influence depends on the development of the automotive parts industry. Without a strong and globally competitive automotive parts procurement management system, China's automotive manufacturing industry will find it difficult to have an international competitive advantage.
After decades of transformation and adjustment, China's automotive parts industry is shifting towards a modern enterprise form of wide series and integration. Its domestic market supply has also entered a relatively abundant surplus from shortage, and a small number of parts products have been exported to foreign markets.
However, the global automotive parts industry is also rapidly developing. Compared with the procurement management of automotive parts in developed countries, there is a huge gap in the procurement development mode and key links of the procurement system in China's automotive parts procurement management. The specific manifestations are as follows.
1. Comparison of Procurement and Development Models for Automotive Parts
At present, there are basically two procurement and development models in developed countries in the automotive industry, namely the Japanese model and the European and American model.
(1) The Japanese model based on subcontracting cooperation
The self-made rate of components in Japanese automobile manufacturing companies is low, averaging only 30%, while the remaining 70% is purchased from component companies. Japanese car manufacturers conduct dynamic evaluations in the early stages of determining car design drawings, based on factors such as component prices, the design and development capabilities of component manufacturers, and long-term improvement capabilities, and select component suppliers in the early stages of development.
There are numerous Japanese automotive parts companies with varying scales. In order to organize different automotive parts companies, Japanese companies mainly adopt a multi-level subcontracting system. According to three situations: integrated parts, slightly processed composite parts, and simply processed parts, the parts companies are divided into first level parts cooperative enterprises, second level parts cooperative enterprises, and third level parts cooperative enterprises. After layers of subcontracting, the parts of each level of parts companies are finally centralized to the vehicle manufacturer for final assembly, forming a pyramid shaped multi-level interactive vertical, cooperation based division of labor and subcontracting model.
Through this organizational form, major automobile companies have formed their own automobile parts supply and procurement systems and extensive collaborative networks, and automobile parts enterprises can join the collaborative networks of major automobile companies for long-term stable supply.
(2) The European and American model based on market competition mechanism
The characteristic of the European and American model is free competition and selective selection. The European model, represented by Germany, maintains an independent contractual relationship between automobile manufacturing companies and parts companies. The procurement of automobile parts is completely free and not constrained by automobile parts factories. At the same time, parts companies can independently develop new products for automobile companies to choose from, achieving their own development.
The typical practice in the United States is to conduct bidding based on detailed drawings, mainly ordering from multiple component manufacturers based on the bidding price. The responsibilities of automobile manufacturers and parts factories are clear, and automobile parts enterprises and automobile companies are in a completely equal position.
European and American car manufacturers also rely more on external independent parts suppliers for their demand for automotive components.
Component manufacturers are no longer solely responsible for processing incoming materials, but must take full responsibility for product design, manufacturing, inspection, quality assurance, timely supply, and market services. At the same time, automobile manufacturers are gradually reducing their direct supply sources and minimizing the number of supporting factories involved in direct transactions, forming a "pagoda" shaped supply system.
First level supporting factories provide system services to automobile manufacturers in the form of assemblies rather than individual components. At the same time, they share some of the administrative management functions of automobile manufacturers, manage and coordinate second - and third level cooperative manufacturers.
(3) Procurement and Development Model of Automotive Parts in China
The procurement and supply model of automotive parts in China: Initially, the parts factory, as a core member of the automotive group, became a wholly-owned subsidiary of the automotive manufacturing plant to meet the procurement and production needs of the automotive manufacturers.
These directly affiliated professional production enterprises generally have technical development and design capabilities. Automobile manufacturers provide technical parameters and usage requirements based on the models they produce and develop, and component companies organize mass production of the required products, which is equivalent to ordering production.
At present, there are over 100 automobile manufacturing plants in China, but only a few have an annual output of over 100000 vehicles. Around every large automobile manufacturing plant, there is a vertically distributed single supporting system composed of a large number of component production enterprise groups, such as the component supporting systems of FAW and Dongfeng, which are composed of thousands of component enterprises.
The procurement and supply model of automobile parts in China is basically centered around automobile procurement enterprises, with multiple layers of parts supply enterprises surrounding them. The center is automobile production and procurement enterprises, the second ring is core parts production and supply enterprises, the third ring is backbone parts production and supply enterprises, and the fourth ring is cooperative enterprises. exist
Secondly, the automobile manufacturing enterprise fully controls the core component enterprise and enjoys complete control over it. The automobile manufacturing enterprise controls the specifications of the components and purchases the required products from the core component enterprise.
In the third ring, automobile manufacturing enterprises control and manage backbone component enterprises through equity participation and controlling, and deploy the production activities of backbone component enterprises as a whole to purchase the required products. In the fourth stage, backbone component enterprises and collaborative layer enterprises engage in procurement and supply related activities through contractual relationships.
In this "dependent" model dominated by automobile accessories, automobile manufacturing enterprises must have a large department responsible for the management, control, and coordination of procurement and supply. This not only results in low efficiency but also high operating costs, which are ultimately passed on to the prices of automobiles, causing automobile sales to lose market competitiveness. With the establishment of a market economy and the intensification of competition, this system of matching a certain vehicle system is being broken.