Top 100 parts list released, 15 Chinese faces


Zhang Dongmei


On June 23, the United States Automotive News released the Top 100 global auto parts Supplier list for 2024. There are three notable changes to this year's list. First, there are two more Chinese companies on the list, namely Guoxuan Gaoke and Sanhua Steam Zero, bringing the total number of Chinese companies on the list to 15. Second, Ningde era was promoted to the fourth place, second only to Bosch, ZF and Magna, the three traditional international components giants. Third, with the strong recovery of the major global automotive markets in 2023, the performance of most parts suppliers has been stable.


However, it is worth noting that the slowdown in demand for electric vehicles in Europe and the United States has put pressure on suppliers who have accelerated their transformation, while the ongoing "price war" has also put pressure on Oems, and the pressure has been transmitted to suppliers.



Guoxuan High-tech and Sanhua Steam zero list


It is understood that the United States Automotive News since 2005 began to publish the top 100 global auto parts suppliers, according to the suppliers provided in the previous year in the automotive industry supporting market business operating income (sales) ranking. In recent years, the number of Chinese enterprises has been increasing, from 2020 to 2024:7, 8, 10, 13, 15. It can be seen that the business expansion and progress of Chinese parts and components enterprises.


Specifically, the 15 Chinese companies on this year's list are: Ningde Times (No. 4), Yanfeng (No. 15), Joyson Electronics (No. 40), Beijing Hainachuan (No. 48), CITIC Decca (No. 49), Ningbo Huaxiang Electronics (No. 70), Johnson Electric (No. 72), Guoxuan High-tech (No. 73), Desay Siwei (No. 74), Minth Group (No. 77), Noble Automotive Systems (No. 80) Top), Ningbo Topu (81st), Jingcheng Engineering (87th), Anhui Zhongding seals (89th), Sanhua Steam Zero (100th).


As a power battery supplier, Guoxuan Gaoke and Sanhua Steam Zero, which focus on thermal management of new energy vehicles, are new faces this year. Obviously, their inclusion on the list has a lot to do with the rise of China's new energy vehicle industry. Among them, Guoxuan High-tech, which has been invested by Volkswagen Group, has expanded rapidly in domestic and overseas markets in recent years, and its revenue has shown a rapid growth trend, increasing by 37% year-on-year to 31.6 billion yuan in 2023, most of which comes from the automotive sector. Sanhua Auto Zero is mainly engaged in automotive thermal management system parts business, in recent years, China's new energy vehicle sales continue to rise, with the increase in the number of thermal management system parts, performance and complexity, the demand for related parts suppliers further expanded.



Most suppliers achieved positive growth


From the perspective of revenue, with the recovery of major global automotive markets in 2023, most parts suppliers have achieved positive revenue growth. The average automotive business revenue of the 100 suppliers on this year's list increased by about 9% year over year. Among them, the Bosch Group remains the world's largest automotive parts supplier, with 2023 automotive segment revenue of nearly $56 billion, up from nearly $50.5 billion in the previous year. This is mainly due to its good performance in both conventional fuel vehicles and electric vehicles.


Fellow German parts supplier ZF is in second place, with 2023 automotive segment revenues of nearly $50 billion, up from $42.1 billion the previous year. "2023 is a year of big decisions for ZF in a number of areas." Zf CEO Kohli said. In the same year, ZF decided to merge the Passenger Car Chassis Technology and Active Safety Technology divisions into a new integrated Chassis Solutions division, which was completed earlier this year. A spin-off of the Passive Safety Systems division has also been initiated, with the possibility of a full or partial sale or initial public offering in the future. In addition, ZF has established a passenger car chassis systems joint venture with Foxconn.


As for Magna, the largest parts supplier in North America, revenue in 2023 was $42.8 billion, up 13% from the previous year; Net profit jumped 105% to $1.2 billion. Magna's operating results are primarily dependent on customer production of passenger cars and light trucks in North America, Europe and China, all of which saw production growth in 2023.


China's Ningde Time, which supplies batteries to many mainstream car companies, rose to fourth place thanks to global growth in electric vehicle production and sales. According to South Korean research agency SNE statistics, in 2023, the Ningde era power battery market share in the world reached 36.8%, ranking first in the world for seven consecutive years.


In contrast, Denso's revenue declined year on year, and it was the only company in the top 10 or even the top 15 that experienced a decline. After it, the decline is ranked in 17th BASF, 21st BorgWarner, 50th Toyota Synthetic and so on. Overall, the decline is a minority, most companies in 2023 performance is still more optimistic.



The "inner coil" pressure is transmitted to the supplier


Of course, behind the general rise in the revenue of parts suppliers in 2023, there is also a series of hidden worries. The cooling of the electric vehicle market in Europe and the United States is not friendly to those parts manufacturers who are "too hard" in electric transformation, and BorgWarner is a typical example of failing to achieve the promise of electric breakeven in 2023.


Stefan Hartong, head of Bosch, believes that internal combustion engine cars will still be needed for decades to come, and that it will take at least 30 to 35 years to electrize all vehicles in the world. In addition, as of now, most Oems' electrification business is still at a loss, and in order to reduce the cost of electric vehicles, they choose to cut parts and logistics costs, which adds uncertainty to the supplier's electrification strategy.


In particular, entering 2024, the price war is intensifying, the internal volume is intensifying, and the direct impact on parts suppliers. At the 30th anniversary celebration of its entry into China in April this year, Zhou Song, president of Valeo China, pointed out that with the great changes in China's automobile industry, the "price war" is passed from the OEMo factory to the upstream supply chain, and auto parts suppliers are facing huge cost pressure.


In May this year, the reporter participated in an industry closed-door forum, a foreign parts giant Chinese executives joked that Oems are fighting a price war, but at the expense of innovation and product performance, sometimes encounter some extreme examples, oems customers directly ask for price cuts, "not 5%, not 10%, not even 20%, higher, And it is very simple to drop, there is no other room for bargaining, not to drop it will face the future of new projects can not get, very simple and rude."


Also in May, Ford sent a memo to its electric vehicle parts suppliers calling for cost reduction initiatives to work together to reduce vehicle production costs to support the company's electric vehicle business to become profitable. Ford's electric car business continues to lose money.


In addition to the pressure to reduce costs, Stellantis Group CEO Don Weiss recently proposed to give up some parts suppliers and produce their own auto parts in order to reduce the high cost of electric transformation. For some suppliers, this is obviously a bad news, meaning that orders will disappear directly.


In an interview with foreign media, Hartong expressed a pessimistic judgment on the future: "In the next one to two years, the company will be difficult to reach the expected sales and profit targets." 2024 is going to be more difficult than expected, and probably 2025 as well." That may now be a prophecy.


China Automotive News, June 25, 2024