Industrial policy has pointed out the right direction for parts and components industry
He Desheng, Executive Director of the Chinese Society of Automotive Engineers and Professor of Automotive Engineering at Beihang University, expressed his enthusiasm about the "Automobile Industry Development Policy," emphasizing that it provides a clear and forward-looking direction for China's auto parts industry. In an interview with reporters, he highlighted Chapter 8, titled "Components and Related Industries," as a pivotal section that sets the course for the development of China’s automotive components sector.
According to He, the chapter outlines three key directions: adapting to global industry trends, meeting both domestic and international market demands, and striving to integrate into the global auto parts procurement system. Although the term "domesticization" is not explicitly used, the policy reflects a strong emphasis on self-reliance and innovation. He noted that this approach is more comprehensive, open, and aligned with the historical development of China’s auto industry than previous concepts like "domesticization" or "real estate."
He further explained that the current situation calls for a strategic shift. The first step is for China’s auto parts industry to actively participate in the development of整车 (complete vehicles). This integration is crucial for upgrading the industry, as high-quality components are essential for building high-performance vehicles. However, even with advanced parts, vehicle performance depends on how well these components are integrated and matched. For example, some domestically produced cars use top-tier foreign parts but still fail to deliver optimal performance due to poor coordination between design and component compatibility.
To address this, the auto parts industry must work closely with整车 manufacturers, ensuring synchronized development. He pointed out that there is still a significant gap between China and developed nations in this regard. Chapter 8 also emphasizes the need for substantial professional and foundational research, especially in high-tech areas such as electronic fuel injection systems, airbags, ABS, and new energy engines. China must develop systematic capabilities for key components, provided by specialized companies in a modular and structured way—similar to practices in developed countries.
Additionally, for general parts and components, production must meet international standards, establish efficient production lines, improve quality, reduce costs, and eventually enter the global procurement system. He also mentioned that Chapter 8 redefines the government’s role in the industry, shifting from a traditional management model to one that supports integration into the international supply chain. This aligns with WTO principles and signals a more open and competitive environment for the auto industry.
Regarding related industries, He stressed that their development is critical for the growth of China’s automotive sector. He pointed out that while automotive technology has lagged behind market demands, related industries have developed even more slowly, creating bottlenecks. The issue lies not in lack of willingness but in poor coordination between sectors under the current administrative structure.
By positioning the auto industry as a national pillar, Chapter 8 highlights the need for coordinated national planning and support. He concluded that if all stakeholders implement the policy effectively, China’s auto parts and related industries will experience significant growth and transformation.
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