The term globalization is often mentioned in many articles about cars. In our impression, globalization is the simultaneous introduction of the latest foreign models and technologies to the domestic market, and consumers can enjoy new products overseas for the first time. However, in this epidemic, we have also seen the other side of globalization. In addition to the emergence of imported cases in various parts of the world, automobile companies also stopped production due to the epidemic.

Many internationally well-known parts and components brands have invested and set up factories in China to produce parts and components. However, due to the epidemic, some enterprises are in a state of shutdown; the enterprises that have resumed production and are still difficult to meet expectations in terms of production capacity. As the period of non-state change becomes longer, the shortage of parts and components will gradually affect car companies that set up factories overseas. For example, Hyundai Ulsan, Kia Motors, and the joint venture Renault Samsung plant in South Korea have ceased production; the same is true of Nissan ’s Kyushu plant; and Fiat Chrysler Automobiles, as far as Europe, also said that parts inventories are in an emergency due to Chinese parts factories.

Seeking maximum profit is the core of the market economy, although "maximum" is just a relatively dominant choice among multiple choices. The same applies to the automotive industry. Automobile companies, through cooperation with parts suppliers and through large-volume purchases, can get room for compressing operating costs. Naturally, parts suppliers also measure and judge the advantages and strengths of different regions around the world, and then choose to invest in building factories to reduce production costs and expand the local market.

In addition, China's auto market is currently the world's largest auto market, including new cars, auto parts, spare parts and other upstream and downstream market shares. Car companies are willing to put production resources on the Chinese market, which has a positive impact on reducing transportation costs, reducing labor costs, and shortening the time of parts deployment. It is because of these factors that more parts companies choose to put into production in China.

According to data from the Japan International Trade Center, Japanese auto companies use more than 30% of China-made parts. The value of auto parts imported from China in 2019 is about US $ 3 billion. Turning the perspective to European and American auto companies, the dependence on Chinese parts has also risen to about 20%. The supply pressure of Chinese parts and components is no longer simply limited to the supply shortage of first-tier suppliers. Since some products need to undergo subcontracted production two or more times, the shortage pressure has gradually involved the entire supply network.
Only one assembly of more than 1,000 parts can produce a car, and the number of suppliers among them is hundreds of thousands. How to effectively manage suppliers is one of the problems of automobile manufacturers. After the success and promotion of the "just-in-time" production model, many car companies have begun to improve their production management methods, gradually reducing the inventory of parts and components during production management. Such a production method is naturally a highly efficient production method when the market demand is strong; one of the main points of the "just-in-time" method is to ensure that the required parts are not defective, so after selecting a good supplier, the manufacturer basically There will be no changes or even in-depth cooperation, and its dependence will gradually increase.

Automobile manufacturers have different classifications of parts suppliers. They classify suppliers into A \ B \ C \ D grades based on performance; some also regard suppliers as important suppliers and general suppliers based on the characteristics of parts. Points. There are also suppliers classified into monopoly, relative monopoly, relative competition and perfect competition based on the resources of parts and components.

Increased dependence on suppliers is the key to this crisis of supply cuts, not only for OEMs to avoid the same situation, but also for parts companies. As early as more than a decade ago, Japanese parts suppliers were mainly China-based, and they adopted a decentralized strategy for Southeast Asia and other places, sourcing through lower-cost countries in Southeast Asia.

In response to the extraordinary situation of natural disasters, Japan Denso Corporation built an emergency system for the production and supply of core components in remote areas. In this epidemic, its managers stated that the production status of parts and components has not yet reached the critical stage where the supply chain will soon break, which is the value of proactive planning.