Recently, the Japanese auto industry in the country earthquake caused great impact, Kumho Tire CCTV 315 show the quality of the exposure, the auto parts industry has once again become the focus. According to statistics, China's annual auto sales in 2010 increased by 32.37%; production increased by 32.44%. ChinaVenture of continued growth in size of the market believes that the current domestic auto parts enterprises are still facing many low-skilled, low-margin, and many other challenges, but there are still no shortage of investment opportunities. Engine system parts enterprises, and joint ventures in China, car prices have more closely associated with the parts business worth investing in companies who focus on.

    Industry concentration is low, low level of technology, low profit margins

    ChinaVenture Investment Group, according to the master database of automotive products and parts CVSoruce corporate financial data to measure the income scale in 2009, the domestic production of the top ten auto parts enterprises accounted for 24% of the overall size, while domestic production of the top ten vehicle enterprises accounted for the overall share of 43%, compared to vehicle production, auto parts industry concentration is low overall. ChinaVenture noted that overall sales of domestic auto parts enterprises with low profit margins high, only 7% of its value-added products in general is not high, the cost in raw material costs higher proportion of the total cases, profits are squeezed. In contrast, foreign owned / joint ventures, the profit margin is around 11%.

    ChinaVenture that caused the current situation of the auto parts industry is largely due to China's overall vehicle manufacturing industry chain immaturity, lack of core technology, intellectual property, in the areas of core components such as engines, transmissions, steering systems, braking systems, transmission systems, suspension systems, vehicle bus control system of low permeability. These areas are cross-car prices of basic foreign-owned or joint ventures associated with the leading parts manufacturers.

    Demand remains strong significant increase in the scale of financing

    ChinaVenture Investment Group, according to the master database products CVSoruce data show that to achieve our full year 2010 sales of 18.06 million vehicles, up 32.37%; to achieve output of 18.26 million, an increase of 32.44%. According to conservative estimates, China's automobile production and sales in 2011 will maintain a 15-20% increase, thus boosting the relevant parts industry continued to grow.

    Localized cross-brand car prices increased demand for domestic components. According to the Automobile Association data, cross-brand passenger car sales in 2010 7,483,500, accounting for 54.4% of the overall sales market. One cross-brand sales of 6,561,300 cars, accounting for 69.1% of car sales market. At the same time, cross-car prices in China are still looking around the site in the plant, the expansion of production capacity. Such as the PSA and the Changan Automobile in Shenzhen, the new capacity of 200,000 items, with FAW Volkswagen 300,000 in Foshan production project, national and local government in exchange for preferential tax conditions for cross-border car prices in China launched its own brand of cars localized . Although difficult to assess the effect of this policy, but ChinaVenture that related automotive parts manufacturers will directly benefit from the expansion of vehicle production and parts localization rate increase.

    Investment in the Group according to ChinaVenture database products CVSoruce master data of motor vehicles and parts industry in 2010, a total of seven auto parts enterprises listed IPO financing, financing amounting to about $ 832,000,000, compared to only have a 2009 IPO, the amount of financing about 5400 million, an increase of 14.27 times the amount of financing. As two months of 2011, the West has been pumping the shares, the Asia-Pacific Technology, Hong Rong special precision rolls and other four companies share IPO, the scale has reached 506 million financing. The A-share market valuation of the automotive parts industry, higher levels of auto parts enterprises in recent years focused on the Shenzhen Stock Exchange listing of small plates, the GEM and other overseas markets such as the U.S. and Hong Kong less.