AutoBeta(AutoBeta.net)08/22 Report--

As China's auto market enters a low ebb, more and more brands encounter crises from production, sales and other aspects, especially independent cars, where competition intensifies the living environment and financial pressure. Any change is likely to become the last straw to overwhelm them, including major auto parts suppliers.

A few days ago, it was exposed on the Internet that Guowei Technology, a supplier of an automobile mainframe factory in Zhejiang, was basically in a state of suspension of capital chain problems, and it was also caught in bankruptcy rumors, affecting the supply of spare parts of more than a dozen mainframe factories, and in serious cases, it may also cause the mainframe factory to stop production. It is said that the relevant local departments have been involved in coordination. And the relevant mainframe factory gathered Guowei, want to transfer the production mold out.

"Guowei Technology, I want a salary, I want compensation!" The circulated picture shows that the plant of Guowei Technology Co., Ltd. is suspected to have been collectively asked for wages by employees.

According to the official website, Guowei Science and Technology was founded in 1988, registered in Yueqing City, Zhejiang Province, with two production bases, mainly producing car body controller (BCM), car CD, Radio, keyless access control system, remote control, visual reversing radar, combination switch, steering lock, whole vehicle lock core, whole vehicle small switch, door lock mechanism and other products. The company is matched with dozens of large automobile factories in China, such as FAW Group, Dongfeng Group, Changan, brilliance, Chery, Southeast, SAIC GM Wuling, Geely Automobile, Great Wall Motor, BYD and so on.

Guowei Technology may have financial problems due to poor management of the enterprise, and in the mouth of the source exposed on the Internet, it was also mentioned that an independent automobile company owed payment to the supplier, which was dragged to death due to the long account period and repeated arrears of the mainframe factory. After some media reports on this, has issued an apology statement, can not confirm that Guowei Technology's financial problems are directly related to the independent car company.

The statement also quoted sources as saying that some mainframe factories have pulled away the production moulds from Guowei, and other mainframe factories have to settle the arrears if they want to pull away the moulds.

Some people in the industry believe that "the consequences of the break of Guowei's capital chain directly affect half of the domestic cars." Another industry insiders said that Guowei cooperated with many mainframe factories and should not easily go bankrupt because of the car chain.

"long account period" has become the "rule" of cooperation between auto parts suppliers and vehicle manufacturers. Often, the bargaining power of parts suppliers is weak, and the payback account period of automobile manufacturers is longer. If you add the difficulty of repayment caused by malicious default, it will undoubtedly increase the financial pressure on parts suppliers.

The sudden collapse of a large auto parts factory highlights many factors, such as its own business problems and the cooperative relationship with the mainframe factory, which reflects the depression of the automobile industry. According to data from the China Automobile Association, from January to July 2019, China's automobile production and sales completed 13.933 million and 14.132 million respectively, down 13.5% and 11.4% respectively compared with the same period last year, and the decline remained in double digits. Among them, the decline of independent car brands is the biggest, and the living environment is even worse. It is conceivable that the life of the related auto parts manufacturers is also difficult.

This phenomenon will be more prominent in the future. Due to the dismal automobile industry, Chongqing, the "automobile capital of China", was also hurt. at the beginning of August, more than 30 vehicle manufacturers and parts companies in Liangjiang New area alone were classified as difficult enterprises and were subsidized by the government. Including more than 30 companies, including Changan Ford Motor Co., Ltd., SAIC Iveco Hongyan, Yanfeng Andotuo, Yanfeng Automobile Accessories, Lear Automobile system, and so on, of which Changan Ford received a subsidy of 140 million. The move could stave off massive layoffs in struggling companies, especially in the battered auto industry. Chongqing has 21 vehicle manufacturing enterprises, including Changan system, BAIC Yinxiang, Lifan Automobile, brilliance Xinyuan, Dongfeng Xiaokang, etc., and nearly 1000 auto parts enterprises above scale. The decline in sales and production of whole vehicle enterprises is bound to greatly affect the operation of parts suppliers.

Back to this incident, the collapse of Guowei Technology, a parts supplier that cooperated with dozens of mainframe factories, will affect the employment of thousands of employees. And the main engine factory, which constantly lowers the price and defaults on the payment, presses the capital risk on the supplier, which may also be an important factor for the supplier to be frustrated.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat