Highlights of the report:
The impact and influence of new forces on the automobile industry chain
In the narrow sense, a new force in car manufacturing needs to go through a series of challenges in the growth process. The factors that determine the viability of the company include continuous capital chain support, successful product positioning, smooth mass production rhythm, efficient ability to solve various problems and The foreseeable future cash flow from continuing operations and other factors . In a broad sense, the new forces can include the main body of enterprises that participate in vehicle manufacturing and travel services in a new way, inspired by new business formats. And such enterprises, whether they come from joint ventures, outstanding independent companies or new power companies, will undoubtedly be more competitive in the intensified competition pattern in the future.
1. The rise of the travel market: the upstream industry chain of new energy vehicles will definitely benefit
(1) Solid support for the upstream industry chain of new energy vehicles
The travel market has proved that new energy vehicles are naturally suitable for operation through the spontaneous choice of a large number of online car-hailing drivers and vehicle rental companies for several years. The practice of customized models by platform companies such as Didi and Meituan provides a solid backing for the continued rapid growth of new energy vehicle sales. If commercial vehicles have achieved a breakthrough in the penetration rate of new energy vehicles of 0-1%, then in the process of 1%-20%, the travel market has played and will continue to play an important role in the future. Different from the low-end A00-class models that occupied most of the sales of new energy passenger vehicles in the early days, although the models specially built for travel services also put cost control as the top priority, because they are assessed on the whole life cycle cost, therefore The production cost will not be reduced by sacrificing the cost of use such as reducing the charge amount. On the contrary, companies will try to optimize the cost of the whole life cycle by increasing the electric charge of the bicycle or even considering adopting the battery replacement mode. It has a strong deterministic pulling effect on the upstream of new energy vehicles, especially the power battery industry chain.
(2) General component suppliers are expected to benefit
On the other hand, referring to the choice of fuel taxi models, in addition to giving priority to local vehicle partners, we generally try to choose models with a larger market share. This is due to the fact that models with a larger number of vehicles have a larger market for supporting parts, the maintenance cycle is shorter and the zero-to-integration ratio is lower, which ultimately reduces the use cost of the operator’s entire life cycle. The customized models for operation are expected to follow a similar logic in the future, improve standardization and generalization to minimize the subsequent maintenance costs that may arise, and general- purpose parts suppliers that enter the supporting system of related models are also expected to benefit.
(3) Positioning change in vehicle manufacturing
According to public information, Didi Chuxing said that operators in the mobile phone industry account for more than 50% of mobile phones every year. In the future, the market share of automobile operators may be larger than that of mobile phone operators. For vehicle manufacturing, cooperation with travel platforms has brought new markets, but at the same time, it has also transformed its industrial chain status from 2C to 2B. On the one hand, this change will lead to a decline in the discourse power of OEMs in this market segment, the lack of brand power, and the new car forces will gain more room for breakthroughs in the short term; on the other hand, under the 2B logic, car companies are in cost control. The ability to control quality will be multiplied. In the medium term, large-scale vehicle group giants such as Volkswagen have obvious competitive advantages and expect structural benefits.
2. The impact of platform-building enterprises: the competition pattern of second- and third-tier car companies deteriorates
The inspiration of platform-building enterprises is that the user stickiness of low-end and high-cost products continues to increase to form an ecosystem, and the continuous upward breakthrough of brand power is not the only optional path for enterprises.
(1) Explosive models effectively affect the industry pricing system, and the profitability of low-end and mid-end car companies is under pressure
For platform-building enterprises, who hope to achieve mass production as soon as possible, they value the quality of future sustainable cash flow more than the improvement of net profit margin, and it is reasonable to quote a killer price. But once there is an explosion, it will effectively affect the industry pricing system. Competing companies with strong products can still cope with high-end products, while brands whose products are positioned in the same range of mid-to-low-end models have to adjust their price systems to respond. Competition intensifies, and the profitability of second- and third-tier car companies may continue to be under pressure.
(2) The foundry model appeared, and the foundry industry changed from 2C to 2B
At the same time as the competition among second- and third-tier car companies intensifies, some new power companies tend to choose the OEM model for vehicle production.
3. Efforts of brand building enterprises: strengthening of comprehensive parts suppliers
Brand-building companies’ extreme pursuit of the first product has led to higher uncertainty in the technology landing process, and it has also led them to rely more on core component integrators. Emerging car companies’ ultimate pursuit of product technology attributes and their own limited strength have become the core contradiction, which ultimately benefits the core component integration suppliers with leading technological advantages.
4. The impact of generality across product positioning
(1) Weakening of 4S mode of dealers
For platform-building enterprises, the first goal is to accumulate users and increase stickiness. In the long run, low gross profit in vehicle production, manufacturing and delivery will be the norm. Such car companies will attach great importance to a series of after-market products and services that follow after the sale of complete vehicles, which is completely different from the profit distribution method of traditional vehicle manufacturers and dealers. If the traditional dealership 4S model is adopted, it will greatly reduce the business segments that car companies can enter, thereby reducing their future sustainable profit points. Therefore, in this market, the 4S mode of dealers will also suffer a great impact in the future.
(2) Electrification is unstoppable, and high-end products accelerate the reshuffle of core three-electricity suppliers
The travel market provides a solid guarantee for the continuous increase in the penetration rate of new energy vehicles in the future, while the new entrants in the consumer market have brought about intensified competition, the continuous increase in the cruising range of products, the continuous downward movement of the price system, and the acceleration of product power, which also gave birth to consumers. An explosion of real demand willing to pay for it. It provides a solid guarantee for the continued prosperity of the entire industry chain of new energy vehicles, especially upstream resource products, battery materials, and lithium battery equipment.
On the other hand, the continuous improvement of product quality has also accelerated the process of the survival of the fittest among the core parts and components companies of new energy vehicles. In the early stage of the outbreak of the new energy vehicle industry, the products were mixed, and a large number of third-electricity suppliers with insufficient technical strength gained a large share of the market by actively entering the market. The rapid increase in demand for product quality has accelerated the survival of the fittest in the industry, and high-quality enterprises are expected to stand out. Taking the power battery as an example, in the past 18 years, the two giants CATL and BYD have gradually opened a huge gap with the members of the second echelon.
(3) The speed of intelligent network connection increases, and the demand for IoV hardware platform increases
In the travel market, the speed-up of intelligent network connection can directly improve travel efficiency. Companies such as Didi, Uber, and Lyft are vigorously deploying in this field; software and hardware providers related to the intelligent driving industry chain benefit. In the consumer market, new forces tend to take intelligent network connection and human-computer interaction as their main selling points, and their promotion of the arms race of car companies in the fields of HMI and Internet of Vehicles also provides a solid growth soil for related companies.
(4) Structural changes and opportunities for component suppliers
Under the impact of new forces, the various influences on the vehicle industry will be transmitted to its upstream parts suppliers to a large extent: first, because some of the OEMs’ businesses (mainly serving the travel market and OEM business) have changed from 2C to OEM business. 2B, correspondingly, the attributes of this part of the component suppliers are also changed from Tier1 to Tier2. This does not simply mean that the right to speak of parts and components has been weakened, but the standardization and generalization of parts and components has been enhanced. Second, the intensified competition in the vehicle segment will also affect the overall profitability of parts suppliers. Part of the competitive landscape is poor, and the profitability of links that do not require high technical strength of enterprises may continue to be under pressure from the downstream; while the industry barriers are high, and the bargaining power of links with strong technical strength of enterprises is expected to be improved.
Therefore, upstream component suppliers face similar structural changes. Under the trend of electrification and intelligent network connection, high-quality companies are expected to benefit, and products are standardized and versatile, especially comprehensive parts suppliers with leading technical strength are expected to benefit.
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