Topic on Passive Safety of Automobiles: Tracks with High Certification Barriers, Domestic Substitution Acceleration (with report)

Basic conclusion

The seat belt function is more intelligent, and the structural design of parts is more difficult. The main core functional module of the safety belt is the retractor, which is assembled from multiple mechanical and metal parts. The function of seat belts is becoming more and more intelligent, and the design and complexity of parts are also increasing. Therefore, the structural design, process manufacturing and testing capabilities of parts are one of the core barriers. In addition, the audit procedures for automotive safety parts are more stringent, and the time required is usually more than 2-3 years. The strict certification system also constitutes a relatively high industry barrier.

The core components of the airbag are the airbag and the gas generator, and the total cost of the two accounts for about 80%. Leading car companies have very high requirements for the consistency of gas generator products, and the situation of designated gas generator suppliers occurs, the supply relationship is stable, and customer barriers are high. The world’s major gas generator suppliers have long been dominated by foreign-funded enterprises. Nylon 66 industrial yarn, the raw material of air bags, accounts for about 62% of the cost, and the technical barriers to production are relatively high. At the same time, the supply of raw material PA66 particles has been monopolized by foreign capital for a long time. At present, the localization rate of fabric cloth is low, and the main suppliers include Korea Kolon, Japan Teijin, Japan Toray, Huamao Technology, etc.

Automobile collision regulations are becoming stricter, and passive safety configurations have been improved. The penetration rate of 82 models collected by China Insurance Research Institute in 2022 was used as a sample to calculate the penetration rate. The overall penetration rate of the side air curtain is higher than 60%, and it reaches 100% in the models with a price higher than 250,000. The new version of “C-NCAP Management Rules (2021 Edition)” has extra points for side air curtains, which is expected to help increase the penetration rate of this product. The active seat belt can provide reverse force control and restrain the occupants before a collision, make intelligent judgments and timely remind, better combine with the automatic driving function, improve driving safety, and the penetration rate is expected to increase.

The industry structure is dominated by foreign capital, and domestic suppliers with cost advantages are ushering in alternative opportunities . In 2021, the average price of Autoliv seat belts will be 22.4 US dollars per piece, and the average price of Songyuan’s seat belts will be 52.2 yuan per piece. In 2021, Autoliv’s gross profit margin will be 18.4%, and Songyuan’s will be 33.2%. The latter’s high gross profit margin is mainly due to the high rate of self-made parts. About 80% of ordinary seat belts are self-made, and about 60% of pre-tensioned seat belts are self-made. At the same time, Songyuan has a stamping and injection molding workshop, and raw material processing has cost advantages. . On the other hand, Autoliv only manufactures parts such as seat belt webbing and gas generators, and most of the others are outsourced or processed on behalf of others. With its cost advantage, Songyuan has the ability to rely on low prices to break through new customers, while Autoliv is facing pressure to further reduce its gross profit margin when it breaks through domestic brands.

China’s auto market is dominated by economical cars, and domestic suppliers with cost advantages are expected to replace them. In 2015, the proportion of self-owned brands was 37%, and from January to October 2022, the proportion of self-owned brands increased to 46%. From the perspective of price range, the domestic auto market is a low-centered spindle-shaped market, and fuel vehicles with a price range of 100,000 to 250,000 yuan account for about 55% of the total sales. With the gradual increase in sales of self-owned brand cars and the cost reduction demands of car companies, we expect that passive safety suppliers for domestic cars with cost advantages are expected to usher in alternative opportunities.

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