The basic risk characteristics of auto parts industry

There are risks in places with opportunities, and the risk is often co-existing with the opportunity. The automobile parts industry is also the same, and throughout the country and abroad, the automobile spare parts industry is in the risk of finding the opportunity. The automobile industry is the pillar industry of our national economy, and the prosperity of the automobile industry has a positive effect on the development of the upstream and downstream economy and the provision of employment.


(1) Market demand risk


The vehicle manufacturers in OEM market are the main customers of auto parts enterprises. Although the overall growth rate of OEM market is optimistic and the car ownership is also on the rise, there is still potential market demand risk.


In recent years, the decline of production-marketing ratio is a warning to automobile production and marketing enterprises. If the production-marketing ratio falls further in the future, there will be overcapacity, and the vehicle production enterprises may reduce the production capacity, and then the procurement volume of upstream parts manufacturers will be reduced. In addition, the production of some specific parts and components is likely to lead to a significant reduction in demand as a result of the change or disconnection of the vehicle models of the whole vehicle production enterprises. Finally, large vehicle production enterprises often have strong bargaining power, and the profit space for small and medium-sized parts enterprises is low. Once the demand is reduced, it is difficult for parts enterprises to maintain by adjusting the price.


(2) Risk of change of purchase price


The price fluctuations of the main raw materials of auto parts products including steel non-ferrous metals and rubber will make the production cost change greatly. Especially since the beginning of the year, commodity rebar and oil prices have fallen, and their low rebound will have a big impact on raw material purchases. In addition, some of the high-precision and high-performance components of auto parts rely on foreign imports. If the foreign market changes, import prices fluctuate, and substitutes can not be obtained in a short period of time, it will have an impact on the production of auto parts. If the parts production enterprises can not reasonably control the cost fluctuation, it will have a negative impact on the profit situation.