Parts companies should stick to their own development

A year ago, Delphi decided to divest itself of six non-core businesses, including brakes and chassis, catalytic converters, dashboards, door modules, steering systems, and axle bearings. Meanwhile, Ford Motor Company sold off its auto glass manufacturing assets, which drew the attention of several Chinese companies, such as Dongfeng, Wanxiang, Weichai, and Fuyao Glass. Although no Chinese firm managed to secure a major deal in the end, Jia Xinguang, a well-known automotive analyst in China, pointed out that regardless of whether the American auto industry is willing or not, the reality is that Chinese companies are now being considered as serious players on the global stage. This trend isn’t just about the strength of Chinese firms; it reflects a broader shift in the global manufacturing sector, especially in the automotive parts industry, where mergers and acquisitions have become increasingly common. For domestic companies, one clear path has been to acquire specialized firms related to their core business, thereby deepening their technological expertise and boosting competitiveness. This strategy is now widely adopted. For example, BorgWarner acquired the French company Moss, enhancing its powertrain technology. PPG, meanwhile, made a series of strategic acquisitions, including Dutch-based Macarons, expanding its coating platform significantly. Another impressive case is IAC (International Auto Parts Group), which was established in October 2005 and quickly grew into a $5.6 billion car interior and exterior parts giant through the acquisition of Collins & Aikman’s European assets, Lear Europe’s interior division, and other key deals. Given this trend, Weichai could explore similar opportunities by acquiring companies like Hunan Torch, Fast Transmission, Hande Axle, Zhuzhou Gear, or even take advantage of Delphi’s divestiture of non-core assets to strengthen its competitive position. In addition to M&A strategies, many Chinese companies are also focusing on independent innovation or adopting an integrated approach—introducing, absorbing, and re-innovating foreign technologies—to capture more market share. This path has become increasingly visible in the practices of commercial vehicle parts manufacturers over the past year. Take the engine industry as an example. Despite unclear national policies, several major diesel engine companies launched Euro IV emission engines in 2007. Yuchai even introduced China’s first Euro V engine, showcasing the R&D capabilities of domestic core component manufacturers. Similarly, FAW’s sixth-generation J6 truck features advanced assemblies such as engines, transmissions, axles, and cabs. Fast developed 12-speed and 16-speed dual-shaft heavy-duty transmissions with patented technology. Dongjukyu’s independently developed ABS system, Dongfeng Fengshi SUV’s overall system that won the top scientific advancement award in China’s automotive industry—all these demonstrate that China's core component technology has reached new heights. As the global automotive landscape continues to evolve, Chinese companies are proving they can compete not only through acquisition but also through innovation and technical excellence.

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