Recently, according to Du Fengqin, secretary general of the China National Automobile Association's board spring committee, the annual demand for automobile springs in the Chinese market is approximately more than 600,000 tons, and the annual production capacity of domestic automobile spring companies is approximately 750-850 thousand tons. The automotive spring industry is in an oversupply situation.
Most vehicle spring production companies in China mainly focus on the commercial vehicle market. Commercial vehicles use springs as air suspension, few leaf springs, and multiple leaf springs. Almost all companies in the country can produce multiple leaf springs, less than 50% of companies can produce fewer leaf springs, and very few companies can produce air suspension. Du Fengqin told reporters that not all products are oversupply, and about 90% of air suspensions need to be imported.
Air suspension has a history of more than a hundred years in foreign countries. Although it started late in the country, it has also made some breakthroughs in independent development. It is understood that Dongfeng Automobile Suspension Spring Co., Ltd. has, through years of self-accumulation and digestion and absorption of air suspension theory, has formed a certain degree of comprehensive development and processing and manufacturing strength, and has become the only supporting enterprise for Dongfeng commercial vehicle air suspension.
Different from the air suspension, it is also necessary to master the higher-end technology. The small leaf springs and multi-leaf springs produced by domestic companies can fully meet the needs of the vehicle manufacturer, and there is also a phenomenon of overcapacity.
Some of the automotive spring products are used to support the vehicle manufacturers, and the other part is sold to the aftermarket. As a supplier, there are a certain number of domestic automotive spring companies, mainly supporting passenger cars and some large truck companies. Du Fengqin gave an example to reporters: “A bus company is preparing to produce 1,000 passenger cars, but there are seven or eight companies producing springs that can meet its quality and price requirements. The entire vehicle company cannot have all these manufacturers’ requirements. Products, naturally, create oversupply.†Du Fengqin said that the direct result of oversupply is the price reduction by automakers, and spring companies are conducting price wars.
“Now the leaf spring industry is very difficult.†Chen Xinglin, president of the China Automotive Industry Association’s board spring committee, believes that the passive situation of the leaf spring industry is “between†the upstream and downstream industries. To this end, he called for: “First, spring steel manufacturing companies must have a long-term perspective and develop strategic cooperation with parts companies. Second, the backbone enterprises of the leaf spring industry must have a sense of synergy and must position the prices of the products at a reasonable level. Third, the vehicle companies must strengthen the cooperation with key enterprises of leaf springs from the height of strategic cooperation so as to accelerate the development of vehicle companies."
Relevant experts believe that due to the low barriers to entry in the leaf spring industry, the disorderly competition behavior of many small enterprises is still serious. The products of these small enterprises are mainly sold to the after-sales maintenance market. The phenomenon of oversupply in this area is very serious, resulting in waste of resources and market confusion.
“In the long run, the disorder in the market still depends on effective market mechanisms.†Chen Xinglin’s outlook for the future of the industry is still promising. He believes that if steel prices continue to rise, it will inevitably lead to the collapse of a large number of small-scale, disorderly competition leaf spring plants, and realize the concentration of market resources to large-scale backbone leaf spring companies with domestic strength. However, this will cause these backbone enterprises to face enormous capital and cost pressures in a short period of time. Steel leaf spring companies need to increase their own competitiveness while also supporting the entire vehicle company.
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