China's automotive aluminum alloy wheel industry market research and "14th Five-Year" development trend research report

Development characteristics and situation analysis of automotive aluminum alloy wheel industry

Compared with steel wheels, aluminum alloy wheels have obvious comparative advantages. Aluminum alloy wheels are characterized by light weight, small inertia resistance, high production accuracy, and small deformation when rotating at high speed, which is conducive to improving the linear driving performance of the car, reducing the rolling resistance of tires, and thus reducing fuel consumption. After years of development and technology introduction, the manufacturing technology of aluminum alloy wheels in mainland China has been improved day by day, and the equipment manufacturing technology of the whole industry chain has been mastered. With the rise of the domestic automotive aluminum alloy wheel industry, the mainland has gradually grown into a global automotive aluminum alloy wheel manufacturing center, and the aluminum alloy wheels produced by the mainland are exported to countries around the world, and the export volume has ranked first in the world for many years.

China's automotive aluminum alloy wheel industry market research and "14th Five-Year" development trend research report

Source: Compiled by Puhua Youce

1. Characteristics of automotive aluminum wheel industry

(1) Industrial agglomeration

In 2021, there will be 11 Chinese parts companies (including joint ventures) in the top 100 global auto parts suppliers, a record high. In recent years, with the support of national policies, enterprises have gradually achieved breakthroughs in some fields by strengthening independent research and development and introducing technical talents. With the rapid development of the automotive industry, the auto parts industry cluster around the vehicle manufacturer has also developed rapidly, and six major parts clusters have been initially formed in the Yangtze River Delta, central Region, Pearl River Delta, Beijing-Tianjin-Hebei, Southwest and Northeast China.

According to the statistics of China Automotive Industry Yearbook, mainland automotive aluminum alloy wheel manufacturers are concentrated in Jiangsu, Zhejiang, Shandong, Guangdong and Hebei, with obvious agglomeration effect.

(2) The competitors in the industry are quite different

The number of domestic automotive aluminum alloy wheel industry enterprises is relatively large, but small-scale enterprises account for the majority. From the perspective of the overall pattern of the industry, three major echelons have been formed: the first echelon is a listed company and a wheel manufacturer with a certain scale, mainly for the vehicle supporting market, only a few large-scale, strong enterprises enter the market, and export products to the foreign vehicle supporting market; the second echelon is medium-sized or small wheel manufacturers, mainly for the low-end vehicle supporting market and aftermarket, the current domestic aftermarket is not mature enough, domestic automotive aluminum wheel enterprises mainly export to the foreign aftermarket The third echelon is a smaller wheel manufacturing enterprise, mainly for domestic and international wheel manufacturers or dealers OEM production, this part of the enterprise gross profit margin is lower, the competitiveness is weaker.

(3) Pyramid supplier system

The production process of the automobile industry is complex and the technical content is high, and with the improvement of the automobile industry system, a professional division of labor has been formed in the automobile manufacturing system. Typically, a car consists of more than a thousand parts assemblies involving more than 200 suppliers. In order to reduce production costs, simplify the automobile manufacturing process, and save assembly time, vehicle manufacturers need to form a pyramidal multi-level supplier system by purchasing parts from global suppliers.

Wheel manufacturers are divided into multi-level relationships such as first-tier suppliers, second-tier suppliers, and third-tier suppliers according to the supply relationship with the vehicle manufacturer. Tier 1 suppliers supply products directly to the vehicle manufacturer, and the two sides maintain a long-term and stable supporting supply relationship and participate in the design and development of new models. First-tier suppliers are mostly core suppliers of vehicle manufacturers, with strong funds, strong independent research and development capabilities, advanced technology, high product quality characteristics, irreplaceable; second-tier suppliers supply to first-tier suppliers, and undertake part of the research and development tasks of first-tier suppliers, such suppliers have certain independent research and development capabilities, better product quality, stronger competitiveness; third-level suppliers provide parts to second-level suppliers, the number of such suppliers is large, low technology, fierce competition, and high replaceability.

2. The development trend of the industry

(1) Integration and scale of automotive wheel industry

The mainland automobile industry chain has gradually improved, and has initially formed six major parts clusters in the Yangtze River Delta, central Region, Pearl River Delta, Beijing-Tianjin-Hebei, Southwest and Northeast China. As an important part of the auto parts industry, the auto wheel industry will inevitably gather to the parts industry cluster to further improve production efficiency in order to enhance the aggregation effect and reduce transportation costs.

With the intensification of competition in the automotive market and parts market, some automotive aluminum alloy wheel manufacturers with low internal operation efficiency, poor product quality or unstable product quality will eventually be eliminated or merged. In the future, large enterprises with systematic research and development and modular supply, as well as small and medium-sized enterprises with specialized production, will be the main players in the industry.

On the one hand, industry integration is conducive to high-quality enterprises to obtain greater production scale and market share, to achieve scale effect; on the other hand, to reduce disorderly homogenization competition, enterprises can concentrate on product research and development and service customers, which will help Continental automotive aluminum alloy wheel manufacturers to enter the high-end vehicle supporting market.

Benefiting from the globalization of auto parts procurement, the mainland has undertaken the manufacture of key parts including aluminum alloy wheels by virtue of its cost advantages and industrial supporting advantages, and has now become the world's largest aluminum alloy wheel manufacturing center, ranking first in the world in terms of production and sales for many years, and the quality of products can fully meet the technical quality requirements of domestic and foreign vehicle manufacturers. However, the brand influence of the wheel is not enough. In the future, The aluminum alloy wheel industry of Continental Automobile will closely follow the pace of the international market, actively participate in competition, create a unique brand and independent intellectual property rights of Mainland China, and enhance the brand influence of Continental Automobile Aluminum Alloy Wheel and its competitiveness in the global market.

(2) The auto parts industry has upgraded to high-end manufacturing

With the gradual maturity of the mainland automobile industry, consumers' requirements for the safety, comfort, aesthetics and other qualities of automobiles have been continuously improved. At the same time, with the increasingly fierce competition in the automotive market and the gradual shortening of the development cycle of new models, auto parts suppliers need to provide parts and components products that are compatible with new models in a timely manner. Therefore, the requirements of vehicle manufacturers for the technical strength, process level, and management ability of auto parts enterprises are also more stringent. The rapid development of the automotive industry has prompted auto parts enterprises to continuously transform and upgrade to high-end manufacturing, and domestic auto parts enterprises can only maintain a sustained competitive advantage in the increasingly fierce market environment by strengthening technology research and development, improving product structure, and realizing the development of system development, system support, and modular supply.

(3) Wheel products are lightweight

The rapid growth of automobile production and sales has brought great pressure on the environment and energy. Driven by a series of policies such as National V. emissions and the fourth stage of fuel consumption standards, to the implementation of the "double integral policy", the development of lightweight has become an urgent need of the automotive industry. The lightweight of the car refers to reducing the body quality of the car as much as possible under the premise of maintaining the strength and safety performance of the car to reduce fuel consumption.

At present, the main ways to achieve automotive lightweighting include material upgrades and process innovation. In the automobile wheel manufacturing materials, aluminum alloy has the advantages of small specific gravity, good corrosion resistance, good thermal conductivity, high specific strength, easy processing, low cost, etc., and is an ideal lightweight application material. In the production process of automotive wheels, the forging process also has obvious advantages in lightweighting. In the quality of automobile maintenance, the proportion of wheel quality to the quality of automobile maintenance is high, and reducing the weight of wheels can reduce the quality of automobile maintenance, and ultimately achieve the goal of lightweighting of automobiles.

3. Opportunities and challenges of industry encouragement

(1) Opportunities: supported by national policies, consumer demand for automobiles will continue to grow, the rapid development of new energy vehicles, and the globalization of the auto parts industry

(2) Challenges

A. The impact of trade policies on exports

The automotive industry is one of the core industries of China and the United States and an important part of the Sino-US trade dispute. In the two-wheeled tax increase list of the United States to the mainland, it covers passenger cars, buses and other complete vehicles, as well as auto parts such as body and shock absorption, which has a certain impact on the mainland automobile industry going abroad. Mainland auto parts companies export about $10 billion a year to the United States, and Sino-US trade frictions have a far-reaching impact on the mainland auto parts industry.

In recent years, the European Union, Australia, India and other countries and regions have introduced anti-dumping duty policies for mainland automotive aluminum alloy wheels, which has reduced the competitiveness of mainland aluminum alloy wheel export products. In 2020, due to the impact of the new crown epidemic, the world's major economies, including developed countries in Europe and the United States, have shown different degrees of recession, which has further impacted the mainland auto parts industry.

B. There are fluctuations in profit levels

The profit level of the automotive aluminum alloy wheel industry is mainly affected by the price of upstream raw materials and the price of the downstream market. In addition, due to the large number of aluminum alloy wheels exported abroad by continental automobiles, the profit level of the industry is also affected by exchange rate fluctuations and tariffs.

The raw materials of automotive aluminum wheel manufacturers are mainly aluminum, and the price fluctuation of aluminum directly affects the cost of products. If the price of aluminum rises, the production cost of the wheels will increase. Under normal circumstances, enterprises will determine the price of products according to the price of aluminum, but it is difficult to completely transfer the cost of rising aluminum prices to downstream customers, resulting in the risk of declining product profits.

In the vehicle supporting market, in general, the profit margin of new models and redesigned models in the early stage of listing is large, and the parts supporting them can also reach a higher level of profitability. However, the introduction of alternative models forced the price of the original model to be reduced, so that the price of supporting parts fell accordingly. On the other hand, with the increasingly fierce competition in the automotive industry, the overall price of the whole vehicle tends to decline. Automakers will shift price reductions to upstream parts suppliers, further squeezing the profitability of auto parts manufacturers.

4. Major enterprises in the industry

(1) Zhejiang Wanfeng Aowei

Founded in 2001 and headquartered in Shaoxing City, Zhejiang Province, Zhejiang Wanfeng Aowei Steam Turbine Co., Ltd. as the first listed company in the industry, Zhejiang Wanfeng Aowei Steam Wheel Co., Ltd. has been committed to the research and development, manufacturing, sales and after-sales service of high-end aluminum alloy wheels since its inception. In the field of automotive wheels, the main customers include BMW, Mercedes-Benz, Land Rover, General Motors, Ford, Volkswagen, Daihatsu, Hyundai and other well-known vehicle manufacturers at home and abroad.

(2) Yueling, Zhejiang

Zhejiang Yueling Co., Ltd. was established in 1998, headquartered in Wenling City, Zhejiang Province, mainly engaged in the research and development, design, manufacture and sales of aluminum alloy wheels, with the international after-sales modification market as the core, and constantly extend to the domestic and foreign vehicle supporting markets, products are sold to more than 80 countries and regions around the world, including the United States, Japan and Europe.

(3) Zhejiang Jinfei Kaida

Zhejiang Jinfei Kaida Wheel Co., Ltd. was established in 2005, headquartered in Jinhua City, Zhejiang Province, since its establishment has been engaged in the research and development, design, manufacture and sales of aluminum alloy wheels, the main products are automotive aluminum alloy wheels, motorcycle aluminum alloy wheels, electric bicycle wheels and intermediate alloys. In the field of automotive wheels, the main customers include SAIC Volkswagen, SAIC-GM-Wuling, Suzuki, Daihatsu, Changan Automobile, Geely Automobile, Dongfeng Motor, Dongfeng Motor, DPCA and other well-known vehicle manufacturers at home and abroad.

(4) Guangdong Dishengli

Founded in 2001 and headquartered in Taishan, Guangdong Province, Guangdong Dishengli Auto Parts Co., Ltd. is mainly engaged in the research and development, design, manufacture and sales of aluminum alloy wheels, the main products are aluminum alloy wheels, including electroplated wheels and painted wheels. Products are mainly exported to the international aftermarket, deeply rooted in the U.S. market, there are a number of subsidiaries in the U.S. market.

(5) CITIC Deckard

Founded in 1988 and headquartered in Qinhuangdao, Hebei Province, CITIC Dicastal Co., Ltd. is the world's largest manufacturer of automotive aluminum components, mainly for aluminum alloy wheels and automotive powertrain, chassis and body system lightweight aluminum castings. There are 26 major production sites in China, North America, Europe and Africa, and the main customers include more than a dozen leading global automakers such as Ford, General Motors and Chrysler, as well as major domestic automakers such as FAW, SAIC and Dongfeng.

(6) Lizhong four-way

Founded in 1998 and headquartered in Baoding City, Hebei Province, Lizhong Sitong Light Alloy Group Co., Ltd. is mainly engaged in the research and development, manufacturing and sales of new functional intermediate alloy materials such as metal grain refinement, metal phase metamorphism, element addition and metal purification, and the main products include aluminum-based alloys, copper-based alloys, zinc-based alloys, magnesium-based alloys and aerospace-grade special intermediate alloys.

Its subsidiary Tianjin Lizhong Wheel Co., Ltd. is committed to the research and development, design, manufacture and sales of high-end aluminum alloy wheels, the main products are automotive aluminum alloy wheels, the main customers include BMW, Audi, Mercedes-Benz, Volkswagen, Volvo, GM, Ford, Chrysler, Fiat, PSA & Opel, Hyundai & Kia, Nissan, Mazda, Mitsubishi, Suzuki Great Wall Motors, Geely Automobile, SAIC Group, Beijing Motor, Dongfeng Motor, Changan Automobile, SAIC-GM, FAW-GM, Beijing Hyundai, Dongfeng Renault, Changan Mazda and other well-known automobile manufacturers.

For more industry information, please refer to PwC Consulting's "China Automotive Aluminum Alloy Wheel Industry Market Research and "14th Five-Year" Development Trend Research Report", and PwC Consulting also provides industry research reports, industrial chain consulting, project feasibility reports, 14th Five-Year Plan, BP business plans, industrial maps, industrial planning, blue white papers, IPO fundraising feasibility studies, IPO working paper consulting and other services.

China's automotive aluminum alloy wheel industry market research and "14th Five-Year" development trend research report

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