"Chinese car, national paint!" This is an interview with Yuan Xiang, chairman and president of Jinlitai, who expressed his company and his own goals.
"We have set an ambitious goal this year to use our existing strengths in the commercial vehicle sector to break into the passenger car sector. In the recent announcement, we also revealed the newly recruited a large number of core technical personnel, so that these more than 20 technical personnel broke through the boat and achieved this goal wholeheartedly. Strive to win the difficult bone of passenger cars from 2023 to 2024 and create another Jinlitai! Yuan Xiang said.
Between the words, you can appreciate the opportunities brought by the era of intelligent electric to the automotive industry chain. Especially after being dominated by foreign paint giants for many years, how can national brand enterprises be willing to continue to be "stuck neck"?
According to public information, Jinlitai was established in 1993 and is a high-performance coating enterprise integrating research and development, production, sales and service. It is one of the few national brand companies in the industry that can provide customers with "full process product matrix + full set of automotive coating solutions". Over the past 28 years, the company has grown into a leader in domestic commercial vehicle painting and the only listed company with automotive OEM original paint as its main business.
It is such a local enterprise, in the situation of foreign monopoly of the market, has not given up research and development and breakthrough.
Foreign investment in automobile painting accounts for more than 90%.
China is an annual output of 20 million passenger cars of the car power, but is not an automobile power, in this supply chain, there are many breakpoints, for example, limited by a variety of barriers, passenger car OEM original paint has been monopolized by foreign companies for many years.
Looking back at history, in the 1990s, China entered the era of joint venture vehicles, bringing the concept of supporting systems for the automobile industry, and the European, American, and Japanese systems all have their own upstream and downstream coordinated development "partners" in China, and their cooperation with each other has also formed a long-term trust relationship and a collaborative model, and subsequently built a "high barrier" in basic research and development, certification access and construction experience.
However, with the emergence of a series of events such as trade wars, epidemics, supply cuts, and lack of cores, with the advent of the era of intelligent electric, China's automotive industry has ushered in a major opportunity to "reconstruct the supporting system". "Although foreign-funded coatings companies have occupied more than 90% of the market in the past 20 years, however, with the maturity of the domestic automotive industry chain and supporting enterprises, the next 10 years will be a critical period for Chinese automotive coatings companies to break the situation and enter the game," said Yuan Xiang, president of Jinlitai.
"We have always said that automotive coatings are the crown jewel of the entire coatings industry because it is the most difficult to do and the standard requirements are the highest. The certification of an automotive coating requires not only technology, but also a long time cost. For example, the joint venture car company requires that after the whole vehicle is sprayed, it will be sent to Florida in the United States for natural exposure experiments for one year, and then pulled back for various aging performance tests. However, Yuan Xiang believes that even if it is difficult to overtake in the corner, national coating brands must seize the opportunity to compete with international giants, because the opportunity is not waiting for people, not to mention, after years of research and development and efforts, at present, in terms of technology, individual domestic coating manufacturers have mastered the core technology.
Automobile manufacturing is a competition in the whole industry chain
Yuan Xiang said that before the epidemic, everyone thought that the competition between countries was the competition of multinational companies, but after events such as chip supply cuts, we should realize that the competition between countries is actually the competition of the industrial chain.
In the coatings industry, passenger car OEM original coatings have always been a high-end market. In the era of traditional automobile unification, it is customary for people to believe that imported paint is a symbol of high-end and foreign atmosphere. In the automotive industry, the five foreign brand paint giants such as PPG, BASF, Nippon, Axalta and Kansai from the United States, Japan and Germany have an innate advantage (commonly known as "five big") and can always occupy 95% of the market even if the price is much higher than that of domestic paints. Nowadays, with the comprehensive rise of China's independent brands and new forces to build cars, the pressure on traditional joint venture brand cars is very high, and under the game of great powers, the independent safety and controllability of the automotive industry chain has become a trend, which has also brought unprecedented opportunities to small and medium-sized enterprises in the industrial chain.
After the baptism of the epidemic, why is Jinlitai going up against the current?
Yuan Xiang explained that the epidemic continues to fight back, and the industrial production of many manufacturing countries has been suspended, for example, India and other chemical exporting countries have been interrupted, which has hindered or increased the price of imported raw materials such as titanium dioxide and resin in other countries; while the price of shipping costs has risen more obviously, and the price of a container with a length of 40 feet has risen from 4205 US dollars before the epidemic to nearly 10,000 US dollars today, which is a lot of feelings for enterprises in the middle and lower reaches of the chemical industry.
"Although the global raw material price rose fiercely in the first half of the year, Jinlitai's coating business in the first half of the year did not increase in price, and the cost of material procurement alone was 74 million yuan more." We are located in the automotive industry chain, and the bargaining space is limited, because the high-end core materials are not in the hands of our country. ”
Price increases are both a crisis and an opportunity! Yuan Xiang believes that whether it is the price increase of raw materials or the price of shipping, for the paint industry that is dominated by foreign capital, the price increase means that the industry will accelerate the reshuffle. The supply crisis caused by the epidemic has made more paint companies aware of their shortcomings and gaps, and they will increase their research and development and layout.
Those coating companies engaged in low-end products are accelerating industrial upgrading and achieving cost reduction and efficiency increase due to the high cost ratio. For enterprises engaged in high-end coatings such as Jinlitai, at this stage, more consideration is how to promote the further transformation of coating products to high-end and diversification, adjust the product structure, promote industrial upgrading, promote energy conservation and environmental protection, and continuously improve the added value of products, which also strengthens our confidence in entering the market from commercial vehicles to passenger cars.
A blueprint to tackle the "card neck" puzzle
Since the reform and opening up, many enterprises have pursued the technology follow-up strategy of introduction, digestion and imitation, and have also tried to solve technical bottlenecks through joint ventures. Now, however, China's international environment has undergone a reversal. On the one hand, the Western countries led by the United States, not allowing imitation and introduction, have adopted many strategies of "setting up obstacles" in high-tech and advanced manufacturing, which have extended from trade wars to technology wars and industrial chain wars, which has forced China to begin to pursue the independent control of industrial chains. On the other hand, China is already on par with Western technology in some manufacturing fields, and has no experience to follow, so it can only explore on its own.
If we do not have a deep understanding of the development of national brand coatings enterprises, perhaps we do not know that in this industrial chain, there is also a "card neck" problem, and China is seriously lagging behind the international in the field of high-end resins.
The main raw material resins for coatings include structural resins, functional resins, excipient additives, etc. The core technology and difficulty of coatings lies in resin development and spraying applications, but core chemical raw materials and technologies such as high-end functional resins are controlled by foreign capital.
"Before and after the new crown pneumonia epidemic, the problems of caught off guard by 'supply cuts', soaring shipping prices, and soaring raw material prices have made us more and more urgent to realize that when core chemical raw materials and process technologies are monopolized by foreign capital for a long time, how to break the problem of domestic coatings is not only related to the safety of the automobile industry, but also to the important issues of China's basic chemical raw materials and even the entire industrial system." Yuan Xiang said frankly.
"We have recently set an ambitious goal to enter the passenger car market with firm confidence. In the recent announcement, we also revealed the newly recruited a large number of core technical personnel, so that these more than 20 technical personnel broke through the boat and achieved this goal wholeheartedly. Strive to take the difficult bone of passenger cars from 2023 to 2024 and build another Jinlitai. ”
It is said that there is no drawing can not be constructed, but how important is this development plan customized by Jinlitai for itself? Can it be achieved smoothly? Under the situation of numerous competitors in the industry and monopoly of international giants, many small and medium-sized enterprises can easily lose their way in the process of development, and even cannot find a direction suitable for their own development. And Jinlitai is deeply aware of the dilemma he is in and the opportunities he faces. They grasped the practical problems restricting the development of enterprises and bravely formulated a blueprint for short- and medium-term development planning.
Fixed-point blasting blockade
According to Jinlitai, the price and cost of the coating industry is actually very transparent, and the cost of a passenger car on painting is not very high (interestingly, the investment in the painting assembly line is the highest among the four major processes of automobile manufacturing)
Based on China's total annual automobile sales of 20 million units, the approximate market size of automotive coatings is about 10-15 billion, if we overcome this "high barrier", then recreating a Jinlitai is not a problem. ”
On the question of how to break through the international five-big blockade circle, Yuan Xiang said that the current technical threshold has caught up with the international coatings giant, and finally the competitive space of all parties is focused on the cost.
According to market research, in the case of the same technical indicator parameters as the five major companies and the price of raw materials, the competitive space of all parties is focused on operating costs. The operating cost of Jinlitai as a private enterprise is definitely lower than that of multinational enterprises. If the cost of car painting is the same, the price of Jinlitai products is lower.
"It's definitely not an easy process to tap into the passenger car segment by taking advantage of our strengths in commercial vehicles, but we are currently confident in our 2024 targets." On how to break through the passenger car coating market, Yuan Xiang said that from the perspective of certification, domestic coating in the independent brand, the new force car brand breakthrough is relatively low, in the traditional joint venture field, the major car companies will not easily take risks because of such a little painting cost.
The key to success lies in the implementation! Yuan Xiang said, "Our strategy is to first carry out fixed-point blasting from the breakthrough of national independent brands, and the next step is to start from the painting of a certain car company in Europe, the United States, Japan and South Korea, conquer one of them, and get the admission ticket." For example, with Honda, Toyota, Mazda and other Japanese car companies will be certified relatively smoothly, more confidently, and the pace of certification will be faster. ”
Focusing on the "card neck" problem requires the deep integration of production, education and research to make up for shortcomings and win the battle. Yuan Xiang analyzed why to take the national independent brand as the main direction of attack, first, starting from the chip supply, the crisis awareness of the independent brand has emerged, and it is the trend of the times to cultivate Chinese its own reliable supply chain; secondly, the "stepping stone" of passenger car certification must be obtained. We set up a subsidiary, find first-class scientific research institutes of new material experts to overcome the high-end resin problem, the goal is to fundamentally solve all the import dependence involved in resin, do reverse engineering to break through one by one, and then synthesize it.
In order to achieve the goal as soon as possible, on December 28, 2021, Jinlitai, Fudan University and Zhuhai Fudan Innovation Research Institute officially signed the "Cooperation Agreement on Jointly Building a School-Enterprise Joint Research Center for Advanced Coating Materials". The agreement is an important measure to promote the dual main line strategy of "automotive coatings + high-tech new materials", through the establishment of long-term stable and close industry-university-research cooperation, make full use of fudan university's advantages in scientific and technological talents and Jinlitai's industrial market advantages, especially in the military-civilian integration of new materials as the main research and development direction, and jointly build a common technology research and transformation service platform.
It is reported that the future research tasks of Universities such as Jinlitai and Fudan mainly include six tasks, mainly involving high-performance resins, coating formula optimization, coatings for automatic driving, aerogel insulation coatings, military infrared stealth coatings, and new organic electronic semiconductor materials.
Diversified product lines have their own emphases
The future auto market not only looks at the increment, the stock can not be ignored, the development potential of China's second-hand car market has been attracting attention. In the face of the increasingly competitive coatings market, what layout does Jinlitai have in terms of product line enrichment?
Jinlitai's main track is automotive coatings, subsidiary Shanghai King & Wood Mallesons' current main track is the 3C field, the unique magnesium aluminum titanium surface treatment technology with UV coatings, there is another piece is our traditional industrial coatings, which is a large number of categories of very large market, how to re-layout in the field of industrial segmentation, we are planning, heavy anti-corrosion, construction machinery, profile coils, ceramic coatings and powder powder coatings are our key consideration of the section.
Speaking of Jinlitai has just announced the acquisition of 51% of the equity of Footprint New Materials, cutting into the field of automotive refinish paint, Yuan Xiang said, "The refinish paint and OEM original paint in the used car market are two completely different categories and tracks, the refinish paint is low-temperature paint, and the original paint is high-temperature paint, and its technical indicators and market demand are different." The number of cars in China that needs to be maintained every year is tens of millions, and the demand for vehicle repair and personalized color change is indeed not small, combined with the advantages of Jinlitai's existing market and customers, it will form a superposition effect of one plus one is greater than two in the field of repair paint. ”
Finally, Yuan Xiang said, "Jinlitai's recent series of development layouts have revealed our determination to push the enterprise to a new level with a sense of mission. What we have to do is to ride on the east wind of the independent brand curve overtaking, seize the best window period for the development of national automotive coatings, penetrate basic scientific research and industrial landing, and hold the future in our own hands! ”
Reporter Wang Liying
Edited by Hu Xinyu
Editor-in-Charge Sun Xiao