(Dongbo News Agency reporter/ Li Min) Looking at the global automotive industry cluster, Europe, the United States and Asia can be described as three-legged. Although the Asian automotive industry started late relative to the former two, it is the world's largest regional automotive market in the last 10 years. The development of the automobile industry in the region is mainly based on Japan, China and South Korea, and ASEAN countries are also full of momentum.
In the face of such a huge and active regional market, any economic and trade cooperation involving the automobile industry may bring about a huge chain reaction. The Agreement on Regional Comprehensive Economic Partnership (RCEP), which came into effect on January 1, 2022, will put a foot in the oil and light on the development of the Asian automotive market by stepping on tariff relief, intellectual property rights, and the movement of people. And when this foot goes down the throttle, who can run faster and farther?
Asia's auto industry has its own "magic power"
For the world's automobile industry, this is an era of change, with the introduction of energy conservation and emission reduction policies in various countries, compared with traditional fuel vehicles, new energy vehicles are "the future", unstoppable. However, whether it is a fuel vehicle or a new energy vehicle, its production and trade are inseparable from the two main sectors of vehicle production and parts production, but the core components of new energy vehicles are power batteries, drive motors and electronic control "three electricity" systems, which is the biggest difference between them and fuel vehicles.
The Japanese automotive industry has strong competitiveness in the world
Focusing on the RCEP region, the major automotive industries are actually concentrated in the Asian market. The three phalanxes represented by Japan, South Korea, China and ASEAN can be described as "magical" in the development of the automobile industry.
Japan and South Korea have the highest level of automobile industry development and are important exporters of vehicles and parts in the world, especially Japan, whose automobile industry has strong competitiveness in the world. However, in terms of new energy vehicles, although Japan has a strong first-mover advantage in power batteries and materials, the main force of its new energy vehicles is HEV (hybrid vehicle), which has limited requirements for battery performance, which leads to the lack of power of Japanese battery companies in terms of capacity expansion and technology iteration. Therefore, only Panasonic in Japan currently has strong battery supply capacity and technical reserves.
China is the world's largest automobile producer, consumer of new cars and an important exporter of auto parts. During the "13th Five-Year Plan" period, China's automotive vehicle and parts industry system is gradually improving, and the scale of production and sales accounts for about 30% of the global market. Especially in recent years, with the advantages in the power battery of new energy vehicles, China's new energy automobile industry has sprung up, rising against the trend under the new crown pneumonia epidemic, and even exported overseas. In 2020, for every 10 cars exported by China, 2 are new energy vehicles. From January to August, China exported 173,000 new energy vehicles, an increase of 4.5 times year-on-year.
But on the other hand, we must also see that there are still certain deficiencies in the development of China's automobile industry, which is prominently manifested as large but not strong, high-end deficiencies, low-end surpluses, and there are many shortcomings and breakpoints in the upstream and downstream of the industrial chain that need to be made up." Chen Bin, executive vice president of the China Machinery Industry Federation, pointed out. Taking the "three electricity" system of new energy vehicles as an example, to some extent, in addition to the power battery, the rest of China's new energy vehicles are highly dependent on the import of Europe, the United States and Japan. There are also shortcomings in high-end chips and high-speed bearings.
ASEAN has basically formed an industrial system represented by Thailand, Indonesia and Malaysia, led by Japanese companies, and has vigorously promoted the localization of the automotive industry in recent years, and is an important auto parts supply base in the world. In particular, the automotive chip industry in Thailand and Malaysia is relatively developed, and the supply chain is relatively complete, including the manufacture of signal chips and analog chips required for new energy vehicles.
There is an active trade in parts and components in the RCEP region
Before the signing of the RCEP, the cooperation between these three phalanxes in the automotive industry was actually very close. In terms of vehicle trade, China, as the world's first new car consumer, is also an important vehicle export market for many RCEP members, only in 2020, Japan, Thailand, Indonesia, South Korea, Malaysia 5 RCEP members exported a total of 335,000 vehicles to China, accounting for 35.91% of China's total automobile imports; among them, Japan ranked first. The Asian market is currently the largest export market for China's new energy vehicles, accounting for 42%.
In terms of components, intra-regional trade is active. China's imports of parts from Japan and South Korea, and the amount of parts exported to Japan and South Korea, account for 1/5 or 1/3 of China's total auto parts import and export volume; China's import and export trade with many ASEAN countries has achieved positive growth in 2020. In terms of investment, Japan has been actively deploying in Southeast Asia since the 1990s and building production bases in the region. In recent years, companies from China and South Korea have also accelerated their layout in the ASEAN market, hoping to optimize costs and occupy more market share. These foundations and trends provide more imagination space for the linkage of the Asian automotive market after the RCEP takes effect.
What will RCEP bring to the Asian automotive market?
From the perspective of the industrial chain of automobile production, the upstream mainly includes the supply and production of key raw materials and core components, the midstream is the manufacture of the whole vehicle, and the downstream covers aftermarket services such as finance, insurance, and maintenance. The content of RCEP in the trade of goods, intellectual property rights, natural person movement and other aspects will more or less affect the future cooperation of the entire Asian automotive industry chain.
Overall, although under the framework of the relevant free trade agreements, the tariffs on imported parts between China and Singapore (Sealand), China and Australia and China-ASEAN have been reduced to 0, and the tariff level between China and South Korea is also low, under the RCEP framework, China will gradually reduce taxes on Japanese and South Korean auto parts in the next period of time (10, 15 or 20 years later), and most product tariffs will be reduced to 0. In the long run, this will undoubtedly have a greater impact on the upstream of the regional automotive industry chain. However, compared with the existing multi-bilateral free trade agreements in the region, RCEP has not made many breakthroughs in vehicle trade, and only a few special vehicles or a very small number of luxury cars with specific displacement can enjoy tariff concessions, so the impact of RCEP on Chinese consumers' purchase of imported cars is relatively limited. With the adjustment of the upstream industrial layout, the potential of the downstream service market will be further stimulated.
For Japan, South Korea, China, and ASEAN, under the influence of the entry into force of the RCEP, they will each usher in new opportunities and may face some new challenges.
Japan and South Korea, especially Japan, as the automotive powerhouses in the region, will reap significant benefits from the entry into force of the RCEP. The RCEP has enabled China and Japan to reach a bilateral tariff concession arrangement for the first time, and the Tariffs between China and Japan will be significantly changed from the current 8%. In the future, nearly 90% of Japan's auto parts exports to China will achieve zero tariffs. Relying on the large-scale vehicle production capacity layout in the Chinese market, the more stable export and cost reduction of Japanese auto parts will make Japanese cars more competitive in the Chinese market and help their long-term development in the Chinese market. Of course, this also means that Chinese consumers are expected to buy Japanese cars at more favorable prices in China, or carry out related parts repairs.
In addition to Chinese consumers, RCEP will also have a certain impact on the development of China's automotive industry. Among them, the positive parts include the reduction in the cost of imported auto parts from China by countries such as Japan and South Korea, so that some of the orders that previously belonged to North American and European countries may be transferred to China, and China's parts export trade may increase, which will be highlighted in new energy auto parts. With China's technological and production capacity advantages in power batteries, some battery companies are also expected to promote the market opportunity period of electric vehicles (EVs) in Japan and enter the supply chain system of new energy vehicles in Japan. With the tariff on electronic control parts imported from Japan and South Korea reduced to 0, the comprehensive competitiveness of China's new energy vehicles will be further enhanced, and its current strong export momentum will be "like a tiger".
China is a big producer of automobiles
In addition, the intellectual property related provisions of the RCEP may stimulate the innovation of China's new energy vehicle technology. At present, there are still some bottlenecks in the development of New Energy Vehicle Technology in China, and Japan and South Korea have technological leading advantages in related fields. The existence of RCEP intellectual property restriction and protection clauses can effectively protect the intellectual property rights of Japan and South Korea, and enhance the confidence of Japan and South Korea in carrying out technological exchanges and high-level technology investment with China.
Of course, because most parts production is a labor-intensive industry, with the lower purchase price of parts, ASEAN countries with lower labor costs will have more advantages in parts production, which will bring greater challenges to similar auto parts manufacturers in China. Investors may transfer Chinese domestic investment to ASEAN countries and build factories and production locally, which will accelerate ASEAN's formation of a cluster center for the Asian auto parts industry chain.
ASEAN countries have rich resource reserves in the key raw materials required for new energy vehicles; Thailand, Malaysia, Indonesia and other countries hope to vigorously develop their own new energy vehicle industry on the basis of the original automobile industry chain, and welcome relevant foreign investment. In this context, the more efficient natural person movement arrangement in the RCEP will help car company technicians to carry out cross-border mobility more conveniently, which will undoubtedly add icing on the cake to attract foreign investment from ASEAN and further promote the previous trend of China, Japan and South Korea to lay out the ASEAN auto market. The arrival of foreign capital will provide more energy for the development of the new energy vehicle industry in ASEAN, the localization of new energy vehicle production, and the development of the local automotive aftermarket service industry.
Turn the pieces into pieces and look at the world. From the perspective of the global three-legged automotive industry cluster, RCEP will enhance the external vehicle competitiveness of the Asian automotive market as a whole and promote the further optimization of the Asian automotive industry chain. Yuan Zhijun, general manager of Guangxi Automobile Group Co., Ltd., said in an interview with this reporter: "Through close cooperation in the RCEP region, the re-integration of capital, technology, cost and other resources will reshape the new value chain and industrial chain of the global auto market, which is not only conducive to reducing the manufacturing and circulation costs of auto parts in the region, but also conducive to creating a more competitive vehicle force in the Asian auto market." "Therefore, it can be said that RCEP is not only a win-win for member countries, but also a win-win situation for the Asian automotive market."
China's new energy vehicles have a certain first-mover advantage
Seize the opportunity, the time is not waiting
Although the RCEP has stepped on the development of the Asian auto market, only by grasping its own "steering wheel" can the automotive industry in member countries be expected to take advantage of the momentum to move forward. Opportunities never monetize themselves, and challenges can turn pressure into motivation.
Japan and South Korea can reintegrate their resources and make a rational layout in the region, while consolidating the ASEAN market and further expanding the Chinese market, while enhancing their competitiveness in the international market. In the field of new energy vehicles, we can also strengthen cooperation with Chinese companies to jointly explore third-party markets such as ASEAN, Australia and New Zealand and Europe.
ASEAN countries can seize the new opportunities of China's capacity transfer and multinational enterprise investment, actively layout the new energy automobile industry, accelerate the industrialization process, and increase employment rates to boost the economies of various countries.
In fact, there is only a road of high-quality development in front of China. On the one hand, China urgently needs to enhance its independent research and development capabilities, and promote knowledge and technology trade and knowledge and technology exchanges and learning between China, Japan and South Korea through cooperation with the leading automobile production enterprises in Japan and South Korea that have invested in and set up factories in China to improve the level of R&D and manufacturing of China's core components; on the other hand, China needs to consolidate the domestic production chain while expanding a stable regional supply chain, forming a domestic and international production cycle where high efficiency and safety coexist; and further expand the international market demand for China's new energy automobile industry. Enhance the pull effect of external demand on China's auto industry and help optimize and upgrade China's auto industry chain.
"The technology and sales of New Energy Vehicles in China are in the first echelon in the world, with their own advantages and status, but opportunities and challenges coexist. Whether it is a local government or an enterprise, it is necessary to lay out in advance and keep up with policy trends. Yuan Zhijun said that before and after the RCEP came into effect, the Guangxi government and enterprises actively carried out relevant layouts, starting from 2020, Guangxi will focus on building a southern automobile export manufacturing base facing ASEAN, focusing on the development of new energy vehicles, building a convenient automobile export logistics system, actively exploring overseas markets such as ASEAN and Japan, and continuously integrating into the domestic and international dual-cycle development. Guangxi Automobile Group Co., Ltd. (hereinafter referred to as Guangxi Automobile Group) has also begun to lay out the new energy vehicle market from 2020 onwards, and won "a place" by using logistics vehicles by manufacturers.
In January 2022, Guangxi Automobile Group signed an agreement with Japan's ASF Co., Ltd. to consign the development and mass production of micro-electric logistics vehicles
"In 2021, we achieved sales of 10,016 new energy logistics vehicles, an increase of 112.8% year-on-year, ranking second in China's new energy logistics market. New energy logistics vehicles have also become a 'golden key' for us to open overseas markets. According to Yuan Zhijun, just in January 2022, Guangxi Automobile Group and Japan ASF Co., Ltd. signed a contract for the commissioned development and mass production of micro-electric logistics vehicles, and the two sides will cooperate to develop a pure electric logistics vehicle, which will be developed and produced by Guangxi Automobile Group at the new energy vehicle base in Liuzhou, China, and R&D expenses will be provided by Japan's ASF Co., Ltd. and sold in Japan. The company will reach CNY 210 million, with mass production in December 2022 and a joint effort towards a target of 100,000 units by 2030.
The cooperation will give full play to the cost-effective, high-quality car manufacturing experience and manufacturing advantages of the whole supply chain of Guangxi Automobile Group, and accelerate the development of micro-new energy logistics vehicles in the Japanese market, which is undoubtedly a useful exploration of sino-Japanese cooperation in new energy vehicles after the RCEP takes effect. With the help of the "throttle" of RCEP, we expect that the Asian auto market and countries in the region can drive on the "highway" of win-win cooperation as desired.
New energy vehicle industry chain
Source: Tobosha
Editor: Tan Qianyuan
Approved: Tang Yan