Written by | Liang Qiumeng
Editor| Chen Hao
Produced | Automotive Sankei
Recently, some senior executives of independent brands revealed to us that the proportion of joint venture brands to chips has greatly affected the market share of sales.
"The performance of car companies in the first half of last year was still the real performance of the market, but since the second half of last year, it has not been normal."
The implication is that Tier1 suppliers are excessively biased in favor of joint venture brands when distributing goods, and today's sales performance can no longer reflect the market position.
Also in mid-March, another car company revealed to the self-media that at the end of last year, Bosch and other suppliers were repeatedly requested by various joint venture brands to increase the resource tilt of joint venture brands.
"You can understand it this way, before it can be seen as a bowl of water flat, but after the lack of core supply is tight, the joint venture brand is no longer a bowl of water flat, but to eat more and occupy more." The source explained it this way.
In response to this rumor, Bosch China officially responded: "Our principle is openness and transparency. All are Bosch customers, try to level the bowl of water."
Both parties have their own opinions, and we have no way of verifying whether their own brands have been treated differently by Suppliers such as Bosch. However, it is a fact that the current automotive market landscape depends on Bosch's "hand of God".
NO.1
[Is "The Hand of God", fair?] ]
According to online public information, the lack of core in the automobile industry in the second half of 2021 is mainly affected by the intensification of the epidemic in Southeast Asia. Southeast Asia's share of the semiconductor packaging and testing industry, which accounts for 27% of the world's semiconductor packaging and testing industry, has directly led to difficulties in the supply of Bosch's ESP (Body Electronic Stability System) /IPB (Parking Brake) and VCU (Vehicle Control Unit) products.
Since car companies reflect that the uneven distribution of suppliers such as Bosch started from the middle of last year, we tried to compare the share changes of several major independent brands and several joint venture brands last year. (Since Japanese brands are basically a separate supply system, this table does not include Japanese brands.) ）
As shown in the chart above, Chang'an has been below the baseline of 6.7% since the second half of last year, except for January this year. Except for December, the Great Wall is basically below the 5.1% baseline.
That is to say, if the sales volume from January to June 2021 is a normal performance, then the two have basically not stepped on the normal rhythm after July. In contrast, SAIC Volkswagen and SAIC-GM have a month-on-month upward trend in the second half of last year.
The market share of Chang'an and the Great Wall did not improve until February this year. For the decline in sales, Changan said that the reason was "lack of core", and Great Wall said that "the LACK of Bosch ESP". From the terminal point of view, some channel-side statisticians said that changan automobile's average daily store volume is not much different from last year, which shows that the core of its sales decline is indeed chip supply.
A suspected "report from various departments of Changan Automobile" reflects the shortage of materials
Zhang Zhihong, senior manager of the Network Interaction Department of Changan Brand Public Relations Department, told Auto Industry and Economics, "The lack of core is Changan's current top priority, and due to the lack of core, sales are expected to decline by 50% in March." ”
Some insiders familiar with the lack of cores in various car companies pointed out that the speed of distribution can reflect that there is indeed a "chain of contempt" in Bosch's chip supply.
Among them, the luxury brand BBA belongs to the "upper seat", followed by Volkswagen, American car, European system, followed by Shanghai real estate car, other independent brands at the bottom.
According to the analysis of automotive industry and economics, assuming that the situation is true, then the reason why the car companies located in Shanghai are preferentially treated by Bosch should not be unrelated to the fact that the Headquarters of Bosch (China) is also located in Shanghai. This may also be one of the reasons why FAW-Volkswagen's share has fallen much more than SAIC-Volkswagen.
In fact, the reason why Bosch has a strong right to speak has a lot to do with the current chip acquisition link.
In the Chinese market, auto companies need to go through many links to obtain a chip: wafers, packaging and testing, chip manufacturers, first-level agents in China, car companies Tier1 suppliers, and finally car companies. That is to say, car companies can not see the chip itself in most cases, and the Tier1 supplier responsible for delivering modules led by Bosch is a barrier that cannot be avoided.
The reason why Bosch's supply is so sought-after is that it is irreplaceable. Bosch accounts for about 70% of the market share of China's automotive ESP systems, and the other top few are Continental, Wandu and so on. Local suppliers received some new orders last year, but "the core that local suppliers can get is still incomparable with companies like Bosch."
NO.2
[Bosch: Third-party supervision of the distribution]
In July last year, Bosch officials revealed that only about 20% of customer orders can be satisfied, and the order satisfaction rate in August has increased slightly, but it is still less than 50%. Chen Yudong, president of Bosch China Investment Co., Ltd., recently said that the chip situation has not improved, and the gap in February and March this year is still very large.
In the case that many car companies have no rice to cook, how likely are Tier1 suppliers to favor joint venture brands?
Zhang Xiang, an automotive analyst, believes that "Bosch should have a consideration for the thickness of profits. The average product configuration of the joint venture brand procurement is higher than that of domestic car companies, and the purchase price is higher, and the profit is high for Bosch. ”
However, many people believe that at a time when the current international political situation has almost awakened the "nationalist" flood beast, Bosch cannot take huge risks and treat its own brands differently.
Chen Yudong, president of Bosch China, said last year that in 2021, Bosch has formulated a very standardized chip "distribution" principle.
"We have a fairer mechanism for distribution, according to the needs of customers' original orders to roughly and fairly distribute, whether it is traditional car companies or new forces, how much (order volume) we have entered here, we allocate according to the fair proportion, try to ensure that everyone can be similar."
Recently, in the introduction interview, Bosch insiders also stressed that Bosch's global distribution has asked a third-party audit company for assistance.
Some voices in the industry believe that considering the long-term interests, Bosch does not need to bet decades of moral reputation in China for short-term profits.
In 2020, China has surpassed Germany for the first time as the number one customer of Bosch's automotive division. The importance of the Chinese automotive market to Bosch will also become increasingly important.
On the last day of 2021, Chen Yudong published the annual photo in the circle of friends, and he and the leaders of the Great Wall and Geely sat at the office door and waited for the core, which also showed Bosch's emphasis on independent brands.
First from the left: Chen Yudong, President of Bosch China
Second from left: Zhao Guoqing, executive director of Great Wall Motor
Third from the left: Geely Purchasing Director Fang Chenglong
In addition, it cannot be ignored that while Tesla and other new car companies are trying to overtake traditional car giants, there are also many cross-border players at the end of the automotive supply chain who are trying to break the monopoly of the international oligopoly of fuel vehicles such as Bosch and Denso. For example, Domestic Huawei, Foxconn, and even Midea, Hisense and so on. Huawei has also said on many occasions that it will do "The new car era, China's Bosch".
In the next few years, it is presumable that "Huawei" and "Bosch" will have a fierce battle.
At that time, Bosch needs the support of a group of independent brands, not suppression. Therefore, Bosch's partial private joint venture brand, at least at this stage, lacks sufficient reasons to operate.
NO.3
[Tesla and BYD, trying to be self-sufficient]
At a time when many brands are deeply influenced by Tier1 suppliers, two car companies seem to be outside the "hand of God".
One is BYD. Among the independent brands in the first camp, only BYD's market share has not decreased but increased.
However, last year, some joint venture brand suppliers revealed to the media that BYD's procurement staff was entrusting them to find some chips. But overall, BYD is very little affected by the "lack of core". Beijing BYD dealers told Autosemonic that the terminal supply was basically normal, and there was no shortage of other brands or delayed delivery of products.
It is understood that BYD began to engage in the research and development of IGBT 20 years ago, and developed and produced some MCUs on its own, and the chip self-sufficiency rate is relatively high.
"Last year, BYD helped many automakers solve some of the pressing problems by providing technical solutions that were replaced by different chips." Du Guozhong, deputy general manager of BYD's brand and public relations business department, said.
For the current shortage of ESP (electronic stability control system) in various car companies, BYD has also said that it is not out of stock. Unlike most car companies that rely on the ESP developed by Bosch, BYD chose to cooperate with Bosch to develop a set of line control dynamic system - BSC brake safety control system, similar to Toyota's VSC system and BMW's DSC system.
The system was officially mass-produced in June last year. According to BYD, this makes it easier for them to guarantee the supply of electronic stability systems for the body.
Another car company outside of BYD is Tesla. In fact, Tesla rarely mentioned the lack of cores in addition to explaining the chip shortage in the conference call after the release of the first quarter of last year.
In the second quarter of last year's earnings report, Tesla wrote: Tesla's team reacted quickly, alleviating the consequences of the chip shortage. At the time, Tesla's electrical and firmware teams were designing, developing, and validating new microcontrollers in 19 categories. Volkswagen Group CEO Diess also publicly praised Tesla's approach of "developing a new controller to solve the problem of missing cores".
Tesla's self-developed chips are not new. Tesla's most well-known self-developed chip is its autopilot chip, and its single chip AI computing power can reach 36TOPS.
It is worth noting that in addition to Tesla's own hardware and software capabilities, Morgan Stanley's research pointed out that the attention of Tier1 suppliers is also an important reason why Tesla is not obviously affected by the lack of cores .
Even if Tesla's current annual production scale is not large, suppliers believe that Tesla's annual production can reach several times in the next few years, and now maintain a good relationship with Tesla, so that it can continue to obtain Tesla's orders in the future.
NO.4
[Final Remarks]
Some British media have said that once China overcomes the chip problem, the chip will become worthless.
But for the auto industry, it seems more difficult to solve the shortage of automotive chips than to solve the shortage of consumer electronics chips.
Some professionals pointed out that there are several reasons for the difficulty of increasing the production of automotive chips:
First, the chip production capacity is mainly based on the demand expectations of consumer electronics to do planning, the total demand for automotive chips is less than 10% of the total number of chips, which is not decisive.
Second, compared with consumer electronics chips, automotive chips are relatively backward in technology. For chip manufacturers, once the technology is rapidly upgraded, the production capacity will be idle, and the technological upgrade is a high probability event.
Third, smart cars are setting off an electronic and electrical architecture revolution, evolving from distributed to centralized computing architecture. This will reduce the number of chips required, so chip factories are reluctant to blindly expand production.
In short, to solve the problem of lack of cores, we can look at technology in the long run, after all, this is where enterprises can really establish competitive advantages. We can also see the efforts of car companies in this regard, such as China FAW's strategic investment of hundreds of millions of yuan in automotive electronic chip developer Core Qing Technology, Dongfeng Company and China Xinke set up a joint laboratory to develop automotive chips.
But in the short term, it really depends on grabbing goods.
Sadly, in this short-term zero-sum game, there may not be a real winner.