Tramway News: Recently, the Ministry of Industry and Information Technology issued the "Notice on Carrying out the Pilot Work of Entrusted Production of New Energy Vehicles" (hereinafter referred to as the "Notice"), which mentions that for the pilot work of entrusted production of new energy vehicle products entering the "Announcement", the conditions for entrusting enterprises are to be admitted through new energy vehicle production enterprises, and the conditions for entrusted enterprises are to enter through new energy vehicle production enterprises, and have the same production qualifications as entrusted production products.
In simple terms, it is required that both parties with entrusted production relations (OEM production) have production qualifications, which seems to be a strict management of the model of OEM production.
However, judging from the content of this notice, requiring both parties to have qualifications is the way to manage, but its purpose is not here.
At the beginning of the notice, it is clearly mentioned that "in order to implement the "New Energy Vehicle Industry Development Plan (2021-2035)" (hereinafter referred to as the "Planning"), encourage R&D and production capacity cooperation among road motor vehicle manufacturers, build a new energy automobile industry pattern with reasonable layout, efficient operation and survival of the fittest, and promote the high-quality development of the industry...".
The "Planning" also emphasizes that it is necessary to further promote the reform of "decentralization and management of services", further relax market access, implement inclusive and prudent supervision, and promote the healthy and orderly development of new formats and models. Establish and improve the exit mechanism of zombie enterprises, strengthen the supervision and inspection of the maintenance of enterprise access conditions, and promote the survival of the fittest. Give full play to the role of the market mechanism, support the merger and reorganization of advantageous enterprises, become bigger and stronger, and further improve industrial concentration.
Under such a top-level policy, it is impossible and will not directly kill the OEM model, and the purpose of strict management is the second half of the opening sentence of the "Notice".
And in the requirements of pilot selection, the Notice also mentions that "the Ministry of Industry and Information Technology organizes the review of the pilot program and selects pilot enterprises according to the principle of 'mature one, select one'." Priority will be given to supporting the pilot project for both partners who have committed to mergers and reorganizations."
Eliminating backward production capacity and encouraging mergers and acquisitions can be said to complement each other. Since it is a pilot, it means that it will not be fully promoted, and the development of the pilot work not only gives backward enterprises the opportunity to be merged and reorganized by others, but also allows unqualified but capable enterprises to build cars to obtain qualifications.
In fact, from the perspective of the national management policy direction of new energy vehicles, the OEM model is also gradually liberalizing.
In 2018, the Ministry of Industry and Information Technology issued Order No. 50 - "Measures for the Administration of Road Motor Vehicle Manufacturers and Product Access". It is mentioned that R&D and production capacity cooperation between road motor vehicle manufacturers is encouraged, and road motor vehicle manufacturers that meet the specified conditions are allowed to entrust processing and production. Encourage road motor vehicle R&D and design enterprises to cooperate with production enterprises, and allow R&D and design enterprises that meet the prescribed conditions to borrow the production capacity of production enterprises to apply for road motor vehicle production enterprises and product access. This is also the first time that the Ministry of Industry and Information Technology has made it clear that it allows automobiles to be commissioned for processing and production.
Although OEM is allowed, the policy also adds preconditions, that is, enterprises that meet the specified conditions. However, the follow-up has not been clear what the specific conditions are and which enterprises meet the conditions. But under such a policy, Wei came to find Jianghuai OEM, Xiaopeng to find Haima OEM, Zero Run to find Yangtze River OEM, and later some companies achieved mass production of their products through the OEM model and then obtained qualifications through mergers and reorganizations.
In 2020, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, and the People's Bank of China jointly issued the "Negative List for Market Access (2020 Edition)", which once again proposed: orderly liberalization of new energy vehicle OEM production, promotion of self-inspection and self-certification, and implementation of brand authorization pilots.
The competent department has made it clear that OEM production should be liberalized, but it is an orderly release.
In 2021, Guo Shougang, deputy director of the First Department of Equipment Industry of the Ministry of Industry and Information Technology, said during the 2021 China Automotive Forum that in the next step, the mainland automobile industry will focus on improving the level of the entire industrial chain, accelerating the transformation and upgrading development, striving to promote the brand upward and optimizing the industrial development environment, and deepen the reform of decentralization and management services in the field of automobile production, orderly liberalization of foundry production, promote the improvement of industrial concentration, curb blind investment and investment construction.
In the system of the Ministry of Industry and Information Technology, the First Department of Equipment Industry is the department that directly manages the automotive industry, and the attitude towards OEM production is orderly liberalization, while at the same time curbing blind investment and investment and construction.
It can also be seen from the current data that the automotive industry is overcapacity. According to the data of the Federation of Passenger Vehicles, by the end of 2021, the total production capacity of passenger cars in the country will be 40.89 million units, and the capacity utilization rate will only be 52.47%, although it will increase by about 4% compared with 48.45% in 2020, but the national automobile production capacity is still in excess.
For new energy vehicles, a total of 3.326 million units will be sold in 2021, while the dedicated production capacity of new energy passenger vehicles has been 5.695 million units, and the capacity utilization rate is 58.4%. And enterprises that have already possessed production qualifications have 10.46 million vehicles under construction capacity to be completed and put into operation.
Although the overall overcapacity, for some enterprises, the production capacity is obviously insufficient. For example, BYD has a backlog of more than 400,000 vehicle orders, and the delivery time is more than two months.
New energy vehicles are the direction of the future, but if there is no restriction, the arbitrary layout of production capacity will eventually lead to a huge waste of resources. The industry as a whole is overcapacity, some companies are insufficient capacity, and there are many new car-making tracks, under such conditions, the OEM model or a sword to solve the problem.
Although this is a pilot, the "Notice" not only explains the qualifications of both sides of the OEM production, but also divides the rights and responsibilities of both sides, and the attribution of the double integral is also clear, and it is only a matter of time before it is fully implemented.