Behind the growth of the automotive industry today, there are countless stories of silently dedicating components.

　　The automobile, praised as a masterpiece of modern industry, is a large and complex machine composed of tens of thousands of components. These components not only constitute the soul of a car, but also determine its performance, safety, and intelligence level. However, with the continuous evolution of technology, the automotive parts industry is also rapidly advancing on the path of innovation and innovation. From traditional engines and braking systems to modern intelligent cockpit and electric drive technologies, the automotive parts industry is undergoing an unprecedented transformation.

　　At this moment, we stand at a crossroads full of opportunities, and the five major track opportunities show exciting development prospects.

　　PART1

　　Industry Status

　　The automotive parts industry is the foundation that supports the development of the automotive industry and plays a key role in the automotive industry chain.

　　In recent years, the output value of China's automobile parts and accessory manufacturing industry has accounted for over 40% of the total output value of the automobile manufacturing industry. Currently, the ratio of China's automobile parts output value to the total vehicle manufacturing output value is about 1:1. Compared with the mature European and American automotive markets, the ratio of component manufacturing output value to vehicle manufacturing output value in the automotive industry is usually 1.7:1, which means that China's automotive component manufacturing industry still has huge growth potential in the future.

　　It is expected that by 2026, the main business revenue of China's automotive parts industry is expected to exceed 5.5 trillion yuan.

　　In the automotive parts industry, the upstream supply chain includes raw materials such as steel, plastic, rubber, and electronic components, while the automotive parts manufacturing industry is located in the middle of the automotive industry chain. The downstream market is divided into the complete vehicle supporting market and the after-sales maintenance market based on different customer needs, both of which are crucial for the stable development of the parts industry.

　　Traditional automotive components include engine systems, transmission systems, braking systems, steering systems, automotive electronics, chassis systems, interior and exterior decorations, etc. The components of new energy vehicles do not include engines and gearboxes, but instead include core components such as drive motors, motor controllers, and power battery systems.

　　According to statistical data, as of 2022, the size of China's automotive parts market has reached 1.5 trillion yuan, with an annual growth rate of about 5%. In 2021, the annual growth rate was about 12%. Traditional automotive components such as engine systems, transmission systems, suspension systems, body and accessories have a large market share, while high-performance components and new energy components have become the growth highlights of the market.

　　In summary, the Chinese automotive parts industry plays a crucial role in the automotive industry and is expected to continue to grow in the future, especially in the field of new energy vehicles. The development of this industry is crucial for the prosperity of China's automotive industry.

　　PART2

　　Development Trends

　　The automotive parts industry is facing multiple development trends that will shape the future of the automotive parts manufacturing industry:

　　01 New Four Modernization Trends:

　　With the rapid development of technologies such as 5G, the Internet of Things, and artificial intelligence, automobiles are transitioning towards electrification, intelligence, networking, and sharing. This has driven the automotive parts industry towards lightweight, intelligent, and environmentally friendly development.

　　The components now have more functionality and practicality, while environmental demands promote lightweight design to reduce fuel consumption and emissions. Lightweight technology, such as the use of high-strength steel, aluminum, magnesium alloys, and composite materials, has become a key development direction.

　　02 Specialized division of labor:

　　The automotive industry chain tends towards specialized division of labor, with vehicle manufacturers responsible for the design and production of the overall structure and components, while component manufacturers focus on the production of components and accessories and provide technical support. The technological research and development capabilities of component companies are crucial for the technological upgrading of vehicle manufacturers.

　　03

　　Development of new energy vehicles:

　　The rapid growth of the new energy vehicle industry has posed new technological and market demands for component companies. Enterprises need to closely monitor market trends, adapt to the characteristics of new energy vehicles, and improve their R&D and synchronous development capabilities to meet the needs of vehicle manufacturers.

　　04

　　Consumer demand upgrade:

　　Consumers are increasingly paying attention to the quality, appearance, interior, performance, fashion, technology, and environmental friendliness of cars. Automotive component companies need to continuously strengthen product research and development and process improvement to meet diversified and personalized needs.

　　In short, the automotive parts industry is moving towards a more intelligent, environmentally friendly, and lightweight direction, while also adapting to the rapid rise of new energy vehicles and meeting the constantly upgrading consumer needs. These trends will shape the future pattern of automotive component manufacturing and have a profound impact on the development and competition of the industry.

　　PART3

　　Track Opportunities

　　A car is composed of tens of thousands of components, for example, a sedan can have over 10000 components, with a wide variety of types, making the industry extremely fragmented. Generally speaking, automotive components can be divided into eight categories: engine, brake, chassis, transmission, steering, driving, automotive electronics, general components, and standard components.

　　With technological innovation and the gradual integration of domestic component supporting systems with the world, China's automotive component industry will maintain a good development trend, and local component manufacturers are expected to accelerate domestic substitution and gain market share.

　　From the perspective of market space, measured in terms of price and quantity, the sustainable increase in "bicycle value" and "penetration rate" under the trend of electric intelligence in 2023, as well as the track that crosses the cycle, is worth paying special attention to, including high growth and high-quality sub areas such as intelligent cabins, integrated die-casting, wire controlled chassis, wiring harnesses and cables, and electric drive.

　　1 Intelligent cockpit

　　With the development of automotive intelligence, intelligent cockpit has become an important selling point. It is expected that the market size of China's intelligent cockpit will reach 212.7 billion yuan by 2026, with a CAGR of about 17% from 2022 to 2026, and the penetration rate is expected to increase from 59% to 82%. This includes highly integrated infotainment systems, driving assistance functions, multimodal interaction, and advanced cockpit control.

　　The demand for intelligent cockpit in the market is constantly increasing, as it provides a better user experience and more functions, such as voice assistant, gesture control, high-resolution display screen, etc.

　　With the popularization of electric vehicles and autonomous driving technology, intelligent cabins will continue to become an important growth field.

　　2 Integrated die-casting

　　Integrated die casting technology is an advanced method for manufacturing automotive components. By integrating multiple components into a single component, the weight of the car can be reduced and the structural strength can be improved.

　　Some leading automakers such as Tesla have already adopted this technology, and other manufacturers are expected to follow suit. Integrated die casting is expected to play an important role in lightweight automotive manufacturing.

　　3-wire chassis

　　The wire controlled chassis technology enables the suspension, steering, braking and other functions of the car to be controlled through electronic signals, rather than traditional mechanical connections. This is very important for achieving high-level autonomous driving and improving driving safety. The field of wire controlled chassis has high technical barriers, but with the popularization of electric vehicles, market demand will increase.

　　4 wiring harness cables

　　Car wiring harness cables are a key component of the internal electrical system of automobiles, used to transmit electrical energy and data signals.

　　With the increase of electric vehicles and the continuous development of intelligent technology, the demand for high-quality and high-performance wire harness cables is increasing. This market also involves innovation in materials science, production processes, and quality control.

　　5 Electric drive

　　The electric drive system, including the drive motor, motor controller, and transmission system, is the core of electric vehicles.

　　With the rapid expansion of the electric vehicle market, the demand for electric drive systems is also constantly increasing. This field involves innovation in battery technology, motor design, electronic control, and other aspects to improve the performance and range of electric vehicles.

　　Overall, with the continuous promotion of the trend of electric intelligence, the above-mentioned high growth and high-quality sub sectors will continue to have huge development potential in the automotive parts industry. Innovation and development in these areas will help improve car performance, safety, and user experience, while also providing business opportunities for manufacturers and suppliers.