Japan's auto parts "fallen" China out of danger

"Undebt Doors" dragged down Japan's parts without internationalization

When the Chinese auto industry is excited about the recovery, the ocean is still shrouded in dark clouds. The plight of General Motors and Chrysler, the two largest auto giants in the United States, finally burdened their Japanese suppliers.

However, the formerly known as the weak Chinese automotive zero-parts industry, this time by the global vehicle giant's negative impact is not great. Perhaps during the weak hours, it has not been able to successfully enter the overseas blindly, but instead “save” a life for a Chinese auto parts company.

Japanese auto parts "collapse"

According to sources from Japan, because many Japanese auto parts companies supplied Chrysler and General Motors, after the two US giants were in trouble, they owed a large amount of supply money and did not pay on schedule. Therefore, in desperation, Japanese auto parts companies can only consider applying for US government payment guarantees.

Previously, Aisin Seiki, NGK Corporation, Japan Spring Co., Ltd. and Takada have applied for U.S. government payment guarantees on receivables from General Motors and Chrysler. Among them, Japan Spring Co., Ltd. and Takada's guarantees to the U.S. government were 400,000 U.S. dollars and 4.6 million U.S. dollars, respectively. General Motors owes Japan Spring Co., Ltd. approximately 1.6 million U.S. dollars to pay the purchase price, but it is not known how much money is owed to Takada. (Considering that General Motors owes Japan Spring Co., Ltd. approximately 1.6 million U.S. dollars for the payment, and the guarantee amount is 400,000 U.S. dollars; then GM owes at least 10 million U.S. dollars in purchases).

Chrysler Motors, which has already filed for bankruptcy protection, has also involved others. The Mitsui Mining and Smelting Company, which manufactures gearboxes, supplies Chrysler with approximately 3 billion yen each year. This time, the U.S. government is also required to pay approximately 300 million yen on behalf of Chrysler. USD 3.11 million) of the payables.

Prior to this, I have preliminary statistics on the operating conditions of global auto parts companies. In general, Japan's parts and components companies have suffered a lot and have suffered more losses. Imagine that even auto parts companies like Denso, which can compete with Bosch in certain areas, have all “fallen into the shadows”. In fiscal year 2008 (April 1, 2008 to March 31, 2009), Denso suffered a net loss of 84.1 billion yen (approximately US$869.6 million) and a fiscal 2007 profit of 244.4 billion yen.

In the first three months of 2009, the fall of Denso accelerated. From April to December 2008, despite a year-on-year drop of 80% in net profit, Denso’s net profit was still a low profit of 37.1 billion yen. It can be seen that in the first quarter of 2009, the amount of loss of Denso was almost 1,200 billion yen. In fact, the danger arrived long ago at the end of 2008. In the fourth quarter of 2008, Denso's net profit turned from profit to loss, with a loss of 21 billion yen (net profit of 73.8 billion yen in the same period last year).

I do not know how long this car component will last for a long time. (Of course, it cannot be completely blamed on American auto companies. The fall of Denso has also partly started with Japanese auto companies such as Honda, Toyota, Nissan, etc. These Japanese auto companies are in the United States. Sales or global sales declines have also reduced the demand for auto parts, which has caused the cost of parts and components companies to be difficult. As for whether or not the supplier’s money is owed as GM and Chrysler have not been returned on time, it is still not know.)

Lucky China Supplier

These days, I often think that we have not yet globalized. We have not truly internationalized. Is it a gospel?

At least before this global crisis!

If the weak Chinese auto parts industry, like toys, clothing, etc., has already poured into the US and other overseas OEM markets. Big price wars, even allowing the other party to default on payment (after all, at the time who could believe they would fall into bankruptcy). So what will we face today?

Will it be the same as toys and other products that will be the same as last year's return of rural workers in the Pearl River Delta? I am afraid that it may be even more serious. How many auto parts companies are there in the Mainland? Some of the powerful companies have many local workers. Once they have encountered such a large amount of accounts payable, what do these companies and these workers live on?

Do not oppose! If you think that China's domestic demand can support these companies, then I think - this may be just a dream. Not only can domestic demand fail to smooth these holes, but in the worst case, these auto parts companies have no money to operate, but they will affect the production progress of domestic vehicle companies.

If you can refer to the global industrial chain crisis from the United States as "plague". Then, this terrible infectious disease will quickly erode the Chinese auto industry without resistance.

In a sense, I think China is fortunate. Fortunately, due to its own or trade protection and other reasons, China's auto products have not been able to enter the US market on a large scale. Otherwise, it may be that Hong Kong people are buying Lehman bonds.

At the right time, do the right thing.