Marketing Research Report

Transcription

1 Marketing Research Report February, 2014

2 CONTENTS Foreword... 1 Report Synopsis... 2 Study Results... 5 Introduction of Duxes Remanufacturing Business... 21

3 Foreword With the development of the circular economy, remanufacturing is highlighted as a strategic emerging industry in several Chinese administrative regulations of the highest authority, such as the 12 th Five-Year Plan. According to statistics, as of October 2012, Chinese production capacity of remanufactured auto parts reached 110,000 sets of engines, 60,000 sets of transmissions and 1 million sets of alternators/starters, while the actual output value only came to RMB 2.5 billion. By 2015, it is expected that the annual capacity of remanufactured engines will reach 800,000 sets while that of transmissions, starters and alternators will reach a total of 8 million sets. Meanwhile, it is expected that heavy reman products including engineering, mining and agricultural machinery will reach 200,000 sets altogether, with an output value of up to RMB 50 billion. With this in mind, it is beneficial for companies to enter China s reman market knowing the facts about current remanufacturers and their reman products. 1

4 Report Synopsis In January 2014, Duxes assisted CPRA in conducting the 2013 General Survey on China Automotive Parts Remanufacturing, which involved 21 representative firms focusing on remanufacturing in China in the fields of engines, transmissions, pumps, starters, alternators, turbo, steering gears, calipers and others. A great deal of valuable information was discovered in this survey leading us to many interesting conclusions. This chapter contains three parts describing the basic layout of the survey: the sample distribution, research content and research method. I. Sample Distribution The sample represented in the chart shown below includes 24 product lines from 21 firms. Obviously, some firms remanufacture more than one product. Most of the sample is taken up by transmissions, engines, and alternators and starters, which are the main force of China s auto remanufacturing. Chart: Production Distribution Transmisson 4% 4% 4% 4% 4% 4% 29% Alternator&Starter Machine Tool 4% 8% 13% 21% Injector 2

5 In this survey, the vast majority of the firms are domestic, representing 76.19%. Chart: Firm Distribution Domestic Firm Foreign Firm 23.81% 76.19% II. Research Content The content of the survey consists of five parts: production capacity, technical capacity, business operations, policy concerns, and difficulties with the following subdivisions used in the chart: Classification Subdivision Production Capacity Technical Output, Output Value and Profit Reman Equipment and Test Equipment Facility Construction Remanufacturing Technology 3

6 Classification Capacity Subdivision Technical Staff Core Utilization Rate Core Collection System Quality Audit Business Operation Environmental Protection System Audit Logistics System Sales Channels Concerns in Policies Authorization Level of State Financial Support Production Difficulties Sales Policy Barriers III. Research Method In this survey, a quantitative research method is applied to the questionnaire. As the source of the statistics, there are 21 questionnaires, which have been collected cumulatively. After collecting all the questionnaires, Duxes reviewed the data and carried out a statistical breakdown and analysis. 4

7 Study Results In this section, conclusions drawn from the data analysis will be introduced. Through the data, we can see much of the state of development in China s reman market. I. Production Capacity 1. Output & Output Value Proportion: Alternator & Starter Has Highest Output, While Carries Highest Output Value Chart: Output & Output Value Distribution (2013) 0% 20% 40% 60% 80% Output Output Value First Half Year Second Half Year First Half Year Second Half Year Output Value Output Second Half Second Half First Half Year Year Year First Half Year Alternator&Starter 14.95% 14.80% 30.62% 33.44% 18.76% 17.22% 30.36% 30.36% 15.23% 14.44% 19.93% 19.30% 5.18% 5.92% 7.41% 9.36% 2.56% 0.95% % 2.98% 2.53% 1.47% 1.35% 24.62% 29.92% 1.09% 1.02% Transmisson 13.68% 11.57% 0.95% 0.90% % 0.52% 0.88% Injector 0.72% 0.76% % Alternator&Starter Transmisson Injector 5

8 In terms of output proportion, most reman products remain at stable intervals with the exceptions of the oil pump and caliper, of which we can see the apparent float. Clearly, the top three reman products in output are alternators and starters, booster pumps and steering gears. Regarding output value, calipers and compressors have the widest margin of variation. Obviously, engines, booster pumps and steering gears occupy the highest output value by comparison. Chart: Output Value By Product (2013) (RMB) Per Unit of Output Value Average Alternator&Starter Injector Transmisson 6

9 2. Profit: Shows the Highest Profit Margin, Followed by Chart: The Total Profit Distribution (2013) (RMB) 5,100,000 First Half Second Half Total 5,360,000 4,600,000 4,100,000 3,600,000 3,100,000 3,220,167 3,496,500 3,600,000 3,080,000 2,600,000 2,100,000 1,600,000 1,100, , , , ,000 2,280,000 2,115,500 2,000,000 1,750,467 1,600,000 1,469,700 1,381,000 1,330, , , , , , , , , , ,000-50,000 90, , ,000 Transmission Alternator & Starter During the whole of last year, calipers, transmissions and booster pumps showed strong growth, with booster pumps easily showing the highest total profit. 7

10 Chart: The Profit Per Unit Distribution (RMB) 300, , ,500 Profit per Unit Average 250, , , , ,000 50, ,100 46,000 93,898 12,000 8,982 7,847 5,777 Transmission Alternator & Starter In terms of the profit per unit distribution, we can see alternator and starter production profiting most, followed by booster pump and steering gear. 3. Reman Equipment & Test Equipment: Alternator and Starter Producers Most Sufficiently Supplied Chart: The Total of Remanufacturing & Test Equipment (2013) (set) Remanufacturing Equipment(set) Test Equipment(set) Alternator & Starter Transmission Machine Tool

11 The following chart shows the quantity of test and remanufacturing equipment each company has. It is not hard to see that booster pump remanufacturers tend to have the most testing and remanufacturing equipment per company. Chart: Equipment (sets) per Company Test Equipment (sets) per Company Remanufacturing Equipment (sets) per Company Alternator & Starter Transmission Machine Tool The proportion of remanufacturing equipment to test equipment varies from 2.0 to 9.3, and the average coming to

12 Chart: Reman Equipment Num/Test Equipment Num Reman Equip Num/Test Equip Num (set) Average Machine Tool Transmission Alternator & Starter 4. Facility Construction: Most Sites are Still in the Planning Phase or Under Construction Chart: Total Remanufacturing & Test Equipment Facilities ( m2 ) (2013) 18,000 15,000 12,000 Average( m2 ) 11, , ,000 6,000 6, ,000 0 Built-up Under Construction Planning 10

13 Chart: Distribution on Production ( m2 ) (2013) Built-up Under Construction Planning Machine Tool Alternator&Starter Transmisson 0 25,000 50,000 75, , ,000 Transm isson Alterna tor&st arter Booste r Pump Machin e Tool Oil Pump Compr essor Steerin g Gear Built-up 3, , , , , , , , , Under Construction 1, , , , Planning 4, , , , ,000.0 A According to the feedback, engine remanufacturers have the most built-up sites, while alternator and starter remanufacturers have the most planned and under-construction sites. 11

14 II. Technical Capacity 1. Remanufacturing Technology: Most Required Technology Has Been Mastered, Especially Remanufacturing and Recovering Chart: Remanufacturing Technology (2013) (%) Mastered Technology Required Technology 28.9% 19.6% 15.5% 12.4% 10.3% 10.3% 3.1% 30% 20% 10% 0% 23% Remanufacturing 23% Recovering 19% Testing 12% Surface Treatment 10% Dismantling 11% Cleaning 4% Others 10% 20% 30% 2. Technical Staff: The Average Proportion of Technical Staff is 25%, with Reman Averaging 60% Chart: Rate of Technical Staff (2013) (%) 60% 40% 30% 20% 10% 0% -10% 60.00% 38.46% % 25.93% 23.08% 25.00% 13.32% 10.48% 9.38% 7.80% Machine Tool Technical Staff Rate Transmission Average Alternator& Starter 12

15 III. Business Operation 1. Core Collection: IAM is the Most Common Choice, Multiple Channels are Popular Chart: Num of Channel Types (2013) (number) End User Insurer Import 4S Shop Car Dismentling Factory Dealer OES IAM Workshop IAM and OES are the most popular choices, and exclusively being used in auto maintenance. Chart: Production Distribution of Channel Types (%) (2013) 100.0% Injector 25.0% 50.0% 25.0% 25.0% 50.0% 25.0% Car Dismentling Factory OES 25.0% 14.3% 16.7% Alternator& 25.0% Transmission 25.0% 100.0% 25.0% 25.0% 25.0% 28.6% 28.6% 14.3% 14.3% 33.3% 33.3% 16.7% 25.0% 50.0% 8.3% 33.3% 8.3% 16.7% 8.3% 4S Shop IAM Workshop Dealer Insurer Import End User 0% 20% 40% 60% 80% 13

16 2. Core Utilization Rate: Most Reman Products Utilization Rates are Greater Than 80% Chart: Core Utilization Rate (%) (2013) 80% 60% 40% 20% 0% 90% 87% 85% 85% 83% 76% 75% Core Utilization Rate Alternator& Starter Transmission Average 80% 63% Steering gear remanufacturers have the highest core utilization rate, while engines, turbo and compressors seem to have room to improve. 3. Audit System: Pump Reman Registers as Perfect in Audit Systems, While Transmission and Alternator and Starter Reman Needs to Improve Chart: Companies Passed the System Quality Audit (%) (2013) Pass the Quality Audit Pass the Environmental Protection Audit Establish logistics System 80% 60% 40% 20% 0% 71.4% 57.1% 57.1% Transmisson 66.7% Alternator&Start er 33.3% 100.0% 100.0% 100.0% 100.0% 80.0% 60.0% 14 Pump Others

17 4. Sales Channel: IAM Workshop and OES are the Most Common Channels Chart: Total Sales Channel Distribution (%) (2013) 6% 3% 6% 31% OES Dealer IAM Workshop Fleet Insurer 38% 16% Export Similar to core collection channels, IAM and OES are the most common sales channels. Chart: Sales Channel Distribution of Products (%) (2013) Transmission 11% 44% 11% OES 18% 27% 27% 9% Dealer IAM Workshop Export Fleet Insurer Alternator & Starter 25% 25% 0% 20% 40% 60% 80% 15

18 IV. Concern in Policies 1. Authorization: More Than Half of Remanufacturers Have Opening Authorization Chart: Total Distribution Authorization (%) (2013) Open Partly Open Not Open 27.8% 16.7% 55.6% The current pilot policy restricts engine reman and transmission reman accepting the OE s authorization, so it is not hard to see that most remanufacturers want the authorization to open. Chart: Distribution Authorization of Products (%) (2013) Open Partly Open Not Open 40% 60% Alternator&Starter Transmisson 25% 25% Others 67% 17% 17% 0% 20% 40% 60% 80% 16

19 2. Level of State Financial Support: Promoting Core Collection Most Common Choice Chart: The Distribution of Level of State Financial Support (2013) 23.1% 17.9% Infrastructure Investment Subsidized Product Promotion Promote Core Collection 30.8% 28.2% Strengthen Research and Development The reverse logistics for remanufacturing is still in its initial stage, and core collection has a lot of problems, especially in core quality and quantity. Chart: The Distribution on Products (2013) Infrastructure Investment Promote Core Collection Subsidized Product Promotion Strengthen Research and Development 0% 20% 40% 60% 80% Transmission 30% 30% 40% Alternator&Starter 17% 20% 27% 20% Machine Tool 17

20 V. Difficulties 1. Production: Different Reman Products Have Different Difficulties Chart: Difficulties in Production (number) (2013) Transmission Alternator&Starter Low technical level and need to expand production capacity Lack of core resources Sales: Market Immaturiry is the Problem of Most Common Concern Chart: The Total Difficulties in Sales (number) (2013) Market Immaturity 16 Presence of Counterfeit Competition 12 Lack of Customer Awareness The problems of greatest concern show the evaluations and expectations of remanufacturers regarding China s market. 18

21 Chart: Distribution of Products (2013) Machine Tool Market Immaturity Lack of Customer Awareness Presence of Counterfeit Competition Alternator&Starter 43% 29% 29% Transmisson 43% 29% 29% 0% 20% 40% 60% 80% 3. Policy Barriers: Lack of Tax Preference is of Most Concern Chart: The Number of Policy Barriers (2013) Imperfect policy in oil to gas Restriction on Core Collection by No.307 Lack of Government Incentivies Policy Barrier on Core Import & Export Lack of Tax Preference 19

22 Chart: The Proportion of Policy Barriers (2013) Imperfect policy in oil to gas Machine Tool Restriction on Core Collection by No.307 Lack of Government Incentivies Policy Barrier on Core Import & Export 6% 19% 31% 19% 25% Lack of Tax Preference Alternator&Starter 20% 20% 60% Transmisson 25% 17% 25% 0% 20% 40% 60% 80% Different remanufacturers have their own problems regarding the current policies. It seems that steering gear remanufacturers care more about core import and export, while the booster pump remanufacturers focus more on government incentives. 20

23 Introduction of Duxes Reman Business Duxes has been working on reman industry since 2008 when the NDRC released its first auto parts reman pilot program. Since then, Duxes has been continuously providing its unique services for domestic and foreign reman units in the China market with its industry consulting expertise and independent third-party perspective. We are currently the only independent consulting firm specially focusing on reman industry in China. Our Reman Consulting Business Sectors E-Publication: Reman Industry Focus China's only bilingual on-line platform for Chinese reman industry Comprehensive information, professional comments, policy tracking and on-line interaction Released monthly through e-channels Content Sectors: Industry Perspective In-depth Interviews Breaking News Policy Analysis Research Reports On-line Surveys Events Calendars 21

24 Reman Research Report (editor of Research Report: The Development of China s Auto Parts Remanufacturing Industry 2012 and Duxes Annual Reman Industry & Market Reports ) Various reports available for subscription: Periodical industry reports (such as annual reports) Market data statistics Theme-based reports Policy tracing reports Reman Consulting (strategic consulting for manufacturers starting remanufacturing business, and solutions in business optimization for remanufacturers) Our consulting services are focused on the following issues: Market Research: Research and analysis on end user market Specific products Market competition Other customer tailored requests. Strategic Consulting: Feasibility analysis Certifications and legalization Business model construction Market promotion programs 22

25 Our Online Platforms E-publication Subscription: Linkedin Group: Reman Industry Focus WeChat WeChat ID: remanif Sina Weibo Weibo ID: DuxesRemanFocus Our remanufacturing project team is always pleased to visit our customers China offices or facilities (whether in Shanghai or elsewhere) to have a better understanding of each organization s specific demands. We believe that our long-term focus on the remanufacturing industry will definitely help in developing your remanufacturing business in China. 23