Beijing Automotive Wants Auto Parts Industry to Build a Parts Base

"Beijing's automotive parts industry is on the verge of a revival," said a senior executive from a local parts company. In the past, he often expressed frustration about the decline of the city's spare parts sector. "It used to be a strong industry, but over time, it became fragmented and disorganized," he added. Recently, Beijing Automotive Industry Holding Co., Ltd. (BAIC) and Beijing State-owned Assets Management Co., Ltd. signed a major framework agreement, announcing plans to jointly invest nearly 1 billion yuan in establishing Beijing Automotive Components Co., Ltd. The new entity aims to create a modern auto parts industrial base in the capital. "This partnership will give a significant boost to the entire Beijing auto parts sector," said a high-ranking official from BAIC. "In the coming years, we expect the industry to enter a period of rapid growth and development." The revitalization of Beijing’s auto parts industry has long been needed. During the "10th Five-Year Plan" period, the city's automotive sector experienced remarkable growth, with companies like Beijing Hyundai, Beijing Benz-Dike, Beiqi Foton, and Beijing Auto Manufacturing making significant progress. However, the parts industry remained scattered, small-scale, and lacking a unified strategy—until now. Recent developments have brought renewed hope. Employees at Beijing Auto Parts Company have been busy exploring partnerships and collaborations. When contacted by reporters, manager Chen Weimin was on a business trip to Shanghai, only returning after nearly two weeks. He emphasized that the company is actively working on forming strategic alliances with top-tier global suppliers. On September 14, the preparatory team for Beijing Automotive Components Co., Ltd. held a meeting and finalized the company’s structure and personnel. They are currently evaluating existing parts companies across the city to select the best assets to join the new entity. It is expected that the company will go public by October. Chen Weimin noted that while Beijing’s parts industry started late, it is now setting a high standard. "We only partner with the top 500 global companies or the leading domestic firms. So far, 12 companies have committed, with another five or six in the pipeline—including Lear, Johnson Controls, Delphi, and Bosch. Some are even considering setting up R&D centers in Beijing." Despite this optimism, challenges remain. Beijing Hyundai, once known for its fast-paced growth, has seen a slowdown in sales. One reason cited is the high cost of parts. Many original equipment suppliers are based in South Korea, and key components are still imported. As a result, local parts manufacturers have struggled to gain a foothold in the supply chain. Experts warn that while the industry is showing signs of recovery, it is still vulnerable. "There is much work to be done before Beijing can truly become a major player in the auto parts sector," one analyst said. Looking ahead, BAIC has prioritized building a parts development platform, combining both industrial growth and financial strategies. This includes introducing strategic investments and creating a unified platform for the city's auto parts industry. As the new company prepares for its launch, representatives from Beijing Hyundai, Beijing Benz-Dike, and Beiqi Foton have been meeting with the preparatory committee to discuss procurement strategies. BAIC has made it clear that under equal conditions, its subsidiaries will receive priority in sourcing parts. Beijing Hyundai also confirmed that its procurement standards are strict. "Quality, cost, and supply capacity must meet our requirements before a supplier can be included in our system," a spokesperson said. Meanwhile, the acquisition of Wei Fu by Bosch highlights the importance of maintaining control over core technologies. BAIC is aware of this and plans to develop its own R&D and manufacturing capabilities alongside joint ventures. Its personnel will participate in product development stages to ensure long-term competitiveness. Overall, while the future of Beijing's auto parts industry looks promising, the road ahead remains challenging. With strategic planning and strong partnerships, the city is taking important steps toward becoming a major hub in the global automotive supply chain.

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