Six factors drive the development of automobile mold industry

Mold is the basic process equipment made of metal, non-metal and other materials processed by special equipment. It is the molding tool for mass production of specific parts or parts. It is an indispensable part of manufacturing industry. In the downstream application industry of die, the use of die in automobile manufacturing industry is larger. At present, the auto-related mould demand in our country accounts for about 1/3 of the total mould demand, and is still in the rising stage.

Analysis of driving factors of automobile mold

1. Industrial policy support

In recent years, a series of national industrial policies have established a good policy environment for the development of automobile mold industry. The "13th Five-Year Plan" of the mold industry released by China Mold Industry Association in 2016 proposed that it should focus on the development of middle and high-grade molds needed in the technological development and transformation and upgrading of the manufacturing industry, and the self-allocation rate of domestic molds in the domestic market reached more than 90%. The Intelligent Manufacturing Development Plan (2016-2020) issued by the Ministry of Industry and Information Technology and other ministries proposed that: It will take the development of intelligent manufacturing as a long-term strategic task, and the goal is that by 2020, the development foundation and supporting capacity of intelligent manufacturing will be significantly enhanced, digital manufacturing will be basically realized in key areas of traditional manufacturing, and the intelligent transformation of key industries with conditions and foundations will make significant progress. Relevant industrial policies are to encourage and support the automotive mold and other automotive manufacturing equipment industry.

In January 2019, the National Development and Reform Commission and 10 other ministries and commissions issued the Implementation Plan for Further Optimizing Supply, Promoting Steady Growth of Consumption and Forming a Strong Domestic Market (2019). The plan aims to promote automobile consumption through various measures such as orderly scrapping and renewal of old vehicles, continuous optimization of subsidy structure of new energy vehicles, promotion of renewal of rural vehicles, and further optimization of local government motor vehicle management measures to better meet residents' travel needs.

Source: China Business Industry Research Institute

2. Huge market demand

As a pillar industry of the national economy, the automobile industry plays a role in promoting and driving many sectors of the national economy. In recent years, global automobile production and sales have basically remained stable. According to the statistical data of the World Automobile Organization (OICA), in 2018, the world automobile production and sales reached 95,634,600 and 95,055,900, respectively. Since 2005, the compound growth rate of the world automobile production and sales is 2.81% and 2.86% respectively. Although the growth rate of automobile production and sales has slowed down or even declined in recent years, and the market has gradually changed from "incremental competition" to "inventory competition", the huge population stock and travel demand will still ensure the huge demand of automobile market.

According to statistics from the China Association of Automobile Manufacturers, in 2018, China's automobile production reached 27.81 million units and sales volume reached 28.08 million units, ranking first in the world for ten years in a row. In recent years, China's national economy has maintained a relatively high growth rate, with per capita GDP growing from 20,200 yuan in 2007 to 64,600 yuan in 2018. At the same time, a variety of affordable cars have been increasing. The driving effect of automobile as a wave consumption still exists, and the purchase of cars by families for convenient travel and self-driving tourism will ensure that the production and sales of Chinese automobile market will remain at a high level. The huge market of the automobile industry provides a strong guarantee for the expansion of the scale of the upstream automobile mold industry.

3. The speed of automobile replacement is accelerated

It is an important feature of the development of Chinese automobile industry to launch new models and upgrade the original models. With the improvement of Chinese consumers' requirements for automobile quality and the diversification of overall demand, Chinese passenger car market has entered the stage of diversification and individuation. In order to maintain their competitive advantages and adapt to customer needs, automobile manufacturers constantly accelerate the speed of product upgrading. The development cycle of new models has been shortened from about 4 years to 1-3 years, and the replacement cycle of old cars has been shortened from 6-24 months to 4-15 months. The acceleration of the upgrading speed of automobile models and the continuous upgrading demand after the launch of new cars also expand the development space of the automobile mold industry.

4. Global manufacturing transfer brings opportunities for China's auto mold industry

With the gradual recovery of the global economy, the return of high-end manufacturing in developed countries led by Europe, North America and Japan and the development of manufacturing in developing countries represented by India and Brazil, the demand for molds is gradually increasing. According to customs data, in 2010, the value of Chinese mould exports reached 2.2 billion US dollars, exceeding the import amount for the first time and achieving a trade surplus for the first time. In 2018, the value of Chinese mould exports reached 6.085 billion US dollars. The Chinese mould industry has accumulated rich experience and good reputation in the export process over the years. In the process of the development of mould products to the direction of large-scale, precision, complex and special technology for precision machining technology, computer technology, intelligent control and green manufacturing, our mould industry has a strong technical advantage compared with other developing countries. At the same time, compared with the manufacturers in Europe, America and Japan, we have a certain cost advantage. In recent years, the manufacturing focus of the global mold industry has shown the trend of shifting to China, which provides a good market opportunity for the development of China's auto mold industry.

5. The global purchasing trend of multinational auto parts suppliers promotes the rapid development of domestic auto mold industry

Global well-known Oems are multinational companies, in the main regions of the world to establish production bases, supply the local automobile market. In order to reduce the comprehensive cost of development, design, production and maintenance, multinational automotive Oems are increasingly purchasing plastic moulds globally in accordance with the QSPT principle (quality, service, price and technology). The global purchasing mode promotes the development of the automotive plastic moulds industry.

With the rapid development of China's automotive plastic mould industry, the technical level, quality level and reliability have been significantly improved, coupled with China's labor cost advantage, so that China's automotive plastic mould has a higher cost performance. More and more automobile manufacturers list China as one of the important countries in the global procurement of automotive plastic mould. This provides a good opportunity for the development of Chinese automotive plastic mould industry.

6. The technical level of China's automotive mold industry continues to improve

In recent years, through the introduction, digestion, absorption and independent research and development of advanced technology, domestic automotive plastic mold enterprises have achieved a large degree of improvement in the level of equipment and technology, and narrowed the gap between foreign counterparts.

Some backbone enterprises in China have realized the leap from the design and production of middle and low grade car mold to the design and production of middle and high grade car mold. The gap between the level of middle and high grade domestic mold and that of foreign countries is narrowing. The phenomenon that middle and high grade car mold all rely on imports is gradually changing. The continuous improvement of technology has promoted the upgrading of Chinese automotive plastic mould industry, and promoted the whole industry to develop in a more healthy and orderly direction, which provides technical guarantee for performance quality of products.

(Source: China Business Industry Research Institute)