Transmission Enterprise Loss Shutdown: No Wrong, Just Not Needed anymore

Every particle of dust in the transformation of the times falls on an individual's head as a giant mountain. On June 5th, the China Passenger Transport Association announced that it is expected that the sales of new energy passenger vehicles in China will reach 8.5 million units in 2023, with narrow passenger vehicle sales reaching 23.5 million units. The annual penetration rate of new energy vehicles is expected to reach 36%. Under the transformation of the times, buildings are collapsing.

According to relevant media reports, SAIC Volkswagen's three complete vehicle factories in Anting are undergoing production line adjustments. The first factory, which mainly produces small cars such as Volkswagen Polo and Skoda Sharp, ended production in July last year and has permanently closed down. Some production lines have been relocated to Yizheng, Jiangsu; The second factory has initiated a joint shift, merging two production shifts into one shift; The three factories are likely to start working together in the second half of this year. These three factories, each of which is famous in the era of gasoline cars.

Shanghai Automotive Transmission Company, a subsidiary of SAIC Group, is currently laying off employees. As of the end of May, approximately 300 people have signed negotiated resignation agreements or processed retirement procedures.

Famous Aixin announced its performance for the first nine months of the fiscal year ended December 31, 2022. The current operating profit was 27.064 billion yen, a decrease of 80.5% from 139.1 billion yen in the same period last year. The net profit attributable to the owners of the parent company for the current period was 23.613 billion yen, a decrease of 76.4% from 99.878 billion yen in the same period last year. This is already a knee amputation.
These closed factories and companies have a characteristic that there have been no black swan incidents, but they have been overwhelmed by the times.

01

No mistake, just not needed anymore

Many things happening in the automotive industry now are constantly repeating history. Nokia CEO Yoma Ollila announced at a press conference that he agreed to Microsoft's acquisition, saying, 'We didn't do anything wrong, but I don't know why, we lost.'.

The global output value of automotive components in 2021 is approximately $1.5 trillion, while the output value of electric intelligent components is $0.21 trillion, accounting for approximately 14%. According to estimates, the proportion of intelligent components in component output is expected to reach 28% by 2025, and this number will exceed 40% by 2030.

For a long time, many leading domestic brand car companies were proud to have their models equipped with Aisin 6AT and 8AT transmissions, and even promoted transmissions as one of the core selling points of their products. Aixin's gearbox is still the top in the world and has not experienced any significant product quality issues.

In January this year, Electric Equipment announced the transfer of a series of businesses related to the development, production, and sales of fuel pump products related to internal combustion engines to Aisan Industry. In addition, Electric Equipment recently stated that it will continue to spin off and sell other parts related to internal combustion engines.

The well-known ZF has spun off its passive safety business unit and set it up as an independent company by the end of 2023; At present, ZF's business focus has shifted to electric drive, autonomous driving, and software development.
These suppliers who were prominent in the era of gasoline vehicles did nothing wrong, but were no longer needed by the times. In the transformation of this era, either the brave man strangles his wrist or refuses to turn around.

02

The Rise of Another Era

The end of an era represents the rise of another era. A large number of intelligent related component companies have emerged in China. In addition to the well-known Ning Wang, a trillion dollar market capitalization giant. In addition, another large number of suppliers providing intelligent components have emerged.

For example, Desai Xiwei, a leading automotive electronics company, disclosed its annual report that in 2022, the company achieved a revenue of 14.933 billion yuan, a year-on-year increase of 56.05%; The net profit attributable to the parent company was 1.184 billion yuan, a year-on-year increase of 42.13%. The company specifically mentioned in its annual report that the annual sales revenue of new projects in the company's intelligent driving business is close to 8 billion yuan, implying that the company's high growth is already in its hands.

Desai Xiwei's main business is divided into intelligent cockpit business mainly focused on cockpit central control intelligent large screens, and intelligent driving business mainly focused on "autonomous driving brain" domain controllers. The intelligent cockpit business mainly includes comprehensive solutions for cockpit central control screens and in car entertainment systems. When the entertainment system inside the car becomes the standard equipment on board, the Desai Xiwei intelligent cockpit business is almost accompanied by the rapid increase in penetration rate of new energy vehicles.

The market value of the company has also increased sixfold from 2019 to today.

For example, due to the arrival of the era of electrification, cars are generally heavier than before. The addition of batteries and electric motors makes weight reduction a necessity for vehicles. So a large number of suppliers specializing in aluminum body production have emerged with the trend. Aikodi, Huada Technology, and others mainly engaged in the research and development of precision aluminum alloy die castings for automobiles.

There is also a wire controlled chassis, which belongs to the execution system of automatic assisted driving in automobiles. It converts the mechanical signals released by the driver during operation into electrical signals through detectors, and then completes relevant driving decisions through the controller and actuator. Zhongding Co., Ltd. is currently the leading manufacturer of air suspension and wire controlled chassis. There are also several companies that are rising very fast in this track, such as Asia Pacific Shares, Bethel, etc.

More interestingly, the first car brand in the automotive industry to focus on a wire controlled chassis is actually Infiniti. Infiniti has fallen at the gateway to intelligence in the Chinese market.

The market value of these component supplier companies mentioned above has increased by 1-5 times since 2019. The end of one era means that another era is rising.

There is a famous saying in "When the Stars of Humanity Shine" that all great feats in the world are always silently accomplished. No giant has ever collapsed in an instant, and no greatness has ever been achieved overnight. Grass snake grey line, covering thousands of miles, the era has quietly laid the foreshadowing.