The "Three Dependencies" of Domestic Components

First of all, excessive attachment to the OEM. Take FAW and Dongfeng as an example, from the beginning of the establishment, it will have a complete part factory directly under its ownership. When the company shifts its energy and financial resources to the entire vehicle, it is already an aging, technically backward, and capital-starved component factory that looks old compared to its emerging counterparts in society. Although inspired by Ford and GM's reorganized components, FAW and Dongfeng had their own self-exploited Foooo and parts companies, but the real “weaning” was easier said than done.

Second, excessive attachment to the main model. Taking Shanghai Santana, FAW Jetta and Dongfeng Fukang as examples, the localization policy restricts a group of domestic supporting enterprises to target a single vehicle model, locates specific components, and the lack of versatility in the selection of equipment has negated the opportunity for supporting other models.

Again, excessive adherence to local administration. Taking Hubei, Changchun, Shanghai and Guangzhou as examples, local governments fully supported local support, exerted pressure on the host plants, matched local sites, protected local industries, and supported a group of manufacturers that lacked basic systems to form scattered and small-scale production facilities. The pattern has brought hidden problems to the future development.

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