Internal Combustion Engine Association: The policy of maintaining growth has been adjusted for transformation and upgrading

For the analysis of current market dynamics and the composition of the product structure, automotive engine and internal combustion engine related industries have their own professional analysis.

“The rate of economic growth in the first seven months fell month by month, but it is still in a relatively rapid growth range. It is worth noting that the growth rate of profits has fallen faster than that of production and sales, mainly due to excessive capacity expansion and vicious competition. We must be alert to this. A trend is spreading. Current industry trends show that transformation and upgrading have become more and more urgent.” This is Xing Min, executive vice chairman and secretary general of China Internal Combustion Engine Industry Association, who judges the current situation.

At the internal combustion engine industry summit held in Beijing on October 7, 2011, Xing Min's judgment was echoed by Dong Yang, executive vice chairman and secretary-general of China Association of Automobile Manufacturers, the largest user of internal combustion engine products. He thought that The current growth rate of automobile production and sales is a normal category, and there is no need to be pessimistic about the growth rate of auto production and sales that is lower than 10% temporarily.

In fact, although the growth rate of auto production and sales was lower than double-digit growth in the first eight months of 2011, a set of data provided by Pan Jiancheng, director of the China Economic Prosperity Monitoring Center, indicated that the growth rate of the auto industry based on sales still reached 10% level. It can be seen that although the industry has not fully developed in the direction of small-scale energy conservation, the overall product mix of the auto industry has been quietly undergoing adjustments. Some automotive products with low grades, poor safety levels, and low comfort levels have been correspondingly affected. The withdrawal of encouraging policies is also followed by fading, and this trend will also be reflected in the field of automotive engines.

From the macroeconomic point of view, the information provided by Deputy Secretary Huang Libin from the Ministry of Industry and Information Technology's Operational Monitoring and Coordination Bureau shows that since 2011, China’s economic growth is undergoing an orderly shift from policy stimulus to autonomous growth, and the industrial economy has generally operated at a stable and rapid growth interval. This shows a good pattern of rapid production growth, simultaneous improvement of benefits, and steady progress in industrial restructuring.

Judging from the specific operating conditions of the internal combustion engine manufacturing industry, the growth rate of total industrial output value of 23.3% from January to July was lower than the average growth rate of 26.4% of the machinery industry during the same period. Xing Min said that the obvious deceleration of the auto industry and the apparent decline in the growth rate of the construction machinery industry have formed the current slowdown in the growth rate of the internal combustion engine industry.

After analyzing the unfavorable factors in the internal combustion engine industry brought about by the influence of related user industries, Xing Min believes that the exchange rate is bullish, the cost of financing is rising, the price of the cost of production data elements is rising, the labor cost is generally rising, and the Japanese earthquake tsunami The blows brought about by a series of major international events such as the political turmoil in the Middle East and North Africa, the destabilization of US debt, and the European debt crisis have directly affected the progress of the global economic recovery, and have also led to energy products such as oil for automobiles, internal combustion engines, and transportation industries. The large fluctuations in commodity prices and commodity prices have created greater uncertainties in related domestic industries.

Under the current pattern of multiple unfavorable factors, Xing Min made several suggestions on how to ensure the stable and active operation of the internal combustion engine industry. He believes that the first need to "policy" and "cooling demand" double pressure, the industry must also accelerate the transformation and upgrading. Xing Min stated that the policy orientation of “guarantee growth” after the financial crisis since the second half of 2010 has been adjusted to the policy orientation led by “transition and upgrading”. The economic demand that has been stimulated by expansionary policies has tightened in the macroeconomic situation. In the environment, it has already cooled significantly. In this context, internal combustion engine companies must shift their focus to focusing more on independent innovation and structural upgrading.

Secondly, the dual pressures of energy saving and emission reduction should highlight the main attack direction of “high-end and low-grade” in structural adjustment and upgrading. Xing Min believes that one must focus on high-tech products, such as the development of energy-saving and emission reduction products; the second is the pursuit of high-quality products, such as upgrading the quality of traditional products; the third is to focus on the heightening of the industrial structure, That is, it attaches great importance to the development of the modern manufacturing service industry.

Second, in the transformation of development methods, we insist on the basic approach of "innovation-driven, two-incorporated fusion, green manufacturing, and circular economy" as the first.

Xing Min explained that "innovation-driven" is to shift from over-reliance on factor input to rely more on independent innovation, improve staff quality and management level to promote the development of the industry. Innovation technology is not only a technological innovation, but also a commitment to mechanism innovation. "Two integrations" is to integrate information technology and traditional technology at the three levels of "product, management, and philosophy", and work hard at depth. "Green manufacturing, circular economy" is to do a good job of energy saving and material saving in both internal combustion engine products and the industry's own production process.

Finally, Xing Min also mentioned that it is necessary to increase the pace of going global and accelerate the cultivation of soft power to strengthen its own literacy, expand exports, and ease the lack of domestic orders, especially for the expansion of production capacity of automobiles, agricultural machinery, construction machinery, etc. Excessive growth in domestic demand and the oversupply of demanding industries should also increase efforts to expand the international market.

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