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Beiqi Holding Steadily Implements Parts Industry Development Strategy
On August 26, Beijing Automotive Industry Holding Co., Ltd. (BAIC) and Beijing State-owned Assets Management Co., Ltd. signed a "Framework Agreement for Co-sponsoring the Establishment of Beijing Auto Parts Co., Ltd." In addition, agreements were also signed between Beiqi Holding Company and Xuchang Far East Driveshaft Co., Ltd., as well as between Beiqi Holding and Shanghai Delphi Automotive Air Conditioning Systems Co., Ltd. These agreements mark a significant step in the development of Beijing’s automotive parts industry.
This signing was the third major event in a year focused on strengthening the auto parts sector in Beijing. The previous two took place on August 18 last year, when BAIC and Delphi signed a joint venture agreement for belts, and on June 11 this year, when BAIC and Johnson Controls announced a memorandum of understanding for a joint venture in automotive electronics. These earlier agreements laid the foundation for expanding Beijing’s component industry, while the latest one signals the formation of a structured system aimed at accelerating growth.
Building a strong components industry is crucial for Beijing Automobile. Despite its long history, Beijing Auto has struggled to keep up with industry giants like SAIC, FAW, and Dongfeng. With the rise of new car companies, the pressure has intensified. While BAIC relies on partnerships with Hyundai and Daimler to produce models like Beijing Hyundai and Beijing Benz, its supporting parts industry remains underdeveloped. This lack of a robust supply chain has become a major obstacle.
Historically, Beijing's auto parts industry had a solid foundation, with specialized production in engines, gearboxes, and other components. However, over time, the industry became fragmented due to decentralized planning and limited resources. As a result, parts companies have not been able to develop in sync with整车 (whole vehicle) manufacturers, leading to inefficiencies and a lack of cooperation. Today, Beijing’s auto parts sector lags behind national leaders, with no local company among the top ten in the country by revenue.
Recent performance highlights these challenges. Beijing Hyundai and Beijing Benz face issues with cost, quality, and brand perception. Sales figures show declining rankings, and both brands are now seeking to increase local procurement to reduce costs and improve competitiveness. Without a strong internal parts industry, Beijing Auto risks losing profit margins and weakening its market position.
To address these issues, BAIC is taking a dual approach—focusing on both industrial development and capital operations. A key move was the establishment of Beijing Auto Parts Co., Ltd., with BAIC contributing 60% of the equity and Beijing State-owned Assets Management providing 40%. This joint-stock company will serve as a unified platform for the entire Beijing auto parts industry.
BAIC is also partnering with global and domestic suppliers, such as Johnson Controls, Delphi, and Visteon, to strengthen its capabilities. New ventures, including a driveshaft company with Xuchang Far East and an air conditioning project with Shanghai Delphi, aim to expand Beijing’s component base.
Additionally, BAIC is developing industrial bases in Daxing and Shunyi, covering thousands of square meters, to support long-term growth. To guide future development, BAIC has engaged Xinhuaxin Market Research to create a comprehensive strategic plan for the industry.
Overall, these efforts reflect a clear commitment to building a sustainable, competitive, and integrated auto parts industry in Beijing.