Under the wave of "new four modernizations" (electrification, intelligence, networking, and sharing) in Chinese automobiles, the transformation of the parts industry chain is intense. In the first three quarters of 2024, the average net profit margin of 247 domestic automotive parts companies (A-share) decreased by 2% year-on-year. The performance of new energy component companies is relatively optimistic, but traditional component companies (such as lightweight components, electronics, engines, etc.) have experienced a serious decline in profits. Vehicle manufacturers continue to lower prices, further squeezing suppliers' profit margins.

The penetration rate of new energy vehicles is rapidly increasing, which requires higher technological capabilities from component companies. Some traditional component companies have insufficient accumulation in the fields of electrification and intelligence, making it difficult to meet the needs of OEMs. Chinese automotive parts companies urgently need to break through and reform.