Some say that the pace of car updates is now rivaling that of smartphones.

In September, automakers launched a flurry of new models. According to incomplete statistics from reporters, nearly 30 new car models hit the market in just the last week of September. During that week alone, Changan Automobile introduced three models: the 2025 Deep Blue SL03, the 2024 AITO 07, and the fourth-generation CS75 PLUS.

The speed at which Chinese car brands are releasing new models is astonishing, and such rapid hardware updates have also placed higher demands on the overall automotive supply chain. In traditional perceptions, the process of designing, developing, testing, and producing a car is quite complex. However, Chinese intelligent connected new energy vehicles are using production method innovations to gradually shorten this lengthy process.

Advertisement

Thus, the speed of car updates and replacements is just the tip of the iceberg; what lies beneath is a restructuring of the industry and value chains.

Automotive parts manufacturers are racing onto new tracks.

On September 26th, in the SERES Super Factory located in the Liangjiang New Area of Chongqing, two-plate die-casting units were casting aluminum automotive parts into shape.

What appears to be a routine production process actually conceals subtleties. "This is a 'factory within a factory' structure," Shi Zengchao, General Manager of the SERES supply chain system, told a reporter from China Economic Weekly. The super die-casting machine's partner is the Wencan Group. When SERES was constructing the super factory, tens of thousands of square meters of factory buildings were built at one time according to the needs of the Wencan Group. "This factory workshop is 'door to door' with our welding workshop, and the overhead chains used for part transportation in both workshops are also connected."

Such a production method is a microcosm of current automotive parts manufacturing enterprises. As China's new energy vehicles rise, many automotive parts companies, like Wencan Group and SERES, are undergoing production method transformations.

In the production workshops of Qingshan Industry Co., Ltd. (hereinafter referred to as "Qingshan Industry"), "multi-in-one" electric drive assemblies are continuously produced and shipped to整车 manufacturers for assembly. These part products integrate motor, electric control, reducer, and other functional modules within a small space, achieving the effects of volume reduction, weight reduction, and power density enhancement of the electric drive assembly.

Although these electric drive assemblies are now used in a large number of domestic new energy vehicles, Qingshan Industry once faced the dilemma of transformation.Qingshan Industry once developed world-class automatic transmissions for fuel vehicles, but now new energy vehicles no longer need traditional transmissions, and it may face the dilemma of "having no place to use its flagship product." Therefore, Qingshan Industry began to produce transmissions while researching and developing products in the field of electric vehicle electric drive, insisting on investing 5% of its revenue in research and development every year. Eventually, it broke through key technologies such as "multi-in-one" electric drive systems, making related electric drive products the main products for Qingshan Industry to compete in the "new track."

In interviews and research, reporters learned that there are countless examples of technological innovation in many automotive parts manufacturing enterprises. For instance, Daming Automobile Electrical Co., Ltd. has continuously carried out five intelligent technological transformations on its production line. Now, the work that used to be done by 100 people on the production line in a day can be completed by 10 people operating an intelligent production line. At Chongqing Pingwei Automobile Technology Co., Ltd., automatic laser hardening has replaced conventional hardening, increasing efficiency by 25% and eliminating five positions with high repetition and high risk.

Neijiang Yutian Machinery Manufacturing Co., Ltd., which takes the main business of automobile crankshafts, has even reached cooperation with some drone manufacturers and received some drone crankshaft production orders, fully entering new fields.

The coordinated development of the automotive industry is accelerating.

It is not difficult to see that a large number of traditional automotive parts enterprises have entered the field of new energy vehicle accessories. Some enterprises have made initial progress in tackling key core technologies, and many enterprises have started to launch competitive and leading new technologies and products in line with technological changes.

The power transmission system is a core component of automobiles. The power transmission system is also one of the main businesses of Qingshan Industry. The person in charge of Qingshan Industry told the reporter of China Economic Weekly that Qingshan Industry's dual-clutch gearbox (DCT) once occupied a large share of the market with its superior performance. With the rapid development of new energy vehicle technology, Qingshan Industry began to transform electrification, and its electrified products have gone from "none to some" to "some to excellent."

In the electrification revolution, Qingshan Industry and Changan Automobile have transformed in coordination. This method is also the main driving method for technological innovation in automotive parts enterprises at present.

It is understood that Qingshan Industry and Changan Automobile have jointly established the Chang'an-Qingshan Joint Research and Development Center. On projects such as REEV, EDS1, and EDS3, the two parties have solved technical problems in the aspects of power performance and driving experience of new energy vehicles through in-depth collaborative research and development, reducing product research and development and production costs. For example, the EDS3 product jointly created by the Chang'an-Qingshan collaborative team has a peak power of up to 213kW.

In addition to joint research and development, the coordinated development of the supply chain system is also very common in whole vehicle enterprises like Changan Automobile. Relevant personnel from Changan Automobile's procurement center told the reporter of China Economic Weekly that in the traditional automotive development process, the whole vehicle enterprise usually comes up with a design plan first, and then purchases according to the plan. If it is found that the supplier's parts do not meet or fail to meet the requirements, design changes must be made. After several rounds, the production cycle will become longer, and there will be trial and error and communication costs.

Now, Changan Automobile will consider the entire industrial chain from raw materials to assembly parts, analyze the key technologies, production processes, and costs of each link, identify core technologies and key value points, and carry out supplier system restructuring based on the principles of soft and hard decoupling, development and manufacturing decoupling. It integrates and bulk purchases key important materials, general materials, and bulk raw materials, further realizing stratified management of purchasing categories and promoting direct cooperation with "front-end" suppliers.Today, in Chang'an's global R&D center, one can often see R&D personnel dressed in various colored work clothes, some from Huawei, CATL, others from Qingshan Industry, Zhixin Industry...

The value chain is being restructured, and the future will be a competition of ecosystems.

The collaborative development of automotive parts companies and vehicle manufacturers is a response to the changes of the times. With the accelerated transformation of the automotive industry chain, the value chain is also being restructured.

Zhang Xiaomin, Vice President of Continental Automotive Subgroup China and General Manager of Safety and Dynamic Control Business Group China, believes that in such an era of transformation brought about by new technologies, technology has become more complex. Cars are no longer purely mechanical products but have become systems of software and electronics.

"The value chain has been reshaped, and uncertainty has increased. This is a new change faced by those of us in this industry, and no one can determine the future direction of intelligent connectivity. In such an environment, challenges are inevitable. As a parts factory, in the process of value restructuring, it should have deeper connections with the main plant and ecological partners." Zhang Xiaomin said in the discussion at the Intelligent Connected New Energy Vehicle Parts Industry Ecological Conference.

Zhou Song, President of Valeo China, also believes that due to the emergence of this round of intelligent connectivity and new energy vehicle enthusiasm, the attributes of cars have changed, and thus the value restructuring of the entire supply chain has occurred, which has led to a series of supply chain issues. The automotive industry is abandoning the relatively stable supply chain and value chain of the past few decades.

"Some people say that pure B2B is no longer suitable and needs to separate software and hardware. But I think this is a change in the business model, which requires more openness, more collaboration, and more cooperation." Zhou Song said.

Advanced intelligent connected vehicles are considered to be a cross-disciplinary fusion of technology fields. Academician Li Keqiang of the Chinese Academy of Engineering said at the 2024 Intelligent Connected New Energy Vehicle Parts Industry Ecological Conference that the development of intelligent connectivity has changed traditional automotive parts from the perspective of parts.

He mentioned that the new type of part development model and industrial ecology that combines the two has undergone significant changes. From the current point of view, parts, including sensors, perception, chips, computing platforms, etc., have made significant progress in industrialization. Now, the competition in the automotive industry is no longer between one vehicle company and another; it is becoming a competition between entire ecosystems.