Automotive Parts Usher in “Made in Guangzhou”

　　The automotive industry is Guangzhou’s largest pillar industry. To further extend the automotive industrial chain, the Municipal Government Executive Meeting held on the 17th reviewed and approved the “Implementation Plan for the Construction of the Guangzhou International Automotive Parts Industry Base” (hereinafter referred to as the “Plan”). The Plan proposes building the Guangzhou International Automotive Parts Industry Base under a “1-5-3” strategy—namely, one base, five industrial parks, and three key areas—and aims to achieve an additional output value of RMB 200 billion for the automotive parts industry base by 2020, while raising the localization rate of key components to 80%.

　　 Objective: Achieve an 80% localization rate for critical components by 2020.

　　Guangzhou is one of the nation’s three major passenger-vehicle production bases, and the automotive industry is its leading pillar sector. In 2015, the city’s automotive manufacturing sector recorded an output value of RMB 377.679 billion, of which the auto-parts manufacturing segment—excluding automobile-engine manufacturing (as engines are counted under complete-vehicle production)—generated RMB 99.446 billion, accounting for 26.3% of the city’s total automotive-manufacturing output. Currently, the auto-parts industry has developed into three major clusters in the eastern, northern, and southern parts of the city.

　　According to a responsible official from the Municipal Commission of Industry and Information Technology, driven by the complete-vehicle sector, Guangzhou’s automotive parts industry has achieved substantial growth. Over the next decade, domestically branded vehicles, new-energy vehicles, and intelligent connected vehicles will be key priorities for the transformation and upgrading of Guangzhou’s automotive industry, leaving considerable room for further development in the parts and components sector.

　　To this end, the Plan proposes strategically developing key components for new-energy vehicles and intelligent connected vehicles to secure global supply chain integration, thereby driving overall upgrades across the upstream and downstream value chains—including supporting equipment, testing, and inspection—and fostering the agglomeration, intensification, and integration of the automotive parts industry.

　　By 2020, the goal is to add RMB 200 billion in output value to the automotive components industry base and achieve an 80% localization rate for key components. Automotive components exports are targeted to reach US$5 billion. Four automotive components enterprises are expected to have annual operating revenues exceeding RMB 10 billion, and 50 enterprises are expected to exceed RMB 1 billion. The aim is to establish an industrial system that covers key components for internal-combustion-engine vehicles, new-energy vehicles, and intelligent connected vehicles, with a relatively complete industrial chain.

　　 Layout: Establish five major industrial parks in Panyu, Zengcheng, Huadu, Nansha, and Conghua.

　　In terms of spatial planning, the Plan proposes to establish the Guangzhou International Automotive Parts Industry Base under a “153” strategy—namely, one base, five industrial parks, and three priority areas—aiming to develop the base into an international hub for the manufacturing and export of high-end automotive parts, a national-level cluster for new-energy vehicle components, and a national-level cluster for intelligent and connected vehicle components. Adhering to the principle of differentiated development, new industrial parks will be sited in Panyu, Zengcheng, Huadu, Nansha, and Conghua, building on the existing industrial foundation. Focusing on traditional vehicle manufacturers, the plan calls for developing high-end supporting components such as powertrains, transmissions, electronic control systems, and lightweight parts. At the same time, forward-looking arrangements will be made for components related to new-energy vehicles and intelligent, connected vehicles, with priority given to power batteries, drive motors, electric-control systems, in-vehicle optical systems, in-vehicle radar systems, high-precision positioning systems, and in-vehicle connectivity terminals. With the goal of integrating manufacturing and services, the plan envisions the construction of public facilities—including R&D centers, inspection and testing laboratories, incubators, financial service providers, trade and logistics hubs, and residential amenities—to enhance the overall functionality of the base. In addition to developing the aforementioned five major parks, the plan also calls for the gradual expansion of the base’s reach into the surrounding areas of Zhaoqing City and Meizhou City, with designated sites for the Zhaoqing (Gaoyao) Automotive Parts Industrial Park and the Guangzhou (Meizhou) Industrial Relocation Industrial Park. These initiatives will focus on developing traditional automotive components and accommodating the relocation of component-supply projects from complete-vehicle manufacturers in the Pearl River Delta.

　　The municipal finance has provided RMB 500 million in support to each of the five industrial parks, for a total of RMB 2.5 billion, to be used for land acquisition and storage as well as infrastructure development.

　　 Development: Conduct research and testing on intelligent vehicles.

　　The Plan is geared toward the future of the automotive industry and proposes the establishment of a national test and demonstration base for intelligent connected vehicles. It aims to build an industrial development platform that integrates common technology R&D, product testing, communication protocol and standard-setting, enterprise incubation and innovation, and demonstration operations, while undertaking research and development of testing standards for intelligent vehicle technologies and related products, as well as third-party testing and evaluation. The Plan also seeks to actively promote the gradual transition of intelligent vehicle testing and demonstration from closed and semi-closed test-track environments to open-traffic settings. Furthermore, it calls for conducting research on the operational environment of intelligent connected vehicles, carrying out application demonstrations, and launching targeted research and demonstration projects in areas such as large logistics enterprises, urban intelligent public transportation systems, smart public mobility systems, and urban car-sharing services. These efforts will lay the foundation for the phased commercial deployment of vehicles equipped with advanced driver-assistance systems, partial automation, and full automation, as well as for the study and formulation of relevant laws and regulations.

　　In addition, by formulating the “Guangzhou Catalogue of Priority Areas for Automotive Parts Development” and establishing a database of target investment-attracting enterprises—updated annually—the city is focusing on attracting high-end components, critical components for new-energy vehicles and key enabling technologies, as well as critical components for intelligent connected vehicles. Leveraging platforms such as the China Guangzhou International Investment Annual Conference, the World Economic Forum in Davos, the Guangzhou International Auto Parts and Aftermarket Exhibition, and the Shanghai International Auto Parts Exhibition, the city has successfully drawn a number of central state-owned enterprises and industry-leading firms in the automotive parts sector to invest in Guangzhou and drive innovation and development.

　　 Support: Establishing a RMB 10-billion Guangzhou Automotive Industry Innovation and Development Fund

　　The Plan also includes a wide range of support policies for the automotive industry. A Guangzhou Automotive Industry Innovation and Development Fund with an initial capital of over RMB 10 billion will be established, with a focus on supporting the development of domestically branded vehicles, new-energy vehicles, and intelligent connected vehicles. Not less than 20% of the fund’s investments will be directed toward Guangzhou-based auto-parts enterprises. Furthermore, the Guangzhou International Auto-Parts Industry Base will be given priority for inclusion in the provincial and municipal key project lists, receiving expedited approval and streamlined procedures for project initiation, planning, and land-use applications.

　　For newly introduced automotive parts manufacturing projects, a reward will be granted equal to 5% of the enterprise’s paid-up registered capital, with a maximum reward of RMB 50 million per enterprise. In addition, local leading automotive parts enterprise groups that acquire and merge with international key automotive components companies and relocate their registration to our city will receive a one-time additional reward of RMB 3 million.

　　We will encourage the R&D and breakthroughs in core technologies. For entities that establish R&D and manufacturing centers for critical automotive components, a reward will be granted equal to 10% of their paid-up registered capital, with a maximum reward of RMB 20 million per center. For newly established automotive component enterprises spun off from existing organizations, a reward will be granted equal to 10% of their paid-up registered capital, with a maximum reward of RMB 20 million per enterprise.

　　Support the development of public service platforms. For newly established or relocated public technical service platforms within the Guangzhou International Automotive Parts Industry Base—such as large-scale, innovation-driven inspection and testing centers, industry standards development centers, technology innovation incubation centers, automotive industry talent training institutions, used-car trading platforms, automotive parts trading or e-commerce platforms, and national demonstration bases for intelligent connected vehicle testing and demonstration operations—the reward shall be up to 30% of the actual paid-up registered capital, with a maximum reward of RMB 50 million per institution.