The filter industry for complete vehicles in China has entered the era of supporting, and the demand is on the rise

The filter protects the engine by filtering the air, engine oil and fuel entering it, and also improves the engine's working efficiency. It is an indispensable part of a car engine. Given the direct matching relationship between automotive filters and the entire vehicle (or engine), with the rapid development of China's automotive industry in recent years and the rapid increase in the number of cars in use, a broad market space has been provided for automotive filters in China.

The demand for automotive filters is on the rise

The latest statistics from the China Association of Automobile Manufacturers show that in the first 11 months of 2010, the cumulative sales of automobiles reached 16.3954 million units, up 34.05% year-on-year. It is expected that the production and sales of automobiles for the whole year will reach 18 million units respectively, up 32% year-on-year. In recent years, China's automotive industry has developed rapidly, driving up the market demand for auto parts. The filter industry is a case in point. It is estimated that the total demand for automotive filters in China will increase to 1.16 billion sets in 2020.

Second, the competition in the automotive filter market is fierce

The huge filter market has attracted the attention of many manufacturing enterprises. The entry of domestic and foreign enterprises one after another has made the competition in the current filter industry increasingly fierce. At present, there are over 1,000 filter manufacturing enterprises in China. Due to the diversity of vehicle filter products in terms of variety and structure, they are suitable for both large-scale production with a high degree of automation and small-batch workshop production mainly based on manual operation. Therefore, most of the manufacturing enterprises are relatively small in scale, with more than 30 large and medium-sized enterprises. No monopolistic super-large enterprise has yet formed in the industry.
The fierce competition in the filter market is mainly manifested in the aftermarket. The main reasons are as follows: First, filters are consumable parts on cars and need to be replaced regularly, so their sales volume in the aftermarket is very large. This directly leads to the number of filter enterprises competing in the aftermarket being far greater than that in the supporting market. Secondly, there are numerous manufacturers in China's automotive filter industry, and their scales are generally small. Most of them are small-scale manual workshop-style automotive filter enterprises with incomplete production conditions, backward testing methods, and small scales. These enterprises basically fail to meet the supporting requirements and thus can only compete in the after-sales market. The fierce competition among enterprises has led to a very low concentration of brands in the after-sales market of filters. The market share of the top 5 filter enterprises is only 15%. In the supporting market, the market share of the top 5 filter enterprises has reached 40%.

In the era of meager profits, filter enterprises have shifted their focus to the supporting market

Although the demand for the after-sales market of filters is huge, with more and more enterprises entering this market, in fact, the after-sales market of filters has entered an era of thin profits, and the profit margin is still shrinking. Coupled with the appreciation of the RMB and the increase in raw material prices, all these factors have made the already struggling enterprises even more difficult. How should filter enterprises break through?
Industry insiders say that for filter enterprises to break through the competition, they must enter the supporting market. Due to the high requirements of the supporting market, not many enterprises have entered it, so the competition situation is relatively good and the profit margin is also relatively high. However, foreign and joint venture brands have seized the market and almost monopolized the filter supply market for high-end models. Therefore, it is particularly important to enhance the technological strength of domestic brands.
Fortunately, some domestic filter manufacturers of a certain scale have already realized this and are striving to enter the supporting market. Although enterprises entering the supporting market will still face various difficulties, this has become a trend.