The smiling curve of the bearing industry
Thousands of years of bearing history, talking and laughing are also lively. The two sessions held in March advocated the high-quality development of Chinese enterprises, so let's talk about how the NSK bearing industry can break through the bottleneck of high-quality development.
In 1992, Shi Zhenrong, chairman of Taiwan Acer, proposed the famous "smile curve". The horizontal axis of this curve is divided into three sections from left to right: the left section is technology and patents; the middle section is assembly and manufacturing; the right section is brand, For services, the vertical axis refers to added value and also represents profit margins. As for the traditional manufacturing service industry, it can be seen from the "smiling curve" that the two ends bring higher added value to the enterprise, while the production and manufacturing in the middle segment is the link with the lowest added value.
If we regard the bearing industry as a branch of the traditional manufacturing service industry, the "smile curve" 20 years ago was relatively flat. Many of our private bearing companies were established and developed during that time. On the one hand, It is the high added value of manufacturing; on the other hand, due to insufficient competition among domestic enterprises, product prices can easily be maintained at a high level. For corporate profits, it is really a wonderful and unreproducible time. Let me give you a personal experience. In 2007, I returned to China and joined the domestic automotive bearing industry. The original wheel bearings in North America were already fully commodity, and the suppliers’ bargaining power was very low. In the domestic automotive market at that time, wheel bearings were worthy For commodities, suppliers can easily obtain attractive bargaining power. On the other hand, more than ten years later, the market price of wheel bearings may be less than half of the original price. At the same time, many wheel bearing manufacturers and latecomers are trying to carve up the market. I once made a very rough statistics. As far as a certain industrial manufacturing area in Triangle is concerned, there are more than 40 large and small wheel hub bearing enterprises.
Regardless of the international or domestic market, the automobile market will fluctuate up and down under the influence of the economic cycle. However, the rapid development of the automobile market in the past two decades, especially the rapid development of the Chinese automobile market, will not appear in the next few years. There will be a situation where there will be too much porridge. The "smiling curve" of today's bearing industry will inevitably be more uplifted, and the added value of manufacturing will continue to sink. This industry trend will intensify and accelerate.
Today, due to time constraints, we briefly talked about the "smile curve" of the manufacturing service industry and the change trend of the "smile curve" of our bearing industry. We all know that the market trend is difficult to change. Then next week's "Teng Yun Jiawu" Let's talk about how to take advantage of the trend: For entrepreneurs in our industry, how to consider the strategic layout to win the competition; and for bearing practitioners, how to predict and develop together with successful companies in the future.