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Spare Parts Sector Ready for High-quality Development

From:Date:2021/05/18 09:06:18

In 2020, faced with the challenge of major economic indicators declining due to the pandemic and subsequent repercussions, the sewing machinery spare parts sector in China still managed to secure a steady development through restoring its faith and conducting a series of countermeasures. In particular, key spare parts enterprises have taken good advantage of the lull in market activities to tap into their potentials, and they've shown great development resiliency by means of optimizing their structures and reinforcing growth capacity when the whole industry goes through difficult times.

I. The Whole Situation in 2020

i. industrial layout

The sewing machinery industry in China has put in place a spare parts manufacture network and supporting system, which covers processes like casting, pressing, rough and fine machining, thermal treatment, and products like needle, hook, rack and table, shaft. Currently, more than 1,000 enterprises have been active in the spare parts sector with 40,000 to 60,000 practitioners (see chart 1 below). Nearly 200 of such enterprises, with a certain size and influence, are capable of creating an annual output value of 10 million CNY at least, and these above statistics are by no means exhaustive.

Region

Enterprises qty.

Particular area

Zhejiang

600-odd

Ningbo, Taizhou, Wenzhou, Dongyang, Hangzhou, Zhuji, Jinyun, etc.

Jiangsu

200-odd

Wujiang, Changshu, Yangzhou, Nantong, Haimen, Changzhou, Jingjiang, Zhangjiagang, Wuxi, etc.

Tianjin and Hebei

150-odd

Heibei Changli, Qingxian, vicinity of Tianjin, etc.

Canton

150-odd

Guangzhou, Dongguan, Zhongshan, Shenzhen, Zhuhai, etc.

Other

50-odd

Shanghai, Shandong, Chongqing, Hu'nan Anxiang, etc.

Chart 1 regional distribution of sewing machinery spare parts

ii. production

According to preliminary estimate, the spare parts sector (not including the electro-controlled one) has yielded a gross industrial output value of 12 billion CNY approximately, falling 17% year on year. The production and sales of over-lock and inter-lock sewing machines and related spare parts are basically kept at the same level with that in previous year thanks to the increasing demand for pandemic control supplies like protective gown.

iii. import/export

a. import

In 2020, the export of spare parts grows steadily. Customs data show that China has accumulatively exported sewing machinery spare parts of 69.57 million Kg, decreasing 1.29% compared with the previous year; earned an export value of 0.39 billion USD, increasing 5.83% on year-on-year basis (see graph 1 below).


Graph 1 export value of sewing machinery spare parts from 2010 to 2020

b. export

In 2020, the import of spare parts keeps falling. Customs statistics show that China has accumulatively imported sewing machinery spare parts of 1.53 million Kg, falling 18.73% compared with the previous year; delivered an import value of 63.01 million USD, declining 16.96% on year-on-year basis (see graph 2 below).

Graph 2 import value of sewing machinery spare parts from 2010 to 2020

iv. economic efficiency

CSMA has carried out a research with regard to 55 major enterprises in spare parts sector, and the results show that they've gained a gross profit of about 0.29 billion CNY, with an average profit rate of 9.5%.

II. Sector Growth Features in 2020

As the growth of the whole sewing machinery industry was adversely influenced by the pandemic in 2020, the economic indicators pertaining to production and operation of the spare parts sector has shown a V shape trend. The enterprises in such sector, especially those with above-designated scale, have taken corresponding actions in a timely manner, and endeavored to develop their full potentials while the market is stagnant.

i. explore new path to improve manufacture quality driven by key players

In order to break the development bottleneck of traditional manufacture mode of spare parts sector, Ningbo De'ying has been investing heavily into the upgrade and renovation of its software and hardware in recent years, and has noticeably reduced its reliance on manpower, especially skilled labor; by doing so, it has facilitated the transition from conventional manufacture mode to an intelligent one, and explored a feasible new path for the sector to improve manufacture model and quality.

ii. improve concentration and further the cooperation between sewing machine sector and spare parts sector

The competition of the spare parts sector has developed into a new stage where the strong becomes stronger while the weak weaker, and such trend is irreversible. Moreover, driven by leading local enterprises of sewing machine, spare parts enterprises in Taizhou has been vigorously expanding their production lines, and raising the quality on the whole continuously. On the contrast, some other industrial clusters incur further decline. In the meanwhile, as the strategic cooperation between sewing machine sector and spare parts sector is deepened, the former will pay more and more attention to the collaborated growth together with the supply side; and the credit system begins to come into play, the two-way selection between these two sectors has been sped up, and as a result, the spare parts enterprises have seized more and more initiatives during cooperation.

iii. the bottleneck of industrial development becomes more and more noticeable

At the new development stage, the hindrance to spare parts sector on its way ahead becomes apparent day by day: the root cause is the labor issue, the manufacture maturity has to be improved significantly, the discrepancy between low profit rate and continuous input surfaces over time. All these matters have put into test the enterprises' achievement.

III. Prospect of 2021 and Advices

Opportunities coexist with challenges. In 2021, it's sensible for the spare parts enterprises to follow the sectoral growth regularity from a long-term perspective, and make an effort in aspects as below:

i. affirm the faith and improve manufacturing substantially

The sewing machinery industry in China will embrace a new chance for growth at the new starting point after it has joined company with manufacture powers. The spare parts enterprises shall restore their faith in the first place, stick to their key businesses, analyze and evaluate the future development path, figure out their positions and strategic plans, then carried out the same step by step and with clear orientation. They are expected to unleash their full potentials revolving around the core requirement of improving total factor productivity, strengthen their competitiveness through continuous input aiming at being single-indicator champion, promote intelligent manufacture and production quality through applying advanced manufacture equipment and technology. In the meantime, leading enterprises shall align themselves with the power strategy, and shoulder more responsibilities in standardization and related areas.

ii. build a modern supply chain and reinforce the cooperation between sewing machine sector and spare parts sector

Modern supply chain can provide support to the high-quality development of the sewing machinery industry; with regard to the close coordination in such area, the sewing machine sector and spare parts sector shall strengthen the industrial interlocking, and enhance the cooperation stickiness as per the requirements put forward in the new phase of power strategy. The spare parts enterprises shall stimulate the establishment and application of digital and IT tech, fulfill the dynamic interaction between the supply side and the demand side with priority on actual effect, and carve out a new development path in which the whole ecosystem of design, research and development, after-sale service grows in an uniform and synchronized fashion.