The development trend of car filters

The filter industry is in short supply, and its production capacity is far from keeping up with the growth rate of demand. As for foreign brands, the prosperity of the global market has led to a sales increase of approximately 40% for manufacturing enterprises such as Terex Demag, Liebherr, and Manitowoc. However, since the filter bodies are all produced according to orders, and the components that go with the main units are also shipped according to orders, coupled with the influence of the manufacturers' own production capacity, the extension of the supply cycle is inevitable. The insufficiency of production capacity and the shortage of key components trouble manufacturers and users. So, under the premise of a very favorable overall environment, how is the Chinese filter industry doing?
It has been the tenth year since China joined the WTO in 2001. China's automotive industry has achieved rapid development in the past ten years. The automotive filter industry, which is closely related to the development of the entire vehicle, is also thriving. China exported a total of 58.775 million automotive filters, an increase of 13.57% compared with 2010, involving an amount of 127 million US dollars, an increase of 41.26% compared with 2010.

With fierce market competition, enterprises have shifted their focus to the supporting market

Since China's accession to the World Trade Organization, the country's automotive industry has developed rapidly, driving the rapid development of the filter industry. It is estimated that the total demand for automotive filters in China will increase to 1.16 billion sets in 2020. With the gradual expansion of the number and scale of manufacturing enterprises, the technical level of filters is also constantly improving. Filters that meet the latest emission standards have been successfully developed and put into mass production. The huge filter market has attracted the attention of many manufacturing enterprises, and domestic and foreign enterprises have joined the increasingly competitive market one after another. Especially, the competition in the after-sales market has become even more intense.
According to the analysis of Qianzhan Industry Network, the main reasons are as follows: First, filters are consumable parts that need to be replaced regularly, so their sales volume in the after-sales market is very large. Secondly, there are numerous manufacturers in China's automotive filter industry, and their scales are generally small. The concentration of brands is very low, and the competition in the after-sales market of filters is particularly fierce.
There are many reasons for the phenomenon of insufficient supply of filters. From a macro perspective, the continuous growth of fixed asset investment has driven the rapid development of the construction machinery industry, and the expansion of domestic demand has provided the most direct impetus for the market development of large-scale engineering filters. Although the state has repeatedly intensified its macro-control efforts, in the face of the huge base of market demand, the demand volume will undoubtedly be an astonishing figure. In addition, with the continuous expansion of the international market, the export volume of products has multiplied in the past two years. The export value of China's engineering hoists has accounted for 25% of the total sales.
The production capacity of filters is far from keeping up with the growth rate of demand. The president of a well-known foreign filter manufacturer said when talking about the situation of most filter manufacturers: "Customers are queuing up for delivery, while we are struggling with those limited components." We are working hard to solve the bottleneck problems of each manufacturer one by one, so as to make full use of the existing site to produce more products. This phenomenon of supply falling short of demand caused by excessively long supply cycles will continue to plague the market of large-scale engineering filters worldwide, especially in the Chinese market where demand is so strong.
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 and the rapid increase in the number of cars in use, a broad market space has been provided for automotive filters in China.

I.The demand for automotive filters is on the rise

II. 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. There are currently over 1,000 filter manufacturing enterprises in China. Due to the diversity of product varieties and structures of automotive filters, they are suitable for both large-scale production with a high degree of automation and small-batch workshop-style production mainly based on manual operations. Therefore, most of these enterprises are relatively small in scale, with more than 30 large and medium-sized enterprises. As a result, no monopolistic super-large enterprise has yet formed in the industry.
The fierce competition in the filter market mainly occurs 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%.

III. 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 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.