New energy car seat industry into a period of rapid development

According to data from the China Automobile Association, the production and sales of new energy vehicles reached 284,000 and 271,000 respectively in July 2021, up 1.7 times and 1.6 times year-on-year respectively. From January to July of 2021, the production and sales of new energy vehicles reached 1.504 million and 1.478 million respectively, with a year-on-year growth of two times.

Chen Believes that with the rapid development of the new energy vehicle industry, the seat market space will be gradually released. For the new energy vehicle industry, domestic spare parts enterprises and international giants have stood on the same starting line. "Taking car seats as an example, foreign brands have been deeply engaged in the traditional passenger car seat market for many years, and the traditional competition pattern of the automotive supply chain is difficult to shake. But the new energy car seat market is different, many new energy car manufacturers are still in the construction of supply chain stage. Tiancheng Controls and other domestic car seat brands can gain more customers through their advantages in technology, quality control and service."

As the first domestic car seat supplier to enter Volkswagen's supplier system, Tiancheng Controls has already supplied car seats to saic and Wema, among other new-energy models, Chen said. Since April this year, customer demand and production and sales have increased significantly. Currently in operation of the four passenger car seat production bases, Ningde and Tiantai headquarters factory are specialized in new energy car seats. In the first half of this year, the ningde factory's sales revenue increased by 598.40 percent year-on-year. The tiantai factory also began to supply Weima new energy vehicles. The company continues to force the new energy car seat market, Shanghai Fengxian factory is under construction, after completion will mainly serve the new energy car factory in Shanghai and its surroundings.

Scientific and Technological Innovation to create "Moat"

At the company's passenger car seat production base in Tiantai, Zhejiang province, workers are busy on the production line. In a fully automated production line not far away, car seat adjusters are delivered by robotic arms. "Full automation can greatly save labor costs, improve production efficiency, and the pass rate is also greatly improved." Factory site staff told reporters.

Having worked in manufacturing industry for many years, Chen knows that in order to maintain vitality and competitiveness in the fierce market competition, in addition to choosing the right track, the product line also needs to build a deep enough "moat". Chen said that among the company's four business segments, the technology research and development and production of key components are particularly important. Manufacturing needs to improve profitability and resilience through technology empowerment and refined management.

Taking the aviation seat sector as an example, the company's sales revenue keeps an annual growth rate of 30%-40%, but the high procurement cost of relevant core parts in Europe restricts the profit space of the aviation seat business. "If 80 percent of aviation seat parts are made in China, the overall cost is expected to be reduced by 20-30 percent and profits will be greatly improved." Chen Bangrui told reporters that the company's aviation seat carbon fiber certification work in the process of actively advancing.

The independent research and development of passenger car seat plate has been accelerated. Chen said that with the development of the new energy vehicle industry, the intelligent interior space has become the future development trend. This puts forward new intelligent upgrade requirements for car seats. In recent years, the company continues to increase investment in new energy vehicle seat lightweight and intelligent RESEARCH and development, which is the next strategic focus.

In terms of lightweight research and development, Tiancheng Controls has developed aluminum alloy frame car seat products, which are 30% lighter than traditional steel structure. The company's automotive seat lightweight technology is in the leading position in the industry and has the technical strength to support the world's top new energy vehicle enterprises. In terms of intelligent research and development, the company is developing intelligent seats for driverless cars, starting from the operating system and regulation system, aiming at different environments, through electric and intelligent regulation system, to achieve the purpose of changing the interior environment.

The linkage effect of industrial plate is obvious

"From construction machinery and commercial vehicle seats, to passenger car seats and aviation seats, to child safety seats, despite the different tracks, can form a synergistic force." Chen Told reporters, the company in the layout of different product lines to consider two issues, including whether to adhere to the company's main business, with a certain competitive basis; Whether the resultant force of mutual promotion can be formed between industrial plates.

"For example, new energy car seats have higher and higher requirements for lightweight, and the company has accumulated a lot of lightweight technology to do aviation seat business, which can help new energy seat lightweight research and development and application." Chen said that many years of experience in research and development and production of passenger car seats can greatly improve safety and comfort when applied to the design and production of child safety seats.

For the next step of the market judgment, Chen Believed that the aviation market picked up and related parts localization process accelerated, aviation seat plate profitability will gradually improve. As oEMS 'cost sensitivity to parts procurement increases significantly, the company's new energy car seat business has great development space in the future and will become the main profit growth point.