After Japan’s “3.11” earthquake hit Japan this year, the production of Japanese auto companies has not yet been completely restored. The core technology research and production of key parts and components and the production bases for key components have been particularly severely damaged. Many local well-known auto and component manufacturers have stopped production. As a result, the production of some joint venture car companies in China was affected. In order to maintain its competitiveness in the Chinese market, Japan's spare parts companies have accelerated their transfer to China.

On June 7, Idex (Changzhou) Management Co., Ltd. approved the registration of industry and commerce, declaring that China's regional headquarters and R&D center formally settled in Changzhou, Jiangsu.

The shareholders of IDEXX (Changzhou) Management Co., Ltd. are ADVICS Co., Ltd., and the four companies of the world's top 500 companies, including Aisin Seiki, Nippon Denizuka, Sumitomo Electric, and Toyota Motor Corporation. The establishment of the company is Japan's largest supplier of automotive brake systems, not only for Japanese auto companies such as Toyota, Nissan, and Honda, but also for US car companies such as GM and Ford.

The earthquake in Japan has caused the global auto industry chain to fluctuate. It also prompted Japanese auto parts companies to intentionally accelerate the transfer to the Chinese market. For Japanese parts manufacturers, strengthening the vitality in the Chinese market will be an important way to maintain and enhance the competitiveness of the auto industry. With the expansion of automobile demand scales in emerging manufacturing countries such as China, the pressure on Japan’s domestic spare parts supply is increasing. Setting up factories in China will be one of the effective ways to reduce costs.

According to industry analysts, after the earthquake in Japan, it is very difficult to restore the pre-earthquake production scale in the short term, and it is necessary to accelerate the shift to the Chinese market where automobile production and sales volume is large. In addition, avoiding the risks posed by natural disasters increasingly exceeds consideration of employment and technological monopoly. At the same time, the parts manufacturers will only transfer processing and manufacturing links, and the R&D part will remain in Japan. This will be beneficial to Japan in improving the core competitiveness of parts and components, and it will also be in line with current changes in the value chain of the global automotive industry.

Japan is in the upper reaches of the global automotive industry chain. In the past 30 years, although Japan has gradually transferred its domestic auto assembly factories overseas, leaving only R&D centers and factories producing high value-added auto parts in China, this move has affected the sensitive nerves of related industries. Once there is a problem in the upper reaches of the supply chain, the entire vehicle assembly line may stop working within hours. For example, Japan is a major producer of automotive electronics chips. The earthquake caused the source of the electronic chip supply chain to break and there was no alternative supplier. A problem with a chip factory can lead to the failure of many automobile manufacturers around the world to produce properly.

Japan’s automotive electronics industry is in a leading position in the world and its industrial scale accounts for more than 30% of the world’s total. The earthquake caused the shutdown of dozens of automotive electronics companies in the area. During the Shanghai Auto Show, Honda's president, Ito Takahiro, once said that all Honda's factories and production lines have been repaired and restored, but there are problems with the supply of some components, mainly microprocessor chips in automotive computers. The production line of the chip factory was damaged in the earthquake. There is no accurate time for when to resume production.

In light of this, Japan’s earthquake has accelerated the pace at which component companies set up factories overseas. Japanese media reported that the Japan Industrial Innovation Agency, which was jointly funded by the officials and the people, announced on June 14 that it plans to involve auto parts companies jointly established by Japanese SMEs in China. At that time, according to the amount of capital increase, it plans to invest 1.5 billion yen to obtain more than 50% of the shares, and dispatch a management team to the local area.

Japan's small and medium auto parts manufacturing group will build a plant in China during the year and accelerate the transfer of its industrial chain overseas. It will be located in JAPIC, Danyang City, Jiangsu Province, and will be completed in November this year. It is expected to be completed within five years. There will be 400 Japanese parts manufacturers.

It is reported that Japan's spare parts manufacturing enterprises that have entered industrial parks will jointly purchase raw materials and integrate logistics systems under the coordination of JAPIC. Staff employment will also be subject to unified management, thereby reducing production costs.

At the same time, from the completion of the park to the three years in 2014, the settled enterprises will be exempt from rent.

After the earthquake in Japan, the entire automobile industry chain in Japan was affected. The breakdown of the parts supply chain caused the entire vehicle company to fall into the embarrassing situation of stoppages and production cuts. Not only in terms of production, the damage to the port has caused logistical transport to stagnate, and the drawbacks of the centralized production model in Japan have been exposed.

Among the disaster-affected companies, small and medium-sized component companies suffered the most damage. This is because Japan's large parts and components companies have implemented overseas transfer strategies as early as several years ago, and the ability of SMEs to independently develop overseas is relatively weak. The earthquake further exacerbated the mood of the small and medium-sized parts and components companies.

Industry analysts believe that Japan's parts companies will shift to large-scale production in China. While reducing the cost of Japanese parts and components and increasing the competitiveness of Japanese parts, it will also increase the market competition pressure of Chinese parts and components companies.