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The history of the automobile spans over a century, but at its core has always been the engine—a vital component that defines performance and is a key selling point for automakers. For decades, the engine has served as a major profit driver, with product development and technological innovation largely controlled by the整车 companies.
Over the years, China's self-developed engine technology has made significant progress. Many mainstream vehicle models now come equipped with domestically developed engines. Models like Chery's Chuanqi GS4, Changan CS75, Bo Yue, and Haval H6 have gained popularity, with 1.5L to 2.0L displacement engines performing well in the market.
Despite these advancements, domestic engine manufacturers often rely heavily on international suppliers for critical components. According to the top 100 automotive parts companies in 2016, 70% of the top 10 companies had businesses related to engine parts. Leading firms such as Bosch, Magna, and Denso generated revenues of $46.5 billion, $36.4 billion, and $36.1 billion respectively, highlighting the scale and influence of global parts suppliers.
International companies focus their efforts on high-tech areas such as engine timing systems, fuel injection, and ignition systems—key elements that impact combustion efficiency. Major suppliers in the fuel supply system include Bosch, Denso, and Continental, while gas distribution systems are mainly supplied by Continental and Valeo. Ignition systems are dominated by Bosch and Federal-Mogul.
Bosch, for example, invested €6.6 billion in R&D last year, achieving total revenue of €73.1 billion, with R&D accounting for 9%. In China alone, with over 60,000 employees, more than 10% are R&D personnel, and gross margins for basic products can reach 50% or higher.
Domestic engine companies typically collaborate closely with global giants like Bosch, Denso, and Valeo, either through joint ventures or wholly-owned subsidiaries. Key components and engine calibration are often outsourced, leading to technical dependence. This dependency is one reason why international suppliers maintain a strong presence in the Chinese market.
The origins of domestic engine parts can be traced back to commercial vehicles. Through the introduction, adaptation, and innovation of engine technologies, a supply chain centered around individual engine components has gradually formed. Domestic manufacturers have mastered parts such as the valve train and crankshaft connecting rod system, gaining cost and scale advantages, and capturing a large share of the domestic market.
However, despite recent progress, the pace of internationalization and technological advancement remains relatively slow. Many domestic suppliers hesitate to invest in mold development and production due to concerns about costs. Additionally, most of China's engine parts exports are for after-market use rather than OEM orders, which limits the rate of technological improvement.
With the rapid development of new energy vehicles in China, production and sales have exceeded 500,000 units, and the market has surpassed 1 million. The era of electric vehicles is approaching.
Yet, the engine business remains one of the most profitable sectors in the automotive industry, indicating that engines still hold strong vitality and value. It is highly likely that traditional fuel vehicles and new energy vehicles will coexist for a long time. Therefore, continuous research and improvement of engine technology remain essential.