Desai Group takes heavy money into the car audio industry

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Recently, the famous Desai Group has brought heavy gold into the car audio industry. The electronic group with an annual output value of more than 10 billion yuan is also optimistic about the car "cheese"? The China Automotive News reporter made a special trip to Huizhou, Guangdong, facing his general manager.


China Automotive News: Straight to the point. Is the home appliance industry's increasingly narrow profit margins so that Desai is determined to come to the automotive industry this "feast" it?


Tan Yanbing: (laughs, very straightforward) At present, home appliance audio market, the net profit rate can reach 5% to 10% is very good. And we estimate that the current net profit margin of car audio is certainly above 15%. The automotive industry is very attractive and it is an industry full of opportunities. Three years ago, people still thought that the cake was too small, but now the cake is too big. At present, there are many companies that make car audio, and many companies are considering entering it.


In September 2003, Desai integrated Whirlpool, which originally produced car audio, into the automotive industry. However, there is no large-scale external publicity, and plans to wait until the new company is completely independent from the audiovisual company after this year. Strictly speaking, we are not a "new person." Siemens VDO (formerly China Europe Electronics) has always been a joint venture of our group (Desai holds 30% of the shares). But at that time, the main goal of the development of the group was not here, and the joint venture company was entirely operated by the foreign party.


Into the automotive industry, we have several considerations: First, car audio has a very broad market, this is driven by the automotive industry, is a sunrise industry. Second, Desai Group has developed to this scale and it needs to further form a new breakthrough in the industry. In 2003, Desai’s sales amounted to nearly 10 billion yuan, of which 7 billion were joint ventures. Our own brand sales amounted to less than 3 billion yuan. The Group's strategic development plan is to 2010, sales revenue reached 60 billion yuan. Especially if we are a state-owned enterprise that is not bigger and stronger, it will be eliminated, so we must find a breakthrough in the industry.


China Automotive News: Whirlpool started early and should be the pioneer of the industry. Is it difficult to meet it now?


Tan Yanbing: Hui Lepu was once brilliant. However, on the whole, the development is not good. In the past two years, the sales of car audio in the country have reached nearly 3 billion yuan. And 10 years ago, there may be only 200-300 million yuan in sales, all of which was a cassette player. At that time, when it came to the automotive industry, it would be nice to say that it was a "pioneer". Like VCD, the earliest VCD was Yanyan, but it was quickly eliminated.


China Automotive News: In the case of foreign brands dominating the domestic market, picking up the banner of national brands, demand for Desai's positioning and breakthrough will be high.


Tan Yanbing: We have a tacit agreement with Siemens VDO. Its market is mainly faced with European and American cars, and we are faced with China's emerging national brands. For example, all three Geely depots are now supported by us.


European and American brands and Japanese brand barriers are very strong, Japanese cars generally require the installation of Japanese audio, European and American cars are generally equipped with Siemens VDO products. These multinational companies have very strict requirements on suppliers, and it is very difficult for Chinese audio companies to enter. For example, Shanghai Volkswagen, Santana car cassette machine may be Chinese enterprises can enter, but to go to the high end, like Passat, Chinese companies will be difficult to enter. So Siemens VDO can be the longest in the domestic audio market share.


China Auto News: The main reason why it is difficult to enter is that the barriers in the audio industry itself are too strict, or are our products really inferior to people?


Tan Yanbing: There are two reasons. But mainly the previous one. Therefore, at present, domestic audio companies are mainly competing in the low-end market. But entering now does not mean that we will never enter in the future and will need time to accumulate. As long as we work hard, it is not impossible to squeeze out those foreign brands. Like we haven't done a DVD, all Japanese brands are on the market. What about now? Everyone buys domestic brands.


China Automotive News: What is the current lack of car audio industry? In other words, which (some) factors restrict our rapid development?
Tan Yanbing: Two points. One is talented people. At present, there is a shortage of R&D talent for car audio, and the salary price is also very high. The second is the core technology. We do not have the core technology at home in the car audio industry. We have to pay a very high patent fee for each integrated chip.


China Auto News: There is a saying that it is now an era of “fast fish” eating “slow fish” instead of “big fish” eating “little fish”. How do you view this statement?


Tan Yanbing: The reason why we have to set up a specialized car audio company is to make it a flexible "fast fish." First, then gradually grow into a "big fish." And our fast, may not be limited to car audio, at present we also cooperate with a Japanese company to produce components on the hydraulic drive shaft. Since we are optimistic about the automotive industry, we will take a comprehensive consideration from the industry chain.