With the exception of a few foreign-invested enterprises, the technical capabilities of China's internal combustion engine starters and generators, as well as their parts and components manufacturers, are generally limited. State-owned and collectively owned enterprises face heavy burdens, with poor operating conditions due to various challenges, including insufficient investment, outdated technology, aging equipment, and a significant loss of skilled personnel, according to an industry expert recently told reporters.
The "Matthew effect" is becoming more evident in the two-Machine industry. With over 500 manufacturers producing internal combustion engine starters and generators (referred to as "two machines") and their main components, around 300 have full machine production capabilities. Domestic two-machine enterprises now hold over 90% of the market share, supplying components for passenger cars, mini-cars, light trucks, commercial vehicles, construction machinery, agricultural equipment, and ships.
As competition intensifies, leading companies—especially those with foreign partnerships—have gained significant advantages. These firms have rapidly expanded their market presence, becoming key suppliers for China’s automotive industry. Examples include Shanghai Valeo, Jinzhou Halla, Hubei Shendian, and Beijing Petra. Meanwhile, a few enterprises with core technologies have risen quickly by leveraging strong capital and market insight, capturing major shares in the mini-car segment, such as Chongqing Bonnet and Chengdu Huachuan.
Many companies are expanding production to meet growing domestic and international demand. Key players like Shanghai Valeo, Jinzhou Wonder Group, Dongfeng Steam Power, Hubei Shendian, and Huzhou Dehong are implementing large-scale expansion plans. For instance, Jinzhou Wonder Group has launched production lines for 600,000 generators and 520,000 starters annually, while Dongfeng Steam Power has invested over 20 million yuan in a high-power deceleration starter line. Huzhou Dehong plans to invest nearly 100 million yuan in a new generator production line.
Despite this growth, the industry still faces serious challenges. While about 49% of two-machine enterprises export products, most are focused on the after-sales parts market, with only a few like Shanghai Valeo supplying original equipment. The majority of these companies are small or medium-sized, with outdated equipment, low technological standards, and limited testing facilities. This leads to duplicated, low-quality products, price confusion, and counterfeit goods flooding the market.
Additionally, the localized production of critical components like voltage regulators, bearings, and electromagnetic switches struggles to meet demand, with high-end models still mostly imported. Rising raw material costs and squeezed profit margins from OEMs have further weakened the profitability of two-machine enterprises.
Experts suggest that the industry should focus on improving the technical quality and reliability of key components. Main engine factories should support component manufacturers in moving toward high-level, specialized, and mass-produced solutions, especially in developing independent R&D and production bases for critical parts like one-way clutches, electromagnetic switches, and voltage regulators.
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