Die casting, full name of pressure casting, is a method that fills cavity of a die-casting mold with liquid or semi-liquid metal at high speed under action of high pressure and solidified quickly under pressure to obtain castings. It is a type of casting metal parts technology. It has advantages of high production efficiency, good product quality, high dimensional accuracy, less cutting, green environmental protection, and reliable mechanical properties of die-casting products. As a common basic industrial process, die-casting has emerged and gradually developed with needs of printing industry as early as the early 19th century.
Since the 1930s, aluminum, zinc, copper, magnesium and other alloys have been gradually used as die-casting materials. Since mid-20th century, die-casting parts have been used on a large scale in various industries such as automobiles, medical equipment, communications, home appliances, computers, etc. At the same time, with improvement of product performance requirements in various industries, die-casting process has gradually developed towards complex die-casting processes such as high-pressure die-casting and vacuum die-casting based on low-pressure casting.

With evolution of downstream end products and equipment such as automobiles, aerospace, and industrial electrical, requirements for precision processing of parts and components are getting higher and higher. Die-cast products need to be assembled with other parts to form complete components. As intermediate products, their precision processing characteristics are reflected in both product performance and product appearance. Intrinsic performance of die-casting products is mainly whether product structure, quality, etc. can meet needs of use, and performance requirements are generally related to specific application end products: industrial machine tool castings generally require high strength, high stiffness, and low stress; castings in automotive industry generally require high strength, high plasticity, and high fatigue strength; die castings used in aerospace field require high strength, good toughness, good fracture toughness, and strong resistance to fatigue crack growth. Appearance precision of die-casting products is reflected in product's dimensional tolerance and surface defects: the smaller dimensional tolerance, the higher installation and use matching performance with other parts; surface defects are mainly caused by under-casting due to poor fluidity of alloy liquid and unreasonable pouring system during die-casting process. Surface defects not only affect appearance of product, but also affect use effect of product to a certain extent.

Important links in manufacturing process of die-casting products include die-casting molding and subsequent finishing. Therefore, R&D, design and manufacturing of tooling such as molds and fixtures have become an important manifestation of technical level of die-casting enterprises. Runner design of mold pouring system is the key to affecting dimensional changes and surface defects of die-casting product; surface hardening treatment of mold can enhance hardness, wear resistance and heat resistance of mold, extend life of mold. At the same time, temperature conditions of mold also determine solidification degree and corresponding microstructure of casting, which is closely related to product performance. Post-finishing mainly uses cutting tools, fixtures and CNC equipment to machine die-cast blanks to further improve tolerance and appearance accuracy of product. Fixtures and special tools are indispensable and important components of finishing process. Their adaptability is an important guarantee for improving product dimensional tolerance and appearance accuracy. Rationality of tool and fixture design can achieve effects such as rapid replacement, self-positioning, and multi-station synchronous processing, which not only improves product accuracy but also further improves production efficiency.

Die-casting products that can be used in different fields are generally non-standard products customized by customers. Customers propose product design solutions based on specific application environment of product. To provide customers with customized products that meet requirements based on existing production equipment and processing technology requires foundry companies to have strong R&D capabilities and good manufacturing experience. Corporate R&D team first needs to accurately understand and analyze customer needs, also needs to have ability to convert production resources such as matching die-casting and finishing process selections, adapted tooling and production equipment into mass production of qualified products.

Die-casting products have customized attributes, product development needs to comprehensively consider factors such as product specifications, structure, usage, and production and processing process paths. In addition, environment in application fields such as automobiles, aerospace, and industrial electrical also imposes strict quality requirements on products. Therefore, cycle from product development, trial production to mass production is relatively long.

Die-casting industry is a capital- and technology-intensive industry. Demand for customization of die-casting products is high. Therefore, companies need to configure manufacturing, R&D, and testing equipment that match relevant requirements, they need to modify or update equipment according to changes in appearance size and accuracy requirements of end product. Die-casting companies need to invest a lot of money to purchase advanced die-casting equipment, finishing equipment, R&D equipment and testing equipment at home and abroad to improve company's hardware strength. On the other hand, companies also need to equip R&D personnel with rich professional knowledge and industry experience to demonstrate their software strength in terms of material application, mold development, product design, and process innovation.

Die castings have a wide range of applications and are widely used in automobiles, machinery, electronic appliances, and communication equipment. Among them, automotive industry uses the largest amount of die castings. At present, metal raw materials used in die-casting process mainly include aluminum alloys, magnesium alloys, zinc alloys, copper alloys, etc. Among them, aluminum alloys account for the highest proportion of die-casting alloys because they are widely used in automotive industry. In the future, with further development of technological level of die-casting industry, application scope of die-casting parts in new energy, aviation, aerospace, robotics and other industries will also be further expanded.

Because aluminum alloy production costs are low, process is mature, and application range is wide, aluminum alloy is the most important metal in current die castings. According to a research report by Huafu Securities, more than 80% of current die casting materials are aluminum alloys.
According to research results of GrandView Research, global aluminum die casting market size will be US$69.4 billion in 2021, and market size will reach US$112.3 billion in 2030. In addition, global market demand for aluminum alloy die castings will also increase from 8,932.3 thousand tons in 2021 to 11,376.9 thousand tons in 2028, with an average annual compound growth rate of 3.53%. Market size of aluminum alloy die castings will continue to expand steadily.
China is currently the world's largest producer and consumer of castings. According to data from American Foundry Association's Modern Casting magazine, China's casting output accounted for 49.24% of the world's total in 2020. In recent years, China's output has maintained a steady growth trend, with an average growth rate of 3.12% between 2010 and 2020.
Proportion of world casting production in 2020 China's casting production from 2010 to 2020 (10,000 tons)

 

 

From perspective of application fields, automotive industry is industry with the largest consumption and variety of die-casting products. According to Mordor Intelligence research report, automotive die-casting market will reach US$61.05 billion in 2021; global market size is expected to further rise to US$87.54 billion in 2027. According to calculations by Guosheng Securities, China's automotive aluminum die-casting market size will reach 89 billion yuan in 2020, and will reach 128.5 billion yuan in 2025. Therefore, development of automotive industry directly affects development of die-casting industry to a large extent.
Since the 1970s, countries around the world have begun to advocate energy conservation, emission reduction, and green environmental protection. Against this background, reducing automobile energy consumption and improving energy efficiency ratio has become an important direction for development of automobile industry. Lightweighting of automobiles is one of important ways to achieve goals of automobile energy conservation and emission reduction, improvement of design and manufacturing of automobile parts has become an important means to be considered first. Design and manufacturing of parts mainly considers two aspects, namely use of lightweight materials and application of advanced manufacturing processes, so that parts produced can meet both lightweight needs and practical application needs. Die-casting process has great advantages in both aspects, which determines that die-casting industry will be integrated with development trend of automobile energy conservation, emission reduction, and green environmental protection.

Automobile industry is an important part of national economy and a key industry for development of China's manufacturing industry. It has characteristics of high upstream and downstream correlation, high system integration, high added value, and obvious scale effects. At present, automotive industry is the largest application market in die-casting industry, and its development has a huge impact on the development of die-casting industry.

Automobile industry has characteristics of a long industrial chain, is closely connected with upstream and downstream industries such as steel, non-ferrous metals, semiconductors, electronics, energy, logistics, chemicals, etc. It can drive development of a series of fields including taxation, employment, and technology. Therefore, automobile industry has a strong driving role in industrial upgrading and development of industries in various countries. It is also an important symbol of development level of a country's manufacturing software and hardware strength. According to data from World Automobile Organization (OICA), in addition to sharp decline in global automobile production in 2020 due to impact of new crown epidemic, the overall development trend of global automobile production from 2010 to 2019 was good, increasing from 77.6216 million units in 2010 to 2019. 91.7869 million vehicles. Currently, global automobile production is gradually recovering, with an increase of 3.26% in 2021 compared to 2020.
Global automobile production from 2010 to 2021 (10,000 units)

 

With rapid development of China's national economy and rapid progress of manufacturing industry in recent years, China's automobile industry has also achieved considerable development and has now become an indispensable and important link in the world's automobile manufacturing industry chain. Made in China can be seen in everything from "big parts" such as car structural parts and engines to "small parts" such as car accessories and interior decorations. According to CCTV Finance data in 2020, China's automobile industry accounts for about 6.7% of total GDP. Automobile industry's role in driving economic growth is second only to infrastructure and real estate, and it has become a powerful engine for China's economic development.
Since entering new century, China's industrialization, urbanization, and modernization have advanced rapidly, and China's automobile industry has begun to maintain a steady upward growth trend. Benefiting from China's rapid economic development and various policy supports for automobile industry, China surpassed United States to become the world's largest automobile producer and seller in 2009, and has continued to rank first in the world. Since 2010, China's automobile production and sales have grown steadily, from 18.26 million vehicles in 2010 and 18.06 million in sales to 26.08 million in 2021 and 26.28 million in sales. Proportion of automobile production and sales in the world has also increased steadily, from 23.46% of production and 24.06% of sales in 2010 to 32.54% of production and 31.78% of sales in 2021.
China's automobile production and sales from 2010 to 2021

 

In 2018 and 2019, affected by factors such as macroeconomic impact of global automobile market and complete withdrawal of China's preferential passenger car policies, China's automobile production and sales experienced a slight decline. In 2018, China's automobile production and sales dropped by 4.16% and 2.77% compared with same period last year. In 2019, China's automobile production and sales dropped by 7.51% and 8.23% compared with same period in 2018. In addition, affected by COVID-19 epidemic, China's automobile production and sales continued to decline slightly in 2020, down 1.93% and 1.79% compared with same period last year. With end of domestic epidemic, China's automobile industry has gradually recovered. According to data from China Association of Automobile Manufacturers, in 2021, China's automobile production will be 26.08 million units, a year-on-year increase of 3.40%; China's automobile sales will be 26.28 million units, a year-on-year increase of 3.81%.
Overall, China's automobile market still has a lot of room for development. According to Soochow Securities' "Embracing the Golden Era of Automobiles - Automotive Industry 2021 Annual Investment Strategy" research report, 90% of China's passenger car sales in 2018 were first-time purchase demand and Trade-in demand accounts for only about 10% of scrap sales. China's automobile consumption demand is still vast, and automobile consumption market is far from saturated. In addition, according to data from Qianzhan Industry Research Institute, number of cars per 1,000 people in China in 2019 was 173. Compared with traditional developed countries and emerging countries, China's car ownership per 1,000 people is relatively low, only equivalent to one-fifth of car ownership per 1,000 people in United States, a developed country. It also shows that China's automobile consumer market has not reached saturation and there is still a large market space that can be tapped.
Comparison of car ownership per thousand people between China and developed and emerging market countries (vehicles)

 

Sales of new energy vehicles have grown rapidly in recent years. By the end of 2020, new energy vehicles had been sold in more than 100 countries and regions, with cumulative global sales exceeding 11 million vehicles. Compound growth rate of world new energy vehicle sales from 2013 to 2020 reached 47.62%. As European Union, China, United States, other countries and regions gradually tighten their carbon emission regulations, global sales of new energy vehicles have also achieved rapid growth. Compared with 2019, new energy vehicle sales will increase by 1 million units in 2020, with a growth rate of 43.78% and a market penetration rate of 4.2%.
Global new energy vehicle sales and market penetration rate from 2013 to 2020

 

China's new energy vehicles are also thriving. Despite impact of COVID-19 epidemic, China's new energy vehicles still achieved substantial positive growth in 2020, with annual sales reaching 1.367 million units, a year-on-year increase of 10.9%, accounting for the world's 42% of total sales. Structure of China's new energy vehicle market has also been gradually optimized. Demand for non-operational new energy passenger vehicles has gradually increased, and potential of new energy vehicle market has gradually emerged. According to Dasouchezhiyun data, China's non-operational new energy passenger vehicle sales in 2021 will be 256.46 million units, accounting for 87.8% of national new energy passenger vehicle sales, indicating that main force of new energy passenger vehicles in China has transformed into ordinary consumers, and public's recognition of new energy vehicles has gradually increased. According to "Energy-Saving and New Energy Vehicle Technology Roadmap 2.0" released by China Society of Automotive Engineers in October 2020, new energy vehicles will account for about 20% of total sales by 2025, and by 2035, annual sales of energy-saving vehicles and new energy vehicles will each account for 50%. In 2020, China issued "New Energy Vehicle Industry Development Plan (2021-2035)", which highlights energy conservation and efficiency from policy level, encourages development of mid-to-high-end electric vehicles, and points out direction for development of new energy vehicles in China. In the future, China's new energy vehicle market will continue to maintain good development.
Proportion of new energy vehicle sales in major global countries in 2020

 

Auto parts refer to various spare parts of motor vehicles and their bodies. Generally, a vehicle consists of tens of thousands of parts. According to application systems, auto parts can be divided into power systems, transmission systems, suspension systems, steering systems, electrical systems and other parts; according to different materials, auto parts can be divided into metal, plastic, and electronic parts. Among them, metal parts include traditional iron and steel parts as well as non-ferrous metal alloy parts such as aluminum, magnesium and copper.
Auto parts industry is an important part of automobile industry and basic support for development of automobile industry. It promotes and develops together with automobile industry. In global automotive industry value chain, parts industry accounts for more than 50%. In developed countries, output value of auto parts is generally 1.7 times that of complete vehicles. At present, automobile industry is characterized by global procurement. Division of labor and collaboration between major vehicle manufacturers and parts manufacturers have formed a pyramid supply structure with vehicle manufacturers at the top and supporting parts suppliers at all levels at the bottom. Vehicle manufacturers achieve relative stability in upstream of their own industry chain by maintaining their own supplier management systems.
According to statistics from 360 Research Report, size of the world's auto parts industry will be US$1,927.79 billion in 2021, and it is predicted that industry size will grow at a compound growth rate of 2.4%, reaching US$2,273.75 billion in 2028. At present, the world's auto parts industry is gradually shifting to emerging countries. At present, emerging auto market is not yet saturated and market is developing rapidly. It is main area for growth of vehicle consumption. Therefore, it has attracted many international vehicle manufacturers to deploy in emerging markets. In addition, labor costs in countries where emerging markets are located are relatively low, attracting more large-scale auto parts manufacturers to invest in and build factories in countries with low labor costs and transfer manufacturing links. With formation of industrial clusters, costs of auto parts manufacturers will be further reduced, gradually attract transfer of higher-tech production links such as R&D, design, procurement, sales, and after-sales, providing a technical foundation for upgrading of auto industry and auto parts industry in these emerging markets.
But at present, the world's auto parts industry is still dominated by companies from developed countries such as United States, Japan, and Germany that developed auto industry earlier. Currently, these three countries still occupy the largest number of seats among top 100 global automobile companies. According to statistical results of Automotive News annual global auto parts top 100 list, 23 Japanese companies, 23 American companies, and 18 German companies accounted for 64% of top 100 companies. A total of 8 auto parts companies in China have entered "Top 100 Global Auto Parts List of 2021". There is still a certain distance compared with developed countries that started earlier.
In recent years, sustained growth of domestic economy has become an important driving force for rapid development of vehicle market, thus promoting positive development of auto parts industry. Against backdrop of continued improvement in the industry, domestic parts and components companies continue to increase investment in research and development and accelerate industrial upgrading. Multinational auto parts industry giants also attach great importance to Chinese market, especially in the fields of new energy vehicles and intelligent connected vehicles, expand their business influence in China through investment and construction of factories in China, business and technical cooperation with Chinese companies, etc. For example, Bosch, BASF, Continental Tire, etc. have invested and built factories in China to expand their business layout in China.
Affected by macro market factors and the COVID-19 epidemic, China's automobile sales have experienced a slight decline since 2018. However, thanks to upgrading of China's auto parts industry, equipment rate of various configurations of automobile products has increased significantly, especially surge in demand for high-value parts such as new energy and intelligent connectivity, China's auto parts industry has maintained a good upward momentum. In 2021, auto parts market will reach 4.90 trillion yuan. Since 2015, compound growth rate of China's auto parts market has reached 7.30%.
China's auto parts market size from 2015 to 2021 (trillion yuan)

 

Maturity of China's auto parts companies is also reflected in rapid increase in China's auto parts exports in recent years. China's auto parts industry actively participates in global layout of auto industry chain and has now become an important part of the world's auto parts industry. At present, China has formed six major automobile industry clusters - Yangtze River Delta Industrial Cluster, Southwest Industrial Cluster, Pearl River Delta Industrial Cluster, Northeast Industrial Cluster, Central Industrial Cluster and Bohai Rim Industrial Cluster. These industrial clusters symbolize rapid development of China's automobile industry. To mature, it will have a profound impact on future development of China's automobile industry.

In recent years, automotive aluminum parts industry has developed rapidly. On the one hand, it benefits from policies that continue to put forward new demands for vehicle lightweighting, energy conservation and emission reduction. On the other hand, demand for development of new energy vehicle industry has stimulated development of aluminum parts industry on consumer side. According to "Evaluation Report on Aluminum Consumption in China's Automotive Industry (2016-2030)", China's automotive aluminum consumption continues to rise, reaching 4.506 million tons in 2020, and is expected to reach 10.700 million tons in 2030, with an average annual compound growth rate of 8.9%.
Aluminum consumption in China’s automobile industry from 2018 to 2030 (10,000 tons)

 

As environmental problems faced by mankind become more and more serious, energy pressure and environmental protection pressure are gradually increasing. Energy conservation, emission reduction and low carbonization have become one of themes of current era. China has promised to peak carbon emissions in 2030 and achieve carbon emissions neutrality in 2060. In the future, China will further attach importance to role of automobiles in energy conservation, emission reduction and environmental protection, start to realize greener and more environmentally friendly cars from both new energy vehicles and traditional fuel vehicles. Regarding methods to realize environmental protection of automobiles, Society of Automotive Engineers of China clearly pointed out in "Technical Roadmap for Energy Saving and New Energy Vehicles" that there are three aspects: application of lightweight materials, adoption of new manufacturing technologies and processes, and adoption of advanced structural optimization or design methods. technical path.
Among them, application of lightweight materials refers to promoting application of lightweight materials such as high-strength steel, aluminum alloys, magnesium alloys, engineering plastics, and composite materials in automobile structures to replace relatively heavier traditional materials. Aluminum and aluminum alloys have become the best materials for energy saving and lightweighting in automobiles due to their comprehensive performance advantages. According to "Energy Saving and New Source Automotive Technology Roadmap" compiled by China Society of Automotive Engineers, China's aluminum target for bicycles in 2020 is 190 kilograms, 250 kilograms of aluminum are planned to be used in bicycles in 2025, and 350 kilograms of aluminum are planned to be used in bicycles in 2030, demand for aluminum in bicycles continues to increase.

From a market perspective, replacing steel with aluminum in automobiles has become a global trend in the development of lightweight automobiles. Taking North American market, which has been developing for a long time and is relatively mature, as an example. According to research by DuckerWorldwide, from 1990 to 2020, amount of aluminum used in North American light vehicle bicycles is expected to increase from 74.8kg to 211.37kg, a growth rate of Reaching 182.58%, it is predicted that aluminum content of light vehicles will further increase in the future. By 2028, aluminum content of a single light vehicle can reach 256.28 kg.
Changes in the amount of aluminum used in light-duty vehicles in North America (kg)

 

With maturity and development of China's automobile industry, amount of aluminum used in automobiles and bicycles in China is also gradually increasing. According to research report of International Aluminum Association and CM Consulting, amount of aluminum used in passenger cars in China has been increasing since 2016, and research report predicts that amount of aluminum used in passenger cars in China will further increase in the future.
Changes and Forecast of Aluminum Use in Single Vehicle Passenger Cars in China from 2016 to 2030 (kg)

 

From perspective of new energy vehicles, rapid growth of new energy vehicles also requires a large amount of aluminum parts. At present, "range anxiety" of new energy vehicles is a major pain point in promotion process of new energy vehicles. According to survey results of iResearch's "2020 China New Energy Vehicle Industry White Paper", more than half of users will consider factors such as cruising range and safety when purchasing a car. At this stage, compared with 800km-1,000km cruising range of traditional internal combustion engine vehicles, relatively short cruising range of new energy vehicles limits further expansion of demand for new energy vehicles. In addition, due to the three electric systems (electric drive, battery, electronic control) and a large number of intelligent systems installed on new energy vehicles, weight of new energy vehicle has been significantly increased, further shortening cruising range of new energy vehicle. On average, curb weight of pure electric vehicles is about 100-250kg heavier than that of traditional internal combustion vehicles. For every 10kg weight reduction in vehicle's curb weight, cruising range of new energy vehicles can be increased by 2.5km without braking kinetic energy recovery. Therefore, vehicle lightweighting is one of main measures to alleviate range anxiety of new energy vehicles.
To sum up, future prospects of automotive aluminum parts are good. With expansion of traditional automobile and new energy vehicle markets, there is still much room for development of automotive aluminum parts.

Lightweighting of automobiles refers to use of modern design methods or use of new materials to reduce weight of automobile as much as possible while ensuring comprehensive performance indicators of automobile, ultimately reduce energy consumption and pollution emissions. However, lightweighting of cars is not simply about reducing use of materials, but comprehensive use of new design methods and new lightweight materials to reduce weight of car in a targeted manner while ensuring hardware performance indicators such as safety, crashworthiness, and comfort when driving, as well as economic indicators such as cost. In recent years, as countries around the world have attached great importance to environmental protection and proposed concept of "carbon neutrality", automobile lightweighting has become an inevitable choice for major vehicle manufacturers and auto parts manufacturers in the future, is one of important development directions of automobile industry and auto parts industry.
Since the 20th century, people have gradually realized impact of greenhouse gases on global environment, have begun to consciously take energy-saving and emission reduction measures to cope with world climate change. Since Kyoto Climate Conference, participating countries have successively introduced corresponding energy-saving and emission-reduction policies, standards for automobile energy-saving and emission reduction have also gradually increased. For example, China promulgated "Light Vehicle Pollutant Emission Limits and Measurement Methods (China Phase Six)" on December 23, 2016, which strictly limits vehicle emission standards. In 2017, China's Ministry of Industry and Information Technology, National Development and Reform Commission, Ministry of Science and Technology jointly issued "Medium and Long-term Development Plan for Automobile Industry", which stipulates that by 2020, average fuel consumption of new passenger cars will be reduced to 5.0 liters/100 kilometers, fuel consumption of energy-saving vehicles will be reduced to 4.5 Liter/100 kilometers or less. By 2025, average fuel consumption of new passenger cars will drop to 4.0 liters/100 kilometers. Corresponding energy-saving and emission-reduction bills have also been introduced abroad. U.S. EPA (Environmental Protection Agency) has issued vehicle greenhouse gas emission standards, and plans to achieve an average gasoline utilization efficiency of 7.06L/100km in 2026. European Union has introduced policies to reduce carbon dioxide emissions per kilometer of cars to 95g/km and truck emissions to 147g/km by 2024; Japan’s Ministry of Economy, Trade and Industry has formulated standards and plans to increase gasoline efficiency of automobiles to 3.94L/100km in 2030.
In order to achieve historical goals of energy conservation and emission reduction, governments and car companies of various countries have taken certain environmental protection measures, such as vigorously developing energy-saving and environmentally friendly new energy vehicles, continuously improving motor efficiency of new energy vehicles; constantly researching and optimizing engine and transmission system of automobiles to improve combustion efficiency of automobile engines and reduce energy losses in transmission systems; innovatively design automobile shapes to reduce energy losses caused by air resistance; focus on breakthroughs in lightweight technology for automobiles, improve vehicle energy utilization efficiency by reducing weight of automobile itself, not only achieves energy saving and emission reduction of automobiles, but also achieves effect of increasing cruising range.
At present, penetration rate of new energy vehicles in China's automobile consumption continues to increase. According to Dasouchezhiyun statistics, new energy vehicle sales in 2021 will account for 13.9% of total automobile sales in 2021. Compared with 2020, penetration rate of new energy vehicles has increased. 8.2 percentage points. However, in foreseeable future, traditional internal combustion engines will still be main power source of automobiles. Improvement of fuel efficiency of traditional automobiles is generally achieved by optimizing engine thermal efficiency and reducing vehicle weight. Limited by laws of physics, materials and engineering technology, it is difficult to improve thermal efficiency of automobile internal combustion engines. It has become a more effective way to achieve energy conservation and emission reduction by reducing weight of automobiles. According to research, 75% of a car's fuel consumption is related to weight of car itself. According to test research of academic papers such as "Research and Application Status of Automobile Body Lightweighting", "Automobile Lightweighting and Application of Aluminum Alloys in Modern Automobile Production" and "A Brief Discussion on Automobile Lightweighting Technology", under NEDC working conditions, reducing weight of vehicle by 100kg will save 0.39L of fuel; if car weight is reduced by 10%, fuel consumption can be reduced by 6%-8%, acceleration time can be reduced by 8%, emissions can be reduced by 10%, and tire life can be increased by 7%. Reducing vehicle mass can not only achieve energy conservation and emission reduction, but also improve vehicle driving performance, which meets dual needs of market policies and consumers, and conforms to trend of history.

With increasingly fierce competition in automobile market and increasing maturity of various automobile parts manufacturers, the world's major automobile companies have begun to focus on their core business, namely design and assembly of automobiles. Automobile manufacturers have chosen to separate from large-scale and comprehensive production model, streamline their own production processes, and replace independent production with superior auto parts purchased from all over the world. This choice has become an important trend in development of current automotive industry.
From perspective of emerging automobile market, vehicle manufacturers and auto parts manufacturers often establish corresponding production enterprises in corresponding regions due to factors such as policies, labor prices, and industrial chains to avoid problems such as disconnect between procurement and sales. With formation of cluster effect, auto parts industry is gradually moving to emerging market regions, and global procurement trend of auto industry has become increasingly obvious. In context of upgrading of China's manufacturing industry, China's auto parts companies have continued to achieve technological breakthroughs in the field of auto parts in recent years. There is a significant trend of import substitution, and some auto parts production clusters have developed rapidly. In the future, import substitution trend will become more significant, penetration rate of China's domestic auto parts in vehicle market will further increase, revenue scale and profit level of auto parts industry will also increase.

A car is often composed of tens of thousands of independent parts, which will bring greater pressure on supply chain and research and development for vehicle manufacturers. From perspective of vehicle manufacturer design, car companies have converted original car design and development for vehicle models into research and development for car platforms by building a universal car platform, expanded design of a single car into design of a series of car platforms, improved versatility of parts, achieved goal of one part being used in multiple models and series, reduced R&D pressure, supply chain pressure and stocking costs of vehicle manufacturer. From perspective of parts manufacturers, parts manufacturers introduce new technologies and new designs, combine and integrate several original parts into one part, realize production through one production line, further reducing spare parts pressure on vehicle manufacturers and parts manufacturers, as well as labor, time and other costs during production. Take integrated die-casting rear floor of Tesla cars as an example. Integrated die-casting rear floor integrates more than 70 original parts into two, which greatly reduces welding between parts, increases the overall strength of car, and reduces production costs.

Upstream companies in aluminum die-casting industry are mainly aluminum material suppliers, while downstream customers are mainly auto parts or vehicle manufacturers.

Smelting process realizes deployment of aluminum materials and other trace elements. Therefore, in addition to raw aluminum (primary aluminum production is based on natural bauxite as raw material, it is extracted into alumina through chemical methods, then liquid electrolytic aluminum is obtained through electrolysis), purchased aluminum also includes scrap aluminum (scrap aluminum and scrap aluminum parts that are recycled after consumption of aluminum products, as well as process waste generated by aluminum processing companies and casting manufacturers in process of manufacturing products, aluminum products that are scrapped due to substandard composition and performance.), which is combined with other trace metals to form aluminum alloys through processes such as melting, alloying, and refining.
Production of primary aluminum has characteristics of consuming aluminum ore resources, long production cycle, large energy consumption in production process, and high purity of aluminum metal. Enterprises with strong smelting technology can use scrap aluminum to replace primary aluminum procurement to a certain extent. On the one hand, they have more economic advantages, and on the other hand, they can effectively save natural resources and protect ecological environment.
Under increasingly stringent domestic solid waste import management system and environmental protection policy requirements, the overall volume of China's scrap aluminum imports has shown a downward trend in recent years. From perspective of market size, scale of China's social aluminum stock has increased rapidly in recent years. As more and more aluminum products enter replacement cycle, China's supply of scrap aluminum will enter a stage of sustained and rapid growth; at the same time, China's resource recycling system is also constantly improving, and improvement of renewable resource recycling system will also promote increase in supply scale of scrap aluminum materials.

Development of downstream industries will affect demand for precision aluminum alloy die castings. Automotive industry is currently the most important application field for aluminum die-casting products, and needs of automotive industry have a huge impact on industry market. On the one hand, there is still a certain gap between China's per capita car ownership and developed countries, and car market has great growth potential; on the other hand, under pressure of energy conservation and emission reduction, process of car lightweighting is accelerating and rate of car aluminumization continues to increase. With improvement, more and more automobile parts use aluminum instead of steel and iron. Therefore, in long term, with growth of automotive market and development of lightweight vehicles, automotive aluminum alloy die-casting industry still has considerable room for growth.

According to data from the China Foundry Association, number of foundry companies in China has dropped from 10,000 at the beginning of the 13th Five-Year Plan to current 6,000. Industrial concentration has further increased, and head effect has begun to become prominent. At present, China's foundry industry enterprises are mainly distributed in: (1) Pearl River Delta, accounting for about 30% of production capacity; (2) Yangtze River Delta, accounting for about 40% of production capacity; (3) Western Triangle (Sichuan, Shaanxi and Chongqing), accounting for about 15% of production capacity. From perspective of enterprise scale, due to large investment in fixed assets and R&D investment, small and medium-sized die-casting enterprises will gradually be unable to meet needs of market development and will be eliminated. As downstream customers' requirements for manufacturing technology and R&D levels increase, market share of companies with strong technical and financial strength will gradually expand, and industry concentration will further increase.
From a global perspective, there are currently fewer die-casting companies in developed countries, but they are larger in scale and more specialized. They have strong advantages in customer resources, funds, technology, etc. They generally focus on processing high-tech, high value-added die-casting parts such as automobiles and aerospace. At present, there have been some companies with considerable manufacturing technology capabilities in our industry, but the overall manufacturing strength and technical strength are still far behind those of companies in developed countries.
At present, with progress of China's automobile industry, gradual development of new energy automobile industry and development of new car manufacturing forces, aluminum alloy die-casting industry has good development prospects. Domestic auto parts die-casting companies are mainly divided into supporting die-casting companies for vehicle manufacturers and independent automotive precision die-casting production companies. They specialize in production of professional automotive precision die-casting parts and have achieved relatively stable long-term cooperative relationships with several downstream customers.

The world's major vehicle manufacturers and large multinational auto parts manufacturers have a set of strict quality system certification standards when selecting upstream auto parts suppliers. Generally speaking, in order for new entrants in die-casting industry to become qualified automotive parts suppliers, they first need to pass IATF16949 quality system certification. IATF16949 is a global quality management standard for automotive industry. This standard focuses on particularities of automotive industry and emphasizes requirements on safety-related components, product traceability, corporate responsibility, defect prevention, etc, is closely related to key automotive businesses. Therefore, this system certification has become an entry requirement for automotive parts suppliers.
In addition, automobile manufacturers and large multinational auto parts manufacturers have their own strict supplier review standards. When selecting suppliers, these large manufacturers will score various production links and manufacturing processes of suppliers. Only after passing review can they enter large manufacturer's supply chain system.
Finally, before mass production of relevant parts and components, strict advanced product quality planning (APQP) and production part approval and forming (PPAP) need to be implemented, repeated verification and test acceptance are required before they can be put into production. Once cooperative relationship between the two parties is established, vehicle manufacturers and parts manufacturers generally will not easily change supporting suppliers of corresponding parts to ensure product quality stability, product traceability and save later testing costs.
Therefore, strict supplier certification standards of downstream customers, relatively strong cooperative relationship between customers and suppliers have formed high industry barriers for new competitors in auto parts industry.

In production process of aluminum alloy die-casting parts, a series of difficulties such as material selection, material optimization, mold development, die-casting, and finishing must be taken into consideration. It is also necessary to communicate directly with customers and participate in product design. These difficulties require die casting manufacturers to have strong technical strength and talent reserves. In addition, safety and protective measures during aluminum alloy smelting, die-casting, post-processing have put forward higher requirements for company's safety production technology and personnel professionalism. Finally, mutual involvement of vehicle manufacturers and parts manufacturers at all levels in R&D has become a trend as professional division of labor in global automotive industry chain becomes increasingly obvious. This upstream and downstream synchronized R&D model places higher requirements on independent R&D, rapid response and continuous innovation capabilities of component suppliers. Therefore, new entrants to industry are limited by insufficient experience accumulation, process understanding, and initial R&D capabilities, making it difficult to become highly competitive in a short period of time.

Die-casting industry has a large capital investment and a long return cycle, requiring continuous investment in R&D and fixed assets. On the one hand, die-casting production process requires a large number of relatively expensive machines and equipment, such as internationally leading die-casting centers, machining centers, spot coolers, testing equipment, etc., to ensure appearance and accuracy requirements of produced products. On the other hand, in projects that produce auto parts, downstream customers often carry out repeated research and development, improvement and testing of production products, and acceptance cycle is long. During this period, company needs to continue to invest in research and development to ensure that it can meet needs and changes of downstream customers in a timely manner. It often takes a long time for a large die-casting component to go from project establishment to mass production, and capital investment is relatively large. Large capital investment in die-casting industry has become a barrier for new entrants to enter die-casting industry.

Die casting is a method in which liquid or semi-liquid metal is filled into cavity of a die-casting mold at high speed under high pressure, and solidified quickly under pressure to obtain castings. It is a type of casting metal parts technology with advantages of fast production speed, high dimensional accuracy, less cutting, green environmental protection, and reliable mechanical properties of die-cast products. In the 1940s, Fiat developed aluminum alloy cylinder heads and applied them to some models; in the 1950s, German automobile companies improved low-pressure casting technology and used aluminum alloy die castings for engine rear covers, air-cooling cylinder heads and other parts; In the 1960s, development of high-pressure die-casting technology greatly increased application of aluminum alloy die-casting parts in automobiles, gradually replacing cast iron. Developed countries such as United States, Germany, and Japan have profound industrial development accumulation, advanced die-casting technology, relatively complete material databases, mature design theories, and are in leading position in industry.
Quality of die-casting products depends on rationality of mold design, selection of raw materials, leadership in die-casting and finishing technology, and suitability of production equipment. Enterprises in China's die-casting industry are also continuing to conduct research and development on above-mentioned ways to improve quality and efficiency of die-casting manufacturing. In recent years, the technical level of China's die-casting industry has made great progress. With further upgrade of die-casting technology and die-casting equipment, aluminum alloy die-casting parts have been improved in strength, ductility, and wear resistance, their applications have gradually expanded from small and medium-sized shells to large structural parts with higher strength requirements.
In recent years, with support of national industrial policies, needs of downstream industries and continuous improvement of die-casting technology, domestic die-casting companies have also continued to enhance their own strength, forming an all-round improvement from basic technology to informatization modernization of production processes. A number of highly competitive enterprises have emerged in automotive, industrial and other industries, and application of die castings in automotive parts has been expanded. Taking automotive structural parts as an example, many die-casting companies in China have adopted advanced technologies such as high vacuum die-casting to overcome problem that die-casting parts cannot be heat treated and achieve mass production of automotive die-casting structural parts. In the future, China's die-casting companies will continue to deepen their integration capabilities, improve level of automated production, cooperate in-depth with car companies to continue to expand their market scale through rich technical strength and timely market services.

In recent years, with gradual deepening of China's industrial transformation and industrial reform, China has vigorously supported automobile-related industries and supported development of light metal-related industries. From perspective of application of aluminum alloys, according to China's "14th Five-Year Plan" and "Industrial "Four Bases" Development Catalog (2016 Edition)" promulgated by National Manufacturing Power Construction Strategic Advisory Committee, China supports development of basic materials and production processes such as "high-strength aluminum alloys", "high-performance aluminum alloys", and "aluminum and magnesium alloy casting and forming processes under pressure (low-pressure, semi-solid, high vacuum die-casting)"; in 2020, Ministry of Industry and Information Technology formulated "Aluminum Industry Standard Conditions" to further accelerate transformation and upgrading of aluminum industry, promote supply-side structural reform of aluminum industry, achieve rapid and high-quality development of aluminum industry.
From perspective of die-casting industry, die-casting companies that use aluminum alloys as raw materials are supported by relevant national industrial policies. In 2019, National Development and Reform Commission revised and released "Industrial Structural Adjustment Catalog (2019 Edition)", which listed application of lightweight materials such as aluminum alloys in automotive industry as an encouraged industry, clarifying important role of lightweight materials such as aluminum alloys in automotive industry. In 2016, Ministry of Industry and Information Technology promulgated "Nonferrous Metal Industry Development Plan (2016-2020)", which proposed development of lightweight aluminum alloy materials such as "high-performance aluminum alloy automobile panels, foam aluminum structural parts for automobile anti-collision systems, aluminum alloy precision forgings and aluminum-silicon alloy die-casting parts for automobile engines and internal structural parts."
From perspective of downstream automobile industry, China has proposed to promote and support development of automobile industry and automobile-related aluminum alloy industry in many policies promulgated and revised, such as "New Energy Vehicle Industry Development Plan (2021-2035)" "Green Travel Action Plan (2019-2022)", "Automotive Industry Investment Management Regulations", etc. These policies propose to expand automobile consumption, encourage development of new energy vehicles, and promote application of high-performance lightweight alloys in car bodies, parts, and complete vehicles. In the future, automobile industry will develop rapidly and healthily under guidance of policies, and die-casting industry will also develop well.

Lightweighting automobiles is an important way to save energy and reduce emissions, and is also one of important directions for development of automobile industry. Reducing weight of automobiles can not only reduce energy consumption of automobiles, but also enable new energy vehicles to carry more battery packs to improve endurance. Aluminum alloy is one of main automotive lightweight materials and plays an important role in development of automotive lightweight technology. According to "Technical Roadmap for Energy Saving and New Energy Vehicles" compiled by China Society of Automotive Engineering, China's automotive lightweight technology development goals include continuous increase in use of aluminum alloys in automobiles, it is planned that amount of aluminum alloy used in a single vehicle will reach 350 kilograms in 2030. Therefore, trend of automotive lightweighting provides good opportunities for future development of aluminum alloy die castings.

With development of global economic integration, auto parts industry has shown a trend of global procurement and industrial transfer. Due to factors such as cost, major vehicle manufacturers often choose to transfer their industries to countries and regions with production cost advantages through global procurement. At the same time, large auto parts manufacturers will also follow global procurement of vehicle manufacturers and choose to set up some parts factories in corresponding countries and regions with cost advantages to achieve nearby services and ensure cooperation with vehicle manufacturers.
From perspective of domestic market, China's automobile industry has developed vigorously in recent years, and has achieved excellent results in the field of new energy vehicles. Relying on scale and cost advantages of domestic automobile market, some high-quality independent parts manufacturers have achieved deep import substitution of some parts by relying on their own technology accumulation and technology introduction. With continued investment and development of new energy vehicles in China, China's auto parts companies will further expand market. In addition, world automobile production and sales maintain a sustained growth trend, and downstream market demand is relatively stable. Global automobile manufacturers are also gradually reducing proportion of self-made parts and components, trend of global procurement has further strengthened, providing good development opportunities for China's local auto parts suppliers with advanced manufacturing capabilities.

China's automobile industry started late. Compared with developed countries that developed automobile industry earlier, China's automobile industry has a relatively weak foundation and deficiencies in overall technical level, especially in the field of high-tech parts and components. From perspective of enterprise scale, China's auto parts enterprises are relatively small. According to statistical results of Autonews's 2021 Global Auto Parts Top 100 List, China only occupies 8 seats in 2021 Top 100 Auto Parts List. Compared with traditional auto manufacturing powers such as Germany, Japan, and the United States, difference is obvious. On the other hand, from a technical perspective, China's automobile industry has a certain lack of industry experience and technical strength, making it difficult to form strong brand competitiveness in international market, which is not conducive to expansion of economic benefits and the overall development of China's automobile parts industry.

Compared with large global auto parts manufacturers that have been developing in auto parts industry for many years, China's auto parts companies also have a certain gap in financial strength. R&D and production cycle of auto parts is long, and there are many types of auto parts products. Companies in industry need to invest a lot of money in R&D and equipment procurement. In addition, auto parts companies need to maintain strong technical research and development capabilities to enhance company's technical strength and maintain company's competitive position in industry. Compared with large foreign companies, China's auto parts companies often have relatively single financing channels and rely more on their own working capital and bank financing, which is not conducive to company's continued expansion of operations.

Die-casting and non-ferrous alloy casting industries require a large number of high-precision R&D talents, comprehensive management talents, and front-line operators who already have rich experience. However, our country has not yet formed an academic education and non-academic education system for die casting and non-ferrous alloy casting, cannot provide enough professional talents to relevant enterprises. Relevant talents need to acquire sufficient professional knowledge while working in enterprise. Talent training cycle is long, and there is a relative shortage of talents in die-casting field.