1 Introduction to the Project

1.1 Project background

1.1.1 Product introduction

Automotive brake pads, also known as automotive brake linings, are friction materials fixed on the brake drums or brake discs that rotate with the wheels. Commonly used brake pad materials mainly include metallic materials, ceramic materials, and organic materials, each of which has its specific properties and scope of application.

The construction site of the project is located in Liaoyuan High-tech Industrial Development Zone, Jilin Province, relying on the existing industrial foundation of Liaoyuan City, producing automotive metal front and rear brake pads. Metal brake pads are composed of steel plates, bonded heat insulation layers and friction blocks. The steel plates are coated with anti-rust treatment, the heat insulation layer is composed of materials that do not transfer heat, and the friction blocks are composed of friction materials and adhesives. The main function of automotive brake pads is to generate braking force through friction to slow down or stop the vehicle.

1.1.2 Market prospect

(1) Global market prospect of automotive brake pads

In the automobile industry, the brake system is the core component to ensure driving safety, and the automotive brake pad is a key component of the automotive braking system, responsible for friction with the brake disc (or brake drum), thereby converting the kinetic energy of the automobile into heat energy, causing the vehicle to slow down or stop. The performance of brake pad is directly related to the braking effect and driving safety of the automobile, so its quality and performance are crucial.

The global automotive brake pad market is steadily growing, with a market size of 10.97322 billion US dollars in 2023 and expected to reach 12.21204 billion US dollars by 2030. The compound annual growth rate during the forecast period (2024-2030) is 2.57%.

The main sales regions of automotive brake pads include North America, Europe, Asia Pacific, and Latin America. Europe is the largest market for automotive brake pads, accounting for more than 30% of the global market share in 2023. North America and Asia Pacific follow closely behind. Latin America is a smaller market for automotive brake pads, but is expected to experience significant growth in the coming years.

The global automotive brake pad market is highly competitive, with several key players dominating the market. The major competitors include Bosch, Nisshinbo, ZF Aftermarket (TRW) and Tenneco (Federal Mogul). These companies are constantly innovating and launching new products to maintain their competitive advantage. Although the top five companies hold the majority of the market share, some emerging brands have successfully entered the market through innovative technologies and marketing strategies, reducing market concentration rate.

With the popularity of electric vehicles, there is a growing demand for brake pads specifically designed for electric vehicles. The braking requirements of electric vehicles are different from those of traditional internal combustion engine vehicles, and this demand has led to the development of specialized brake pads. In addition, consumers are increasingly concerned about the safety and performance of vehicles, and the demand for high-quality brake pads is increasing. However, the industry also faces several challenges, including increased demand for environmentally friendly materials, strict implementation of environmental regulations, and sustainability issues.

In summary, the global automotive brake pad market holds a major position in Europe, North America, and Asia Pacific, where the market is highly competitive, with key players constantly innovating to maintain a competitive advantage. At the same time, industry trends and challenges are also influencing the direction of the market.

(2) The market size of China's automotive brake pads

In 2023, China's automobile production and sales reached 30.113 million and 30.094 million respectively, ranking first in the world for 15 consecutive years. With the vigorous development of the automotive industry, China's brake pad market is also continuing to expand. According to statistics, in 2023, the market size of China's automotive brake pads was about 37.59 billion yuan, of which the front-end market size was about 33.64 billion yuan and the back-end market size was about 3.95 billion yuan.

In recent years, the awareness of environmental protection has been enhanced, and the government has strengthened the restrictions on harmful substances in automotive parts, especially brake pads, and promoted the research and development and use of asbestos-free, low-dust environmentally friendly brake pads. At the same time, the rise of electric vehicles has also brought new demand to the brake pad industry.

The upstream of the industrial chain of the automotive brake pad industry mainly includes raw materials such as nitrile rubber, phenolic resin, non-ferrous metal mineral powder, steel fiber, etc. With the continuous growth of China's automobile ownership, people's requirements for brake pad raw materials are getting higher and higher; the midstream of the industry is the production of automotive brake pads; the downstream of the industry is mainly used in automobile manufacturing and automotive aftermarket, and automotive brake pads are highly dependent on the development of the automotive industry.

Brake pad manufacturers are mainly concentrated in Zhejiang, Hebei, Hubei, Guangdong, Fujian and other regions, and the products in these regions account for nearly 80% of the country's production volume. For example, China's leading brake pad enterprises such as Shandong Gold Phoenix, Shandong Xinyi, Hangzhou Hangcheng, etc., have a much higher product market coverage than other brands.

In terms of the size of China's automotive brake pad industry, there are more than 500 domestic automotive brake pad manufacturers, with a sales value of about 35 billion yuan. Brake pad is one of the earliest automotive parts in China to enter overseas markets, and the export volume accounts for 1/5 of the total sales revenue of the industry. On the one hand, foreign automobile manufacturers and consumers tend to purchase low-priced and high-quality products, so that the export business of "Made in China" brake pads continues to grow. On the other hand, the prosperity of China's automobile market has prompted the brake pad industry to rise naturally. At the same time, brake pads are commonly used vulnerable parts in automobiles, and the large number of automobile ownership provides a guarantee for the subsequent stable development of the brake pad industry.

In terms of the proportion of the market structure of segmented brake pads, at present, the front wheels of economic passenger cars generally use disc brakes, and the rear wheels generally use drum brakes, that is, "front disc and rear drum"; mid-to-high-end passenger cars generally use disc brakes in all four wheels, that is, "front disc and rear disc"; commercial vehicles mainly use drum brakes at present. Different types of automotive brakes need to be equipped with different types of brake pads, disc brakes are equipped with disc brake pads, drum brakes are equipped with drum brake pads, and the brake linings are mainly used in trucks. With the increase in per capita consumption level, the overall demand for mid-to-high-end automobiles has increased, and the proportion of disc brake pads has increased.

In terms of China's automotive brake pad market pattern, at present, China's brake pad products are still mainly in the mid- to low-end market, and seize market share through the low price advantage brought by the domestic demographic dividend. But at present, there are many brands in China's brake pad market, mainly divided into large enterprises and small and medium-sized enterprises. Large enterprises such as Shandong Xinyi and Gold Phoenix occupy most of the market share, and the brand awareness of Shandong Xinyi and Shandong Gold Phoenix is much higher than that of imported brand leaders Bosch and Ferodo. At the same time, from one of the important production areas of friction materials in China, Hebei Xingyue, has also become a strong brand awareness of brake pads. With these major enterprises continuing to layout in the high-end market, China’s brake pad enterprises have gradually matured, and domestic brake pad brand has risen to a new height. The international competitiveness is gradually strengthening, and the scale of imports is expected to continue to decline. Domestic brands will continue to increase their share in the mid-to-high-end market.

1.1.3 Technical analysis

This project intends to cooperate with large domestic enterprises in this field. For the brake pads to be produced, a steel sheet is set at the top of the inner cavity of the brake pad body, and a wear-resistant layer is set at the bottom. On the side of the wear-resistant layer away from the steel sheet, a heat-resistant layer is set. On the side of the heat-resistant layer away from the wear-resistant layer, a sound-damping sheet is fixedly connected. On the side of the sound-damping sheet away from the heat-resistant layer, a reinforcing layer is set, and on the side of the reinforcing layer away from the sound-damping sheet, a cleaning layer is set.

Through the setting of the wear-resistant layer, the wear-resistant performance of the brake pads is increased, and the heat-resistance of the brake pads can be improved through the setting of the heat-resistant layer and the sound-damping sheet, and the noise can be reduced when in use; by setting the reinforcement layer and cleaning layer, the strength of brake pads can be improved and the surface can be kept clean.

1.1.4 Advantageous conditions of project construction

(1) Policy conditions

The 14th Five-Year Plan for the National Economic and Social Development of Jilin Province and the Outline of the Long-term Vision Goal for 2035 proposes that by 2025, the local supporting rate of parts in Jilin Province will reach 70%, and the scale of the automotive industry will exceed one trillion yuan.

In January 2023, the Jilin Provincial People's Government issued the Opinions of Jilin Provincial People's Government on the Implementation of the "Step up" Project of the Automotive industry Cluster, proposing that by 2025, the strength of the industrial clusters will be further enhanced, the industrial ecology will be comprehensively constructed, and the industrial scale will reach trillions of yuan; a new development pattern will be constructed with the Changchun automobile cluster as the core, and Jilin, Siping, Liaoyuan, Songyuan, Baicheng, Yanbian, Meihekou and other regions as specialized "supporting clusters" to coordinate and interconnect. FAW Group will be built as a world-class enterprise, Changchun will be built as a world-class automobile city, a new energy vehicle enterprise and brand will be introduced, a number of key parts enterprises will be cultivated, a number of innovation platforms will be created, a number of industry-education integration projects will be promoted, a number of key technologies will be broken through, and a number of application scenarios will be built, basically forming a new ecology of the new energy vehicle industry. The new energy vehicle industry chain and supply chain will serve the whole country and have a certain international radiation ability.

In 2020, the Office of the People's Government of Liaoyuan City issued the Implementation Measures for the Flexible Transfer of Industrial Land in Liaoyuan City (Trial), proposing: the supply of industrial land by means of flexible period, lease before transfer, combination of lease and transfer, and long-term lease shall be provided through bidding, auction and listing in accordance with the law; in principle, the flexible transfer period of industrial land shall be 10, 20, 30 and 40 years. Enterprises are allowed to voluntarily choose the land use right transfer period among the above periods. The Implementation Measures has improved the land supply system in Liaoyuan City while reducing the cost of industrial land.

(2) Resource advantages

In recent years, Liaoyuan City has continued to optimize and adjust the energy structure, fully launched the construction of a clean energy heating demonstration city in the north, and carried out 47 clean heating transformation projects such as "coal to gas" and "coal to electricity", which is expected to reduce coal consumption equivalent to 510000 tons of standard coal. In addition, Liaoyuan is rich in wind energy, solar energy, biomass energy and other resources, providing support for the construction of green and low-carbon projects.

(3) Industrial advantages

In recent years, Jilin Province has made every effort to promote the "six returns", break down the barriers of coordination, gather the strength of all parties, integrate industrial resources, continue to enhance the resilience of the industrial chain and supply chain, and the modern industrial system has become increasingly mature. It strives to transform industrial advantages into Jilin's revitalization advantages.

In order to consolidate and expand industrial advantages and strengthen the automotive industry cluster, in recent years, Liaoyuan City has strengthened cooperation with FAW Group, scientifically formulated the Implementation Plan for the Construction of New Energy Vehicle industry Supporting Base in Liaoyuan, compiled the New Energy Vehicle Parts Industry Development Plan for Liaoyuan City (2021-2025), and created two platforms: New Energy Vehicle Industrial Park and Dongliao Mold Industrial Park in the High-tech Zone.

Liaoyuan High-tech Industrial Development Zone, Jilin Province has planned a 4-square-kilometer automotive parts industrial park, focusing on the development of automotive parts and equipment manufacturing related industries.

(4) Talent advantages

Liaoyuan City is rich in human resources, and there are vocational colleges in the urban area, which can train talents according to the needs of enterprises. Liaoyuan City has a good foundation for industrial development, only 115.13 kilometers away from Changchun, a well-known "University City" and "Automobile City", which can meet the various talent needs of enterprises.

(5) Location and transportation advantages

Liaoyuan has obvious geographical advantages, 140 kilometers away from Changchun Longjia International Airport in the north and 240 kilometers away from Shenyang Taoxian International Airport in the south. It is located in the important axis belt of Changchun one-hour economic circle and Shenyang Railway urban agglomeration. Within a radius of 200 kilometers, there are 2 provincial capitals and 8 prefecture-level cities, with a population of nearly 40 million. The urban area has built a transportation network of "three rings, four verticals and six horizontals". The inter-regional highway and railway traffic is developed, No. 303 National Highway and Siping-Meihekou Railway run through the whole territory, and Liaoyuan-Xifeng, Liaoyuan-Changchun Railways, Changchun-Liaoyuan, Yingchengzi-Meihekou, Jilin-Caoshi, Liaoyuan-Xifeng Expressways, and Liaoyuan Civil Airport that will be built soon, constitute a comprehensive transportation system for entering the hinterland of the Northeast, the sea and customs.

1.2 Contents and scale of project construction

1.2.1 Product scale

After the completion of the project, an annual production scale of 200000 sets of automotive front and rear brake pads can be formed.

1.2.2 Contents of project construction

The project covers an area of 20000 square meters, with a construction area of 16000 square meters, workshops, research and development comprehensive buildings and other ancillary facilities will be mainly built, and production equipment will be purchased.

1.3 Total investment of the project and capital raising

1.3.1 Total investment of the project

The total investment of the project is 51.12 million yuan, including the construction investment of 41.1 million yuan and the current funds of 10.02 million yuan.

1.3.2 Capital raising

Self-raised by enterprise

1.4 Financial analysis and social evaluation

1.4.1 Main financial indexes

After the project reaches the production capacity, its annual sales income will be 55 million yuan, its profit will be 7.9 million yuan, its investment payback period will be 8.5 years (after the tax, including the construction period of 2 years) and its investment profit rate will be 15.4%.

Note: “10 thousand yuan” in the table is in RMB.

1.4.2 Social evaluation

Through the construction of the project, it can promote the development of the automotive parts industry in Liaoyuan City, extend the automotive parts industry chain, drive the development of upstream and downstream industries, and form industrial agglomeration; at the same time, it can provide more employment positions for the local area, improve people's living standards, and promote the harmonious development of society.

1.5 Cooperative way

Joint venture, cooperation and other ways can be interviewed

1.6 What to be invested by the foreign party

Funds and other ways can be interviewed

1.7 Construction site of the project

Liaoyuan High-tech Industrial Development Zone, Jilin Province.

1.8 Progress of the project

Attracting foreign investment.

2. Introduction to the Partner

2.1 Basic information

Name: Management Committee of Liaoyuan High-tech Industrial Development Zone, Jilin Province

Address: No. 1633 Caifu Road, Liaoyuan City

2.2 Overview

Liaoyuan High-tech Industrial Development Zone was established in 2001. In 2019, it was approved by the Jilin Provincial People's Government to be established as a provincial-level high-tech industrial development zone, with a planned area of 16.22 square kilometers and a total population of 29000. Located in the axis belt of the two major economic zones of Changchun and Shenyang, it is 100 kilometers away from Changchun in the north, 200 kilometers away from Shenyang in the south and 500 kilometers away from Dalian Port. No. 303 National Highway and Siping-Meihekou, Liaoyuan-Xifeng, Liaoyuan-Changchun Railways run through the whole territory, forming a comprehensive transportation system that extends in all directions with Changchun-Liaoyuan, Yitong-Kaiyuan, Yingchengzi-Meihekou, Jilin-Caoshi Expressways. As the core of Jilin Province's southward opening portal, it plays an important role in the construction of innovation and transformation core area in the central part of Jilin Province.

As the core of scientific and technological innovation, the engine of industrial upgrading, the window for attracting investment, and the leader of economic development, Liaoyuan High-tech Zone actively cultivates new kinetic energy for development, takes the road of characteristic development and differentiated development, promotes innovation and entrepreneurship, improves the quality of supply, and opens a new model of coordinated development of industrial clusters and chain industries. It has been listed as a pilot for regional brand construction of national industrial clusters, a provincial-level demonstration base for mass entrepreneurship and innovation, a national demonstration base for entrepreneurship and innovation of small and micro enterprises, and a demonstration base for new industrialization industries.

In recent years, Liaoyuan High-tech Zone has accurately planned and positioned itself, forming a functional layout of "dual-core drive, one district and four parks", and the large-scale and cluster expansion of "4+1 industry", with 2111 enterprises settled. The textile hosiery industry is unique, supporting the reputation of "China's Cotton Socks Capital" and "China's Famous City of Hosiery", and the production and sales of cotton socks rank first in the country. It has successively become a national-level export hosiery product quality and safety demonstration zone and a national-level foreign trade transformation and upgrading base; the extrusion technology of high-precision aluminum profiles is the world leading. With Qixing Aluminum Industry, Jusheng Light Alloy and Liyuan Precision Manufacturing as the leaders, the northern high-precision aluminum processing base has been built, and the market share of high-speed train body profiles accounts for nearly 60% in China. Lightweight products have jumped into the high-end market, and it has become an important strategic partner with Fortune 500 companies such as CRRC, Siemens, Alstom, and Bombardier; the pharmaceutical and health industry has obvious advantages. It has 176 drug numbers and is building a pharmaceutical fine chemical park covering an area of 2.62 square kilometers. Under the leadership of many key enterprises such as Boda Pharmaceutical, Boda Weiye, Baikang Pharmaceutical, Yinying Pharmaceutical, etc., the research and development system of anti-tumor drugs, anti-virus drugs, and health care products has become increasingly mature, and it has become the largest production base of chemical raw medicines in Jilin Province; the scale of the supporting industry for new energy vehicles has expanded rapidly; it plans to build a 4 square kilometer new energy vehicle supporting industrial base, forming a new energy vehicle supporting industrial system with Hongtu Lithium-ion Battery Separator, Sinopoly New Energy, Joyson Electronics, Shengyuan New Materials, and Jincheng Heavy Industry as the core, and has been designated as a strategic partner of FAW by the provincial government and signed a strategic cooperation agreement with FAW-FINDREAMS. The modern service industry promotes the integration of industry and city. It will vigorously develop productive and living service industries, actively promote the construction of JD.com, Yunxiang Smart Logistics Industrial Park, Holiday Inn Express Qixing, New Century Hotel, Ouya Shopping Center Phase II and other projects, and water, electricity, gas and other productive factors are fully guaranteed. It will plan Beijiang Commercial Street, revitalize Interlaken Square, renovate Youyi Road Commercial Street, and comprehensively create a characteristic commercial block integrating leisure, entertainment, catering, accommodation, commerce and other formats, as well as eating, drinking, playing and shopping.

2.3 Contact method

Postal code: 136299

Contact person: Song Yang

Tel: +86-437-3292088

Fax: +86-437-3292088

E-mail: jllyjk@163.com 

Contact method of the city (prefecture) where the project is located:

Contact unit: Liaoyuan Municipal Bureau of Commerce

Contact person: Ai Jing

Tel: +86-18643787709

E-mail: lyjhjxmc@163.com