1. Development status of filter manufacturing industry

1. Industry overview

A filter is an accessory that filters impurities or gases through filter paper or other materials. Generally refers to the car filter, which is an accessory to the engine. According to different filtering functions, it is divided into: oil filter, fuel filter (gasoline filter, diesel filter, oil-water separator, hydraulic filter), air filter, air conditioning filter, etc. The engine has three types of filters: air, oil, and fuel, generally called "three filters", plus air-conditioning filters, commonly known as four filters.

China's filter industry has maintained a rapid growth rate. In 2020, industry growth slowed due to the new coronary pneumonia epidemic. In 2021, the total industrial output value of my country's filter industry was about 32 billion yuan, an increase of 15% year-on-year; sales revenue was 31.5 billion yuan, an increase of 16% year-on-year. In 2022, the total industrial output value of China's filter industry will reach 37 billion billion yuan, an increase of 15.6 percent over the same period last year, and sales revenue will reach 36.5 billion billion yuan, an increase of 15.9 percent over the same period last year.

2. Industry characteristics

(I) product structure is unreasonable

At present, the product structure of China's filter manufacturing industry has certain irrationality. On the one hand, the product range is not complete, and some high-end products still rely on imports, such as diesel common rail system filters, automotive air-conditioning filters, etc. On the other hand, the product quality is not stable enough, and some products have quality defects such as damaged filter paper, poor sealing performance and low filtration efficiency. These problems affect the market competitiveness and development potential of China's filter manufacturing industry.

The level of (II) technology continues to improve

In recent years, with the continuous development of China's filter manufacturing industry, the technical level has also been greatly improved. On the one hand, it introduces and digests foreign advanced technologies, such as adopting new filter paper materials, improving filter structure design, and improving filter performance parameters. On the other hand, it is necessary to increase the intensity of independent innovation, such as developing new filtration products, applying for patent technology, and participating in the formulation of industry standards. These measures are conducive to improving the technical level and core competitiveness of China's filter manufacturing industry.

(III) environmental protection requirements are getting higher and higher

With the development of China's economy and society and the improvement of people's living standards, the awareness of environmental protection is becoming more and more intense. As an important part of the engine, the filter directly affects the emission performance and fuel economy of the engine. Therefore, the filter manufacturing industry is also facing higher and higher environmental protection requirements, such as reducing the resistance loss of the filter, improving the filtration efficiency of the filter, extending the service life of the filter, and reducing the waste of the filter. These requirements put forward higher requirements for the technology and management of the filter manufacturing industry.

2. Competition pattern of filter manufacturing industry

1. International competition pattern

At present, the international companies mainly engaged in filter manufacturing include Manhumer Group, Mahler Group, Cummins Filter System, Donaldson Company, Sogfi Group, Denso Company, etc. These companies have strong competitive advantages in technological innovation, product quality, market share, etc., and occupy the global high-end automotive filter supporting market.

These multinational companies also have a more extensive investment layout in the Chinese market. By setting up joint ventures or wholly-owned enterprises, they produce and sell various filter products in China, forming fierce competition with domestic independent brand companies.

2. Domestic competition pattern

At present, the domestic filter manufacturing industry, state-owned, private, joint venture, wholly foreign-owned economic components coexist, most of which are small and medium-sized enterprises founded by private investment. By the end of 2022, there were about 600 enterprises engaged in the manufacture of internal combustion engine filters for automobiles and construction machinery, including about 250 enterprises above designated size.

From the perspective of domestic industry market share, independent brand enterprises have certain advantages, but multinational companies occupy an important market position and almost monopolize the supporting market of high-end automotive filters. In 2022, China's independent brand filter supporting market accounted for about 65%, after-sales market accounted for about 35%. However, multinational companies occupy about 40% of China's filter supporting market and about 10% of the aftermarket.