汽车零部件|日本：中国效应步入新阶段

October 7, 2025 08:00 PM GMT Auto Parts| Japan Morgan Stanley MUFG Securities Co., Ltd.+ Shinji KakiuchiEquity AnalystShinji.Kakiuchi@morganstanleymufg.com+81 3 6836-5416Morgan Stanley Asia Limited+ China Effect EntersNew Phase Tim HsiaoEquity AnalystTim.Hsiao@morganstanley.com+852 2848-1982 The China environment for Japanese auto parts firms,havingbeen affected by the waning market share of Japan's OEMs, isnow entering a newphase of fiercer technical competition withChinese local parts firms. Shelley Wang, CFAEquity AnalystShelley.Wang@morganstanley.com+852 3963-0047Morgan Stanley MUFG Securities Co., Ltd.+ Hayato TakashimaResearch AssociateHayato.Takashima@morganstanleymufg.com+81 3 6836-5414 Key Takeaways New BEV models from Japanese OEMs in China use the tech of Chinese localfirms to lower prices. Reduced presence for Japan's auto parts firms is a risk. Chinese local parts are being used more in technically advanced areas likeelectrification and ADAS in particular; intensified competition is a concern. Our forecasts are unchanged as we expect fixed cost reductions from output cutsin China. However, intensified competition may pressure profits from F3/28-29 Japanese firms have an edge in reliability and quality, but cost and developmentspeed are issues. We're watching whether tie-ups with Chinese firms spread. Caution overall, but we highlight Toyoda Gosei (limited risk from intensifiedcompetition), Musashi Seimitsu (increasing business with Chinese local firms),and Koito (sharp deterioration in China seems to have subsided). Structural disruption of the China environment in stages:We analyze the impacton Japan's auto parts industry in 3 stages. Phase 1: Loss of Chinese market share byJapanese OEMs (2020-2025). Phase 2: Wider use of Chinese local auto partstechnology in new BEVs by Japanese OEMs (2025-2030). Phase 3: Intensified globalcompetition as Chinese local auto parts firms expand overseas (2030~). Scenario analysis:We calculate the impact of Phase 2. In our base case, averageJapanese parts maker sales per Toyota car declines 19% from F3/25 to F3/31. Ourbear case has a 28% decline with increased use of Chinese local parts not just inBEVs but other vehicles too. Our bull case sees a recovery in use of Japanese autoparts, for only a 9% drop.Our F3/26-28 estimates are unchanged, expecting fixedcost cuts across firms. However, the increase of J-OEM's China exclusive BEVs andToyota’s Shanghai Lexus launch may pressure profits from F3/29. Competitiveness of Chinese local parts firms:With our China team, we analyze thestrengths of Chinese local suppliers.Japanese suppliers may be exposed to toughercompetition in China-specific areas such as advanced technologies related to ADAS/AD and electric powertrains.Global competition with local Chinese OEMsexpanding in ASEAN & Europe in the medium term is also a concern. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. Japanese countermeasures:We see Japanese firms countering China business riskby cooperating with Chinese local firms, transacting more with Chinese OEMs, andreinforcing ops in India. We focus on Toyoda Gosei (business reforms to concentratewhere highly competitive as in airbags), Musashi Seimitsu (increasing sales toChinese local Tier 1 firms as a Tier 2 supplier), and Koito (expanding business withChinese local OEMs in and outside China). For analyst certification and other important disclosures,refer to theDisclosure Section, located at the end of thisreport. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Report Summary Our view on the auto parts industry is In-Line, but medium-term structural risk fromChina disruption is an important theme:We remain In-Line on the auto parts industry aswe see a balanceof riskssuch as the impact of US tariffs and delayed ASEAN demandrecovery, and opportunities such as a resurgence of HEV/ICE demand and measures byindustry firms to increase corporate value. However, in this report our focus is a specifictheme: the potential for structural disruption in the Chinese business environment toweigh on share prices and valuations over the medium term. Probability of Phase 2 of Chinese structural risk weighing on share prices and valuations:With F3/26 2Q earnings announcements starting in late October we believe itis necessary to continue to watch the impact of US tariffs in the short term. For Chineseoperations, with the posting of tangible fixed asset impairment losses in F3/