"There is no worst, only worse" is the portrayal of many steel companies' living conditions this year. China Iron and Steel Association recently disclosed that in the first half of the year, the average sales profit rate of large and medium-sized steel companies was only 0.13%, which was the lowest in the national industrial sector. On the one hand, the growth rate of the auto industry has reached double digits. On the other hand, the steel industry is getting sluggish. The fundamental reason for this contrast between the two industries that are closely related to each other is that China’s steel industry is still dominated by crude steel, and the automotive business is not the mainstream. Now, in order to reverse its survival, steel companies have started to increase their auto business. It even extends to the construction of auto parts bases. A few days ago, Wuhan Iron and Steel announced the construction of a parts base with Chery. This model is becoming a popular practice among steel companies. “This is exactly the same as Baosteel's practice in WISCO. It is to build a processing and cutting center around the entire vehicle plant so that it can dig deeper customer channels and narrow the relationship between auto customers and steel mills.†From the Baosteel Group's automotive parts business The people of the company once expressed to the media. Wuhan Iron and Steel Inspiration The predicament of the steel industry has long been known, but this year's situation is still beyond expectations. Li Xinchuang, the deputy secretary-general of the China Iron and Steel Association, revealed that among the 86 member companies of the China Iron and Steel Association, 35 have suffered a loss, with a loss of 40.7%. In particular, in June, due to the sharp drop in steel prices, members of the China Iron and Steel Association lost a total of 699 million yuan, which was the first industry loss this year. Industry sources said that if steel companies cannot effectively control production capacity, there will be risk of capital chain fracture. In order to reverse this situation, Wuhan Iron and Steel began to fully penetrate the automotive industry and seek higher profits to earn higher profits. It is understood that the joint production base of Wuhan Iron and Steel and Chery mainly produces automotive stampings. Wuhan Iron and Steel participated in the participation model, but the specific investment amount and shares held were not announced. At present, the production of automobile plates by Wuhan Iron and Steel ranks second in the domestic market share, second only to Baosteel. At the end of September 2012, Wuhan Iron & Steel and the German steel giant ThyssenKrupp signed an agreement to exclusively acquire the company's laser welding group. Deng Qilin, general manager of Wuhan Iron and Steel Group, said that after the acquisition, the laser welding group will be The existing equipment will be transformed and the domestic steel deep processing business will be developed. WISCO will achieve a higher level of breakthrough in the field of high-end automotive parts and components, and its market share will expand in an all-round way, becoming a globally competitive automobile plate production base. Now WISCO not only participates in the construction of parts and components production base, but also reveals that it will invest in the construction of auto OEMs in the future or as the case may be. Future trends The WISCO idea is also a new idea for many steel companies. With the expansion of the automotive market, several steel mills have turned their minds into action. Not long ago, Shougang officially launched its auto parts factory in Fangshan, and Baosteel also cooperated with Guangzhou Automobile Group to participate in the automobile production field. Among them, Shougang's approach is more thorough. Shougang has established its own auto parts business through acquisitions, and plans to use auto parts, high-end metal materials, and high-end equipment manufacturing as the main industries of the new Shougang in Beijing. A few years ago, Shougang established Beijing West Heavy Industries Co., Ltd. in conjunction with Fangshan State-owned Assets Operation Co., Ltd. and Baoan Investment Development Co., Ltd., of which Shougang held a 51% stake. On November 2, 2009, BWI acquired Delphi's global automotive shock and brake business. “The consolidation of auto parts business by steel companies is a general trend. 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