Automotive Parts
China’s automotive parts industry will continue to rely on the repair and replacement sector to drive exports in the year ahead as orders from the beleaguered vehicle assembly segment continue to drop.
Up until late 2008, some suppliers were actively pursuing OE contracts with carmakers, an arrangement that would enable the former to offer products at prices 20 percent higher than replacement models.
This export thrust changed in Q4 2008 when new-automobile sales started to falter due to the global economic crisis.
In contrast, the aftermarket continued to thrive as consumers turned to maintaining their existing vehicles rather than purchasing new cars.
The shift in market focus helped the industry stay on the growth track last year. Sales jumped 14 percent and exceeded $20.6 billion while volume went up 3 percent to 8 billion automotive lights, wheels and tires, electronic components and engine and mechanical parts.
Nearly half of revenue came from exports of car, bus and truck tires, and wheels and parts.
Amid the emphasis on the aftermarket, many companies are undertaking improvement efforts commonly associated with OE-based operations. These include investing in advanced manufacturing equipment, management systems, skilled personnel and compliance with stringent industry standards.
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