From November 18th to 20th, the "2012 China Auto Parts Industry Annual Meeting" took place in the "China Auto Parts Manufacturing Base" of Wuhan, Hannan. Over 350 manufacturers from across the globe gathered at the "China Auto Parts Industry Development Forum," expressing consistent optimism regarding the growth potential of China's auto parts sector. As the industry transitions from "cost competition" to "quality competition," a new era of transformation and upgrading is dawning. The Chinese automotive market is anticipated to experience at least a decade or two of high growth, with the auto parts service and after-sales market poised to become a long-term, stable, and massive opportunity.
In an exclusive interview with Xinhua News Agency, Dong Yang, Executive Vice President and Secretary General of the China Association of Automobile Manufacturers (CAAM), noted that the sales value of auto parts in China surpassed 2 trillion yuan in 2011, and is expected to grow by more than 20% annually in the coming years. By 2015, the scale of China's auto parts industry is projected to reach 2.5 trillion yuan. Since 2002, China's automobile production and sales have experienced sustained rapid growth for nearly a decade, establishing the automotive industry as a key pillar of the national economy. In 2009, China’s automobile production and sales topped 13 million units, ranking first globally. By 2011, these figures climbed to over 19 million units, maintaining the top spot for three consecutive years. According to CAAM data, during the first ten months of this year, China's automobile production and sales both exceeded 15 million units. Although the rapid expansion of the Chinese automotive market has slowed somewhat, entering what appears to be a "micro-growth" phase, the auto parts sector remains promising.
Dong Jianping, Deputy Secretary-General of CAAM, reported that from January to August this year, the cumulative industrial output value of China's auto parts manufacturing industry reached 1.44 trillion yuan, marking a 15.5% increase compared to the same period last year. While this represents a decline from the 23.9% growth rate recorded in the corresponding period last year, it remains above the 12.6% growth rate for the entire industry. The robust development of the auto parts industry is largely driven by the thriving automotive manufacturing sector, while the increasing number of vehicles has also created a vast aftermarket for domestic auto parts.
Dong Jianping emphasized that in the coming years, China's auto parts industry will continue to develop rapidly. Since 2010, the service and after-sales market in China has exceeded 200 billion yuan, reaching 224 billion yuan. By 2014, this figure is expected to surge to 652 billion yuan. Experts predict that China's domestic parts market will maintain at least a 20% annual growth rate over the next five years.
However, optimism among domestic and international players about the opportunities in China's auto parts industry extends beyond the market itself—it also reflects the industry's push towards technological innovation and product upgrades. Zhao Guoqing, Vice President of Great Wall Motor Co., Ltd., pointed out that following cost and price competition, the focus will soon shift to product quality. In the future, market share will depend on which companies can deliver superior quality products. Currently, China's parts industry boasts a scale of over 20,000 enterprises, ranking among the largest globally. Yet, due to insufficient self-development funds, high energy consumption, and low added value, the industry's competitiveness has waned as global standards for product quality and innovation rise. This is particularly evident in core technologies, where foreign advanced manufacturers dominate the domestic market. For example, foreign-funded enterprises control 100% of the EFI system, engine management system, ABS, micro-motor, and airbag markets, with respective shares of 100%, 100%, 91%, 97%, and 69%. Rough estimates suggest that foreign-owned component companies generated approximately 900 billion yuan in revenue last year, representing 54% of the Chinese parts market. Since China relaxed restrictions on the shareholding ratios of component firms, wholly-owned enterprises established by multinational auto parts companies have become increasingly common. In recent years, giants like Delphi, Denso, Sumitomo, Dana, Valeo, and Fujitsu Electronics have intensified their investments in China. Presently, 70% of the world's top 100 auto parts suppliers operate in China, with over 1,200 foreign firms involved in auto parts production on the mainland.
Dong Yang remarked that as domestic and international capital continues to show confidence in China's auto parts industry, the country is likely to become the global hub for auto parts production and manufacturing for years to come.
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