From November 18th to 20th, the "2012 China Auto Parts Industry Annual Meeting" took place at the "China Auto Parts Manufacturing Base" in Hannan, Wuhan. Over 350 manufacturers from around the globe participated in the "China Auto Parts Industry Development Forum," expressing confidence in the future of China's auto parts sector. Transitioning from "cost competition" to "quality competition," China's auto parts industry is entering a new phase of transformation and upgrading. With at least a decade or two of high growth ahead, the domestic auto market remains promising. Meanwhile, the service and after-sales market for auto parts is anticipated to remain 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 China's auto parts sales surpassed 2 trillion yuan in 2011 and are expected to grow by over 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 rapid growth for nearly a decade, making the auto industry a key pillar of the national economy. In 2009, China surpassed the U.S. as the world's largest car producer, with over 13 million units produced and sold. By 2011, this figure climbed to over 19 million units, maintaining the top spot globally for three consecutive years. As of the first ten months of this year, China's auto production and sales both exceeded 15 million units. While the overall growth rate of the domestic auto market has slowed, signaling the arrival of a "micro-growth" era, the auto parts industry continues to show strong potential.
Dong Jianping, Deputy Secretary-General of CAAM, reported that from January to August this year, China's auto parts manufacturing industry achieved an industrial output value of 1.44 trillion yuan, marking a 15.5% increase compared to the same period last year. Although this growth rate is lower than the 23.9% recorded last year, it still outpaces the overall industry's growth rate of 12.6%. Besides being driven by the broader automotive sector, the burgeoning number of vehicles has created a vast aftermarket for Chinese auto parts. Dong Jianping predicts that China's auto parts industry will continue to experience robust growth in the coming years. The service and after-sales market has already surpassed 200 billion yuan since 2010, reaching 224 billion yuan. By 2014, this figure is expected to soar to 652 billion yuan. Experts estimate that China's domestic parts market will maintain at least a 20% annual growth rate over the next five years.
Both domestic and international players are optimistic about China's auto parts industry, not just because of market size, but also due to technological advancements and product upgrades. Zhao Guoqing, Vice President of Great Wall Motor Co., Ltd., emphasized that following cost and price competition, China's auto parts industry must focus on product quality moving forward. Future success will depend on which companies can deliver superior product quality and capture larger market shares. Currently, China's parts industry boasts over 20,000 enterprises, representing the world's largest scale. However, due to insufficient self-research funding, high energy consumption, and low added value, its global competitiveness has weakened against competitors prioritizing quality and innovation. This issue is particularly pronounced in core technology components. In China's domestic market, foreign advanced manufacturers dominate most major auto parts sectors. Data from the Ministry of Commerce reveals that foreign-funded enterprises control 100% of EFI systems, engine management systems, ABS, micro-motors, and airbags. Last year, foreign-owned component firms generated approximately 900 billion yuan in revenue, accounting for 54% of the Chinese parts market. Following China's loosening of ownership restrictions for component companies, fully owned enterprises by multinational auto parts firms are becoming increasingly common. Recently, global giants like Delphi, Denso, Sumitomo, Dana, Valeo, and Fujitsu Electronics have accelerated their investments in China. Today, 70% of the world's top 100 auto parts suppliers operate in China, with over 1,200 foreign companies involved in auto parts production across the mainland.
Dong Yang expressed his belief that as domestic and international capital becomes even more bullish on China's auto parts industry, the country is poised to become the global hub for auto parts production and manufacturing for the foreseeable future.
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