China auto-parts exports further drop in Jan-Feb

China's auto part exports totaled 1.57 billion U.S. dollars in the first two months, down 37.7 percent from the same period last year, according to Customs statistics.

China's auto part exports saw slower growth in the second half of 2008, and started to fall in November, down 8.8 percent year on year. It then dropped further by 14.4 percent from a year earlier. Exports remained sluggish throughout this year, declining 28 percent year on year to 1.01 billion dollars in January. In February, it shrunk to 560 million dollars, down 49.9 percent year on year.

From January to February, exports in general trade fell 36.7 percent to 1.21 billion dollars, holding 77.3 percent of total national auto part exports. That in processing trade slumped 45.6 percent to 300 million dollars, accounting for 19.5 percent of the total.

The export of foreign invested enterprises dropped 37.8 percent to 820 million dollars in the same period, taking up 52.1 percent of the total. That of private enterprises lost 28.1 percent and fell to 500 million dollars, accounting for 31.6 percent of the total.

The U.S., E.U. and Japan remained the major export destination for China. Export to these markets accounted for 58.5 percent of China's total auto part exports.

In the first two months, China's auto part exports to the three reached 480 million, 290 million and 150 million dollars, down 36.4 percent, 35.9 percent and 50 percent from the same period of last year, respectively.

As the global financial crisis steepens, China's auto part exports are losing their footing.

In major export markets including the U.S. and E.U., auto demand continues to fall since the beginning of the year. Automakers suffered a hefty slump in sales during the first two months, which in turn leaned against Chinese auto part manufacturers.

Besides, most Chinese auto part manufacturers are weak in R&D and product competitiveness due to a lack of technology, talents and funding. Enterprises must discover ways to cut costs and prices to stay in the market. Most were left with limited room to profit and had insufficient money for product upgrades, especially for the upgrade of key auto parts including auto chassis and driving axles.

Under January's auto industry booster plan, China made clear that it would support the expansion of key auto part manufacturers through mergers, acquisitions and restructurings, and speed the construction of auto part export bases. All this may help boost auto part exports to a certain degree.