Report: huge potential for China auto parts industry

In recent years, China's auto parts industry has maintained steady development. However there are varying voices as to whether this momentum will continue. Although the auto parts industry will be faced with fierce competition of domestic enterprises and the increasing pressure from foreign enterprises, the Chinese auto parts industry strength has been greatly enhanced after years’ development, thus the Chinese auto parts industry will maintain stable development in the future.

First of all, preferential policies for the auto parts industry provide a good environment for development. In recent years, under the guidance of the state's industrial policies and relevant supporting policies, many local auto parts enterprises developed rapidly, and have made great contribution to local economy.
 
Second, the international auto parts investment has been transferring to China, auto parts export is promising. In recent years, due to the low cost of material and labor, the Chinese auto parts are drawing more and more investment from abroad, including high technologies and huge amount of capital, and more and more Auto giants are purchasing auto parts from China. This trend brought about unprecedented opportunities to the Chinese auto parts industry.

Third, a large number of private-owned enterprises and joint ventures constitute the majority of Chinese auto parts industry. The level of equipment and products has been greatly enhanced. Many enterprises integrated advanced technology such as CAD / CAM / CAE integration technology, 3D design technology and ERP and IM3 technology into their production.

Fourth, scale economy and integrated auto parts production has developed rapidly. In recent years, Kunshan in Zhejiang Province, Dongguan in Guangdong Province, Wuhu in Anhui Province, Changchun in Jilin Province, Shiyan in Hubei Province have successively formed giant auto parts bases, and these auto parts bases are playing a more and more important role in the auto parts industry.

In a word, more and more parts enterprises are realizing the importance of brand image and patents. According to the China Automobile Parts Industry Association statistics, many enterprises invest 5% of its sale revenue in research and development annually, and some even as high as 10%.

According to the statistics released by China Automobile Parts Industry Association, currently, there are seven state-level high-tech enterprises, and nearly 100 provincial-level high-tech enterprises.