Foreign supporting enterprises step up their efforts to compete in the Chinese market

The research report of the world’s leading business consulting company, Arrow’s recently published “China Automotive Industry Outlook 2011” shows that despite the recent decline in the sales volume of China’s truck market, it is expected that the sales of the entire market will increase from now to 2016, Maintain an average growth rate of up to 15%.

The huge potential of the Chinese market, such as magnets, generally attracts foreign parts companies to camp in Huaan and grab food cakes.

Focus on the Chinese market

The development of multinational companies in China's auto parts market is optimistic about the development potential of China's economy, and they have stepped up their efforts to open up the Chinese market. They are investing in factories in China to build long-term roots in China.

On May 27, ContiTech Co., Ltd., a German supplier of automotive rubber and plastic products, was established and put into operation at a new factory in Changshu, Jiangsu. Although the company is headquartered in Germany, China has become the world's largest automobile production and sales country. The company's development in the Chinese market is no less than Europe. In the long run, ContiTech believes it is necessary to conduct a new round of investment in China.

In 2009, when the global financial crisis raged and the world economy was at a low tide, ContiTech invested 40 million euros to build a new plant in China and put it into production. In this regard, the company's president, Wen Teng, said that from a strategic point of view, China and Asia will be important markets for ContiTech in the coming decades. Its strategic goal is to build a manufacturing center in China and the Changshu plant will become a new manufacturing base in Asia. By 2014, the company’s sales plan in China will have more than doubled, accounting for global sales, and will increase from the current 10% to more than 20%.

Freudenberg Group China representative Wen Hande told a press conference held recently that as the world's largest auto market, China is crucial to the Freudenberg Group. Freudenberg's production plant in China has been in production for more than 10 years. Localized production is becoming increasingly important to meet market demand. Therefore, the company plans to invest further in increasing production capacity.

Wen Hande said that in fiscal year 2010, Freudenberg Group's sales in China reached a record high. Compared with the previous year, group sales increased by 46%. The first quarter of this year continued this growth trend, with sales up 28% from the previous quarter. Since 2005, Freudenberg has invested more than 1 billion yuan in its production base and sales network in China, and will continue to invest in the Chinese market in the future.

Bosch, the world's largest auto parts company, invests more in China. Philip Bachbach, chairman of Bosch Group, stated that in 2011, Bosch will invest 3.4 billion yuan to strengthen its business expansion in China. Bosch's sales in China's auto business reached 23.3 billion yuan in 2010, an increase of 38% over the previous year. In the past four years, Bosch China has achieved an average annual growth rate of 30%.

Fight for food from independent brands

Foreign-funded parts and components companies have implemented their strategy in China and have the advantage of advanced technology and talents. While providing parts and components for joint venture auto companies, they also supply products for auto brands.

Wei Saida (China) Automobile Safety System Co., Ltd. The third plant opened in Taicang this May. According to the relevant person in charge of Wei Suida, in addition to supplying the original joint venture automobile company, it will also provide support for the local auto brands. The reporter saw at the Wei Saida Taicang factory that several production lines had started to run in the workshop, and the product was marked with the name of its own brand enterprise. Technical staff told reporters that this is a product for the independent brand enterprise.

Local automakers develop high-end cars, and their requirements for parts and components have been raised accordingly. In this regard, foreign-funded enterprises have begun to meet the supporting requirements for the development of high-end products by self-owned brand vehicle companies, after gaining pre-scale advantages.

Gong Yadi, chairman and president of Wei Suoda (China), said that in addition to supplying Shanghai GM, Shanghai Volkswagen, FAW-Volkswagen, Chang'an Ford and other joint venture vehicle companies, they are expanding the proportion of supply to independent brand companies. A product development team was established to provide door locks, engine locks, and economical keyless entry and start systems to a number of independent domestic brands.

To develop high-end products, there must be supporting parts suppliers. According to public information, there are quite a few configurations on the Geely Emgrand from multinational parts and components companies, such as ABS+EBD, a safety device, from Bosch. Chery and the Great Wall are also customers of Bosch. The braking system of the BYD S6 is also provided by Bosch. Harman provides advanced audio for BYD E6 and also provides audio systems for Geely.

Vigorously develop the aftermarket accessory market

The development of the automotive aftermarket has provided good opportunities for auto parts manufacturers. The research report released by Arrow launches a forecast that sales of Chinese auto parts suppliers will grow strongly in the coming years, especially in the aftermarket. The report pointed out that by 2015, China's car ownership will increase from the current 60 million to 145 million, and the rapidly growing car ownership will promote the rapid growth of sales of aftermarket components, with an increase of more than 30%.

China's huge automotive aftermarket has attracted many foreign companies. The Freudenberg Group, which is optimistic about the aftermarket in China's auto market, has also recently expanded its aftermarket business. Its component companies have set up a special company for the auto parts market, Cortek, which provides about 2,500 accessories to nearly 50 authorized distributors. Almost covers all models on the market.