BEIJING -
Multinational auto companies are finding they can
reduce costs by tapping into China's emerging
parts and components industry.
Chinese
enterprises, not so long ago considered inferior
in auto parts and components production, are now
enjoying success, marketing themselves on cost and
technical advantage.
Currently, there are
34 million registered motor vehicles in China, and
it's predicted that number will jump to more than
60 million in the next five years. Such market
potential has attracted rapid international
capital into the Chinese market.
About 70
of the world's top 100 auto parts and components
suppliers have come to China to develop business.
The number of
foreign-invested auto parts and
components manufacturing enterprises in China has
exceeded 1,200.
Among them, Bosch of
Germany has invested in 20 plants and opened 10
representative offices, five trade companies and
345 chain maintenance stations in China. As the
world's largest auto parts and component supplier,
Bosch Group plans to add 620 million euros (almost
US$790 million) in investment in China from 2006
to 2008, equaling its total investment in the
country to date.
The big investment and
deployment in China is obviously aimed at
competing with its rivals in the Chinese market.
The investment and expansion in China of
other auto parts and component giants, such as
Delphi, Denso, Sumitomo, Dana, Valeo and Fujitsu
Electronics, are also eye-catching.
Aside
from production costs, administrative measures
implemented in October on import of auto parts and
components also have boosted the industry. The
measures stipulate that a tariff equal to that of
a complete vehicle will be imposed for those using
more than 60% imported auto parts and components.
It is has inevitably resulted in more
parts being produced for assembly in China.
China currently has 5,000 auto parts and
components enterprises, each with annual sales of
more than 5 million yuan ($627,000). Counting the
township and small non-state-owned enterprises,
the total exceeds 8,000.
But they lag far
behind international enterprises in research and
development and technology. Large foreign
suppliers of auto parts and components rely on
R&D, while most domestic enterprises lack
R&D capability.
Meanwhile, China's
labor costs are only 20% of those of Europe and
North America, so its export of middle- and
low-grade auto parts and components is an
advantage. But low price only is not enough for
future competition of the industry. Auto parts and
components of high-tech content are mostly
produced by foreign holding enterprises or solely
foreign-funded enterprises.
The
customer comes first In other Chinese auto
developments, German car manufacturer Audi has
achieved the highest satisfaction rating among
Chinese customers in 2006, a new study has found.
Audi scored 834 in JD Power Asia Pacific's annual
China Customer Satisfaction Index Study released
on Tuesday.
The industrywide study, which
is scored on a 1,000-point index and includes data
on virtually every manufacturer selling new
passenger vehicles in China, revealed customers'
levels of satisfaction with the maintenance and
repair services they received at authorized
dealerships 12-18 months after they bought their
vehicles.
Ranking a distant second and
third place were overseas manufacturers Nissan
(814 points) and SGM-Chevrolet (813 points).
