Contact Us

A Report on the Development Trend of China's Auto-parts Industry (VII)

Gasgoo.com Auto Industry Institute From Gasgoo.com| May 21 , 2008

Part VII: Foreign auto-parts companies will carry out the strategic transition from occupying the Chinese market to restructuring the global value chains.

In addition to ever expanding their market shares in China, foreign auto-parts manufacturers would use their long presence in the country and the advantages of Chinese factors to relocate the global position of these factors as part of their strategic transition. This shift will be another obvious great trend in the coming ten years.

Anyway, different companies have their different strategies in China. Based on the survey of and interviews with nearly 30 big multinational companies, Gasgoo.com has summarized the six possible steps in the trend of the China strategies of the global companies, and has analyzed their changes in the research and development (R&D), sourcing, production, and sales in the value chains.

1. Targeting on sales in the Chinese market. This phase is past history now for many companies. Especially in the OEM market, they would no longer set up an agency or trade firm for importing or assembling products made elsewhere and then selling them in OEM market in China. But some brands will still use this strategy for entering China's OEM market.

2. Focusing on selling China-made or locally sourced products in the Chinese market. This is the major strategy now used by most companies. The rate of locally sourced products depends on the complexity and technology of the products, and maybe some products have to be imported in large quantities.

3. In addition to China-made and locally-sourced products, sourcing the products from stable suppliers in China and selling these products to other production facilities, thus helping the parent companies to promote the global sourcing strategy. An increasing number of foreign companies are taking this step.

4. Selling China-made and locally-sourced products to both the Chinese and global markets. China becomes one of the global manufacturing bases of the foreign companies and a member of their production system responsible for making certain varieties of products which can be favorably manufactured and delivered in China for global supply. Only few companies are using this measure, but our survey shows that more than 80% of the multinationals have plans for this strategy.

5. In addition to production and sourcing in China, setting up research and development (R&D) centers to meet the needs of locally developing the products for carmakers or direct customers. Some R&D centers are also built for customers outside the supply system (see part III of this report). These R&D facilities are mainly applied to supporting the development of products to be made in China. More and more companies have begun to take this step and the number will increase in the next five years.

6. The number of China's R&D talents is increasing and its R&D system is also improving. Especially when it sees China as a global R&D base, a multinational company will boost its investment into the R&D capability and build its China-based R&D center into a part of its global R&D system. This strategy will widely used in the future and is now listed on the strategic agenda of many global companies.

In short, global companies of auto parts will re-adjust the production, sourcing, R&D and every other section of the value chains and make China their important market as well as a key factor for boosting their global competitiveness. This will bring new opportunities and dynamism to China's auto-parts sector.


Gasgoo not only offers timely news and profound insight about China auto industry, but also help with business connection and expansion for suppliers and purchasers via multiple channels and methods. Buyer service: [email protected]   Seller Service: [email protected]

All Rights Reserved. Do not reproduce, copy and use the editorial content without permission. Contact us: khoahocxaydung.info.



| | | |

Site: Khoahocxaydung| | | | |

Copyright Notice © 2017 Khoahocxaydung.info Corporation and its licensors. All rights reserved.