Driven by the rapid development of automotive industry, the growth of China’s auto parts industry has accelerated significantly in recent years. According to the statistics from China Automobile Industry Association, in 2015, the sales revenue of China’s auto parts manufacturing enterprises exceeded 3.2 trillion yuan, a year-on-year increase of 10.47%. It is estimated that the growth rate of the market will reach 7.1% in 2018, and the turnover is expected to reach 4 trillion yuan. Besides, benefiting from the support of domestic policies and globalization, China’s auto parts exports have also grown speedily. The major exporting destinations are developed areas such as Europe, the United States, Japan.
The advantage of China’s car parts manufacturers mainly lies in labor-intensive products, and six industrial clusters have been formed in Northeast China, Bohai Rim, Yangtze River Delta, Pearl River Delta, Central China and Southwest China where the labor resource is abundant. However, with regard to high value-added fields, these companies are facing fierce competition from multinational players including Bosch, Continental, and Denso. Compared with these industry leaders, China’s enterprises are relatively weak in terms of production efficiency and quality.
Many manufacturers in Germany and USA have begun to apply robotics to their production lines on a large scale or even built smart factories to mitigate the challenge from machining precision and labor costs. Moreover, lean production methods are being widely used in these developed countries, which is a systematic approach for waste minimization without sacrificing productivity. In China, automated production is not yet universal and most of Chinese branded car parts companies have not experienced the transformation from mass production to lean production yet. Therefore, their quality and cost control abilities are comparatively limited.
Looking to the future, the upcoming evolution of electric cars and autonomous cars is going to pose new challenges to the car parts industry. Although new electric vehicles still face many technical obstacles leading to winning the favor of end consumers, the strict emission regulations formulated by supranational organizations, countries and regions may promote a rapid growth of the electric vehicle market in the next few years. It has at the same time put forward requirements for significant technological breakthroughs in the fields of power batteries, driving motors, electronic control systems, sensors, etc.
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