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China Automotive Industry 2011 Yearbook -Automotive Parts-
China Automotive Industry 2011 Yearbook AUTO PARTS
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■ 2011.6.29
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Moving from Growth to Maturity Stage in China, Electrification, Lightweighting as well as Cost Competitiveness Needed for Auto Parts Makers

  • Identifies the direction of the Chinese automotive industry based on analysis of growth strategies of China's central and local governments
  • Analyzes parts procurement strategies and in-house parts production systems of 16 local and foreign automakers
  • Clarifies trends of new technology development, procurement strategy and business relationships of 40 major Chinese parts makers
  • Outlines business conditions of ten leading Chinese companies in the vehicle electrification sector
  • Explores business trends of 48 foreign automotive parts manufacturers in China

In 2010, the Chinese automotive market is expected to be close to the world´s highest recorded vehicle sales of 17.8 million units achieved by the United States and become the auto powerhouse of the world both in name and reality in 2011. Comparing with China´s production volume of 2.35 million units in 2001 when China became a member of the WTO, the Chinese automotive industry achieved astounding growth with unprecedented rapidity, recording seven-fold expansion in less than 10 years. Needless to say, the auto parts industry has also achieved explosive growth. In China, while the amount of foreign investment allowed in joint venture projects of complete vehicle manufacturers is limited to 50%, there is no restriction on the joint venture projects of automotive components. Consequently, the development of the Chinese parts industry was carried out by foreign companies and joint venture companies between Chinese and foreign suppliers, while Chinese suppliers became lagging behind in technology and R&D. However, recently, as seen in the acquisitions of Delphi Corporation´s brake and chassis business and GM´s Nexteer steering components unit by Chinese enterprises, there are an increasing number of Chinese suppliers that intend to fill the technological gap through takeover of foreign parts makers backed by the governmental supports. Furthermore, with an aim to make up for delay in technology accumulation in the auto parts industry, the Chinese government has been activating implementation of industrial policies to support and encourage development of technology and products in new technology areas such as electric vehicles and related parts.

It is firmly believed that this survey on the up-tothe-minute trends of the Chinese auto parts industry which clarifies the Chinese government´s industrial policies for 2015 as well as deep analysis on parts procurement strategies and business trends of Chinese and foreign auto parts makers will serve as an invaluable source of information for those conducting business related to China´s automotive industry, and contribute to further business expansion.

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China: Outline of Six Major Automotive Industry Zones

▼Chapter Two▲PAGE TOP

Chapter One

The Status Quo and Focal Points of the Chinese Auto Parts
Industry in China
 
1
 
2
8
3.
Parts Industry Policy: Support for Technology Development of Existing Sectors; High Focus on Fostering Towards EV Components
16
4.
EV/HV Parts Procurement: Active New Entry by Chinese Makers; Low Intensity Questions Supplier Profitability
18
5.
Parts Export and Import: Recovery in Exports from 2009’s Slowdown, Yet Risk of Trade Friction from Rapid Rise
24
6.
Analysis of Production Trends: Foreign Makers Take the Lead in System Integration and Material Sector While Chinese Dominate Equipment Sector
42
▲Chapter One / ▼Chapter Three ▲PAGE TOP

Chapter Two

Major Automakers’ Policies and Trends of Parts Procurement
Practices in China
 
79
 
1.SAIC Group
 

 
Restructures Parts Subsidiaries; Looks to Lift Product Competitiveness by Strengthening Ties with GM
80
2.FAW Group
 

 
Lifting Local Procurement to Reduce Logistics Cost; Realignment of Parts Business Through Listing of Fawer
81
3.Dongfeng Motor
 

 
Reevaluates Procurement System for Commercial Vehicles; Efficient Business Through Parts Subsidiary Integration
82
4.Chang’an Automobile
 

 
Despite Consolidating Joint Procurement Plan Through Integration of AVIC Units, Realignment of Parts Business Poses Problem
83
5.Chery Automobile
 

 
Targets New-Energy Vehicle Annual Sales of 50,000 Units by 2015; Accelerates Formulation of Supply Chains
84
6.BYD Auto
 

 
Enhances Internal Product Manufacturing by 70 Percent; Achieves Weight Reduction Through Self-Developed All-aluminum Engine
85
7.Geely Automotive
 

 
Acquires Volvo, Forging Ahead into the Foreign Market; Accelerates Buildup of Overseas Supplier Chain
86
8.Great Wall Motor
 

 
Enhances Production System for 2 Million-Unit Target by 2015; Boosts Parts Capability at Bases in Tianjin and Hebei
87
9.VW
 

 
Aims for Local Procurement Ratio of 100 Percent; Considers Partnerships with Local Battery Makers for Expansion of EV Business
88
10.PSA
 

 
Advances Local Procurement and Development of Next Generation Engine; Develops New-energy Vehicle Strategy
89
11.GM
 

 
Strengthens Partnership with SAIC in Developing New-energy Vehicle Business; JVs Increase Production Capacity of Core Parts
90
12.Ford / Mazda
 

 
By Enhancing Local Procurement, Strengthens Engine Production; Focuses on Parts Support for Mainland China
91
13.Toyota
 

 
Aims to Reduce Parts Procurement Cost by 30 Percent in 2013, Increasing Local Parts Procurement in China
92
14.Honda
 

 
Strengthens Competitiveness Through Local Manufacturers; Boosts Procurement and Promotion of HEV Parts
93
15.Nissan / Renault
 

 
Increasing Efficiency of Guangzhou Plant; Contemplates Expanding CVT Mounting; Suppliers Accelerate Construction of New Plant
94
16.Hyundai / Kia
 

 
Construction of New Plants in 2012 Aiming to Increase Capacity to 1.8 Million Units; Local Content Ratio Over 90 Percent
95
▲Chapter Two / ▼Chapter Four▲PAGE TOP

Chapter Three

Business Conditions of 40 Major Chinese Auto Parts Makers
97
 
1.Beijing Hainachuan
 

 
Reduces Dependency to Parent BAIC Group; Switch to Focus on Modular Parts by 2015
98
2.Binzhou Piston
 

 
2010 Business Performance up over 100% YOY; Eyes 1 Bn CNY Sales in 2015
99
3.Bothwin Investment
 

 
To Specialize in Commercial Vehicle Axles; High Business Risk from Distribution Costs
100
4.Changchun Xuyang
 

 
Capital Participation from Faurecia; Aims to Expand Sales Routes Outside FAW
101
5.Dicastal Corp.
 

 
With Projections for Export Decline, Starts Capacity Buildup Indicating Expansion into Local Market
102
6.Datong Gear
 

 
By 2015 Aims for Revenues of 6 Bn CNY; Accelerates Construction for Capacity Expansion
103
7.Desay Group
 

 
Acquires Entire Share Capital in Siemens VDO (Huizhou); Enhances Vehicle Electronics
104
8.East Joy Long
 

 
Supplies Primarily Chinese Automakers; Accelerates Switch from Low to Higher Value-added Products
105
9.Tong Yang Industry
 

 
Strong Mainland Sales Drive Overall Growth; Aims for Sales Revenues of 60 Bn TWD in 2015
106
10.Fengfan
 

 
Aims for 10Bn CNY Sales Revenues by 2020; Adjusts Product Mix to Increased Added Value, New Energy
107
11.Fuyao Group
 

 
Channels Investment to Automotive Business in Aim to Become World’s Biggest Auto Glass Supplier by 2015
108
12.Hangsheng Electronics
 

 
Boosts AV Capacity Aiming for 10 Mn Sets in 2015; Focuses on Foray into Electronic Drive Parts
109
13.Huaxiang Group
 

 
Focus on Interior Trim Business Centered on Listed Subsidiary Ningbo Huaxiang; Increases Buyout, Selloff of Assets
110
14.Huayu Automotive
 

 
111
15.Jinheng Automotive
 

 
Sells off Airbag Business to Concentrate on EMS; Strengthens Product Development
112
16.Dragon Hill Wuling
 

 
Reduces Dependence on SAIC-GM-Wuling; Hedges Business Risk with Foray into Electric Refitted Vehicles
113
17.Lingyun Industrial
 

 
Increases Capacity in Aim for 10 Bn Revenues in 2015; Accelerates Business Expansion by M&As, Reorganization
114
18.Lioho Machine Works
 

 
Mainland Foray Centers on Ties with Foreign Automakers in Coastal China; Expectations for Inland Expansion
115
19.LYC Bearing
 

 
Aims for Sales Revenues of 10 Mn CNY in 2015; Targets Higher Supply to Compact Cars with NTN Joint Venture
116
20.Minth Group
 

 
Builds Trade Ties Centered on Japanese Companies; Achieves Top Profitability in the Industry
117
21.Nanjing Aotecar
 

 
Controls 80 Percent of Domestic Vehicle AC Compressor Market; Aims to Supply EVs, HEVs
118
22.Qingte Group
 

 
Succeeds in Heavy-duty Vehicle Axle Business with Emphasis on Development Capacity and Quality; Newly Enters Large Bus Axle Sector
119
23.Ruili Group
 

 
Returns to Positive Growth in 2010 with Increasing Domestic OEM Supply; Aims to Boost Sales to New-energy Vehicles
120
24.Sanhua Holding
 

 
Expands Capacity to Boost Sales Revenue to 10 Bn CNY in 2014; Enhances Production System Through Business Acquisition
121
25.Gold Phoenix Group
 

 
Ensures Stable Revenues Through Overseas OEM Supply; Also Focuses on Development for Railways, Airplanes
122
26.Hande Axle
 

 
Steps Up Capacity Enhancement to Boost Sales to 550,000 Units in 2011, 900,000 Units in 2015
123
27.Tianrun Crankshaft
 

 
Solidifies Foundation of Heavy Vehicle Crankshafts; Boosts Capacity in Md/Sm Commercial Vehicle, Car Sector
124
28.Tempo Motor
 

 
Acquires US Parts Assets with State-owned Partner; Aims to Reduce Dependence on Western Market
125
29.Wanfeng Auto
 

 
Ensures Production Increase to Meet Growing Weight Reduction Needs; Boosts Capacity of Forged Aluminum Wheels
126
30.Wanier Transmission
 

 
Acquires Superior Position in the Mini, Light CV Transmission Sector; Likely to Foray into Passenger Car Market
127
31.Wanxiang Group
 

 
Boosts Business at Home, Abroad; Actively Invests in Equipment to Meet Rising Demand in China
128
32.Weichai Power
 

 
Aims for 100 Bn CNY in Sales Revenue, 2.5 Mn Units in Sales Volume in 2020 by Focusing on Product Strength Improvement
129
33.Weifu High-technology:
 

 
Strengthens Tie-up with Bosch; Develops Supply
System of Low-cost Common Rail Parts
130
34.Xinfeng Enterprise
 

 
Plans to Raise Annual Capacity to 2 Million Units in 2013; Steps Up Capacity Enhancement to Boost Sales
131
35.Xinyi Group
 

 
Raises Sales Revenue 60 Percent Due to Brisk Domestic Market; Focuses on Development of Energy-efficient Glass Products
132
36.YAPP Automotive
 

 
Increases Production at Home, Abroad; Aims to Become One of Top Three in Global Fuel Tank Business
133
37.Zhejiang Asia-Pacific
 

 
Speeds Up Capacity Enhancement for OEMS; Implements Sales Expansion Strategy in Repair Market
134
38.FAWAY
 

 
Strong Performance of FAW-VW Boosts New Profit to 50 Percent; Heavy Reliance on Group Members Is Cause for Concern
135
39.Yuchai Machinery
 

 
Aims for 100 Billion CNY in Sales Revenue by 2015; Focuses on Tie-ups with Automakers, Development of Energy-efficient New Products
136
40.ZYNP
 

 
Specializes in Engine Cylinder Business; Aims to Boost Annual Capacity to 42 Million Units by 2012
137
▲Chapter Three / ▼Chapter Five ▲PAGE TOP

Chapter Four

Business Conditions of 10 Major Chinese Auto Parts
Suppliers Related to Electrification
 
139
 
1. China Tex Mechanical &
  Electrical
 

 
140
2. CSR Times EV
 

 
Pursues Electrification Parts, New Energy Bus Business;
Eyes Expansion with Capital from SG Automotive
141
3. Ningbo Yunsheng
 

 
Boosts Neodymium Magnet, Motor Business; Aims to Lift
Motor Development with Takeover of Nikko Electric Industry
142
4. Broad Ocean Motor
 

 
Forays from Home Appliance Motor to Automotive
Business; Ramps Up CAPEX, Development
143
5. Dajun Technologies
 

 
With Core Products Permanent Magnet Reluctance Motors,
Concern for Business Risk from Limited Orders
144
6. Shanghai Edrive
 

 
Despite Securing Customers,
High Costs Bottleneck to Increasing Orders
145
7. Tianjin Lishen
 

 
Aims for Sales Revenues of 100 Bn CYN; Rush to Boost
Lithium-ion Battery Capacity to Supply 200,000 Vehicles
146
8. Tianjin Qingyuan
 

 
Switches from EV Refitting to In-house Development of Mini
EV Platforms; Participates in EV Projects with CBU Makers
147
9. Wanxiang EV
 

 
Business Expands to Batteries, Motors, Control Systems;
Considers Becoming Subsidiary of Wanxiang Qianchao
148
10. Winston Battery
 

 
Looks to Boost Domestic Rechargeable Battery Sales on
Stability, Reduced Charging Time
149
▲Chapter Four / ▼Appendix▲PAGE TOP

Chapter Five

Business Trends of 50 Major Global Parts Makers in China
151
 
1. Bosch
 

 
Supplying Low-cost Products to Local Automakers; Electric
Powertrain, Safety Technology Draw Attention
152
2. Delphi
 

 
154
3. Magna
 

 
Positions EV Business on New Growth Strategy from 2010;
Eyeing Establishment of R&D Center
156
4. Schaeffler
 

 
Accelerates Setup of New Bases; Focus Draws
on Forthcoming Integration Trends with Continental
158
5. ArvinMeritor
 

 
Finalizes Sell-off of LVS Business; Specialization in CVS
Business from 2011; Launch and Development
of Spare Parts in China
160
6. ASIMCO
 

 
Purchased by Investment Firm and Undergoes System
Restructuring; Further Strengthens Diesel
Engine Sector
161
7. Autoliv
 

 
Expands Operations Through 51% Share Purchase of
Delphi’s China Seatbelt Base;
Develops In-house Manufacturing, Reducing Costs
162
8. BorgWarner
 

 
Expands Local Production of DVTs and Turbochargers;
Makes Progress in Increasing Annual
Total Sale Revenues to 45% by 2014
163
9. Cummins
 

 
Reviews China Strategy;
Accelerates Localization of High to Low-end Parts
164
10. Eaton
 

 
Enhances Sales of Hybrid System and Supercharger;
Joins Alliance Which Aims to Disseminate EVs
165
11. Faurecia
 

 
Acquires Shares in FAW Supplier Changchun Xuyang Group;
Expands Cooperative Efforts with Local Suppliers
166
12. Federal Mogul
 

 
Plans to Begin EV Parts Development in Shanghai;
Also Focuses on After Market
167
13. Freudenberg
 

 
Increases Investments in China;
Plans to Strengthen Fuel Cell Business with SAIC, Geely, Chery
168
14. Getrag
 

 
To Localize DCT Production in 2012;
Expectations from Introduction of Electronic Drive Units
169
15. GKN
 

 
New Construction of Base in the Vicinity of Customers;
Accelerates Launch, Development for Low-cost EV,
HV Parts for Chinese Market
170
16. Michelin/Goodyear
 

 
Began 1.45 Billion USD Investment Project;
Transfer of Dalian Bases
171
17. Hella
 

 
Focus on Xiamen Large-scale Global Automotive Relay
Production Base; Aiming to Strengthen Replacement
Parts Business from 2010
172
18. JCI
 

 
Boosts Localization of Battery Production;
Plans to Upgrade Annual Production Capacity of
30 million Units by 2015
173
19. Lear
 

 
Fosters Electronic, Electrical Parts Business in China;
Expectations for Expanding EV Component Sales
174
20. Magneti Marelli
 

 
Begins Full-scale Operation of Joint Base for
AMT with SAIC; Aims to Expand in China’s
Light Vehicle Market
175
21. MAHLE
 

 
Boosts Production Eyeing Business Opportunities on
Rising Green Vehicle Demand;
Expectations for Stronger Links with Behr
176
22. MANN+HUMMEL
 

 
Aims to Sustain Double-digit Annual Growth;
Shanghai Base Becomes Operational Increase
Local Production and R&D
177
23. Tenneco
 

 
Aims to Expand Supply of Commercial Vehicle
Exhaust System Parts Through JV with FAW8
178
24. ThyssenKrupp
 

 
Contracts Body, Chassis Business While
Boosting Materials, Shaft Systems as Core Operations
179
25. TRW
 

 
Localizes EPS from 2011;
Acquires New Orders from Four Local Manufacturers
180
26. Valeo
 

 
Progesses Sell-off of Non-core Parts Bases in China;
Supplies Electronic Powertrain Systems to BAIC
181
27. Visteon
 

 
Promotes Development Localization Led by
Low-cost Products at China Bases
182
28. Wabco
 

 
Strengthens Affiliations with Local
Commercial Vehicle Makers CNHTC, FAW Jiefang;
Aims to Triple Annual Sales Revenue in 2014
183
29. ZF
 

 
Aims to Boost Total Sales Revenue
by 15 Percent in 2015;
Expands Supply to Local Affiliates with Dongfeng, Others
184
30. Aisin Group
 

 
Promotes Local Development; To Launch
Low-cost Parts Aiming to
Increase Sales to Automakers Other than Toyota
185
31. JTEKT
 

 
Aims for 110 Billion JPY Total Sales
Revenue in China by 2015; Enhances Supply System for
FAW, Other Local Manufacturers
187
32. Denso
 

 
Launches Products with Costs Halved;
Plans to Lift Sales to Chinese Automakers,
Low-cost Cars of Japanese Makers
189
33. Hitachi Group
 

 
Approaches Smart-grid Business;
Aims to Supply Batteries to Local Manufacturers
191
34. NTN
 

 
Inaugurates JV with Local Major Luoyang LYC;
Sets a Target for China Sales Revenues
of 100 billion JPY in 2015
193
35. Calsonic Kansei
 

 
Increases Production to Meet Nissan;
Localization of Development
Looks to Capture Demand for Low-cost Parts
194
36. JATCO
 

 
To Expand CVT Capacity to 730,000 Units in 2012;
Challenge in Finding Customers Apart
from Dongfeng Nissan
195
37. Sumitomo Electric
 

 
Accelerates CAPEX for Wiring Harness Operations;
To Also Enter Tire Steel Business from 2011
196
38. Takata
 

 
Steps up CAPEX in China to Capture Forecast Growth;
To Begin Operation at New Tianjin Base
in 2011 to Meet Higher Demand
197
39. Tokai Rika
 

 
Restarts Shelved CAPEX Plans in China; Expands Capacity
at Foshan Base 1.5-fold in 2010
198
40. Toyoda Gosei
 

 
Frequent Strikes in 2010; To Accelerate Capacity,
Production Expansion in 2011 of Core Products
199
41. Toyota Industries
 

 
To Make the Company’s Largest Engine Foundry;
Aims to Capture 33 Percent Share by
Lowering Compressor Costs
200
42. Toyota Boshoku
 

 
New Base in Changchun, Transfer to Chengdu to Enhance
Capacity; Progress in Joining Fabric Operations
201
43. Nidec
 

 
Sets up Business to Expand Sales of EV/HEV Motors;
Pursues New Orders from Chinese Automakers
in Inland Regions
202
44. Bridgestone
 

 
Enhances Production Development;
Launches High-mileage Tires, Accelerates Development of
Tire Recycling
203
45. Yazaki
 

 
Sets up Wiring Harness Production Base in Fujian;
Aims to Increase Business with Local Automakers
204
46. Hyundai Mobis
 

 
Boosts Parts Capacity to Meet CBU Production in China by
Hyundai-Kia Group;
Eyes Expansion to Non-affiliates
205
47. Mando
 

 
To Localize EPB Production in Beijing for Chery; 3Also
Development as Export Base to Korea, US
206
48. Hankook Tire /
  Kumho Tires

 
Both Companies Look to Ramp up Production to 30 Mn Units to Gain Higher Tire Share
207
▲Chapter Five ▲PAGE TOP

Appendix

Appendix
209
 
China
 

 
Vehicle Production/Factory Shipment by Class and Segment
(2004-2010)
210
China
 

 
Passenger Car Production/Factory Shipment by Origin and Brand
(1998-2010)
212
China
 

 
Passenger Car Production/Factory Shipment by Maker and Model
(1998-2010)
214
China
 

 
Vehicle Production/Factory Shipment by Group, Maker and Segment
(1998-2010)
230
China
 

 
Vehicle and Parts Trade (Import/Export Volume and Value) by Category,
HS Code and Item (2005-2010)
252

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