Sodium Thiosulfate,Sodium Dichloroisocyanurate,Cas 2893-78-9 Sodium Dichloroisocyanurate Tianjin Centerstar Chemical Co., LTD. , https://www.centerstarchem.com
50 Billion U.S. Dollar Orders Are Chinese Auto Parts Enterprises Ready?
Changchun, July 12 (Reporters: Lang Qiuhong, Wang Yufei) — The 3rd China Changchun International Automotive Parts and Accessories Fair recently concluded in the city, marking a significant event in the automotive industry. As part of this exhibition, the first Sino-European Auto Parts Fair was also successfully held. While the event attracted over 1,000 companies, many Chinese auto parts firms found themselves facing both opportunities and challenges amidst growing international demand for cost-effective domestic components.
According to Long Zhuo, Director of the International Exhibition Department at the CCPIT Changchun Branch, during the Sino-European Auto Parts Fair, Chinese companies signed contracts totaling $1.3 million with foreign partners. Notably, France’s Adeciance Convention and Exhibition Group signed a $500,000 investment deal with local firms like Ai Houk and Tai Wu, as well as FAW Fool and FAW Sihuan. Meanwhile, Canadian company Ribeir inked a $700,000 contract with Chinese counterparts. Although these figures are encouraging for organizers, they remain small compared to the global auto parts procurement market, which is expected to reach $50 billion by the end of 2007, with 70% directed toward Chinese suppliers.
However, despite the potential, industry experts warn that securing large orders remains difficult. Changli Fuao, an engineer at Johnson Controls Automotive Trim Systems Co., Ltd., noted that most purchases were small and sporadic. Jia Xinguang, chief analyst at the China Association of Automobile Manufacturers, emphasized that while the market is vast, the real challenge lies in competing effectively. "The United Nations has massive orders every year, but how much can China capture? The same applies to spare parts," he said.
Jiang Lei, vice president of the China Association of Automobile Manufacturers, pointed out that the domestic auto parts sector is highly fragmented, with many small-scale companies lacking the capacity for independent innovation. In 2005, the top 100 Chinese auto parts companies generated only 25.2 billion yuan in sales, far behind global giants like Bosch, whose revenue reached $49.7 billion.
Jia Xinguang further explained that international procurement demands strict adherence to quality, price, and delivery standards. "Quality must be world-class, pricing must be competitive, and delivery must be timely—often in small batches and across multiple locations," he said. Many Chinese companies still struggle to meet these requirements.
French representative Bua from Alesund highlighted that instead of seeking individual component manufacturers, his company looks for integrated module producers. If such companies aren't available, they may provide technical support to help Chinese firms establish factories in China.
With more multinational companies setting up wholly-owned operations in China, the trend is shifting from joint ventures to sole proprietorships, leading to increased profits for foreign firms. Jia Xinguang urged Chinese companies to seize this opportunity, emphasizing the need for scale, innovation, and global integration.
First, achieving mass production is crucial. While many Chinese firms produce high-quality products that meet international standards, their small-scale operations lead to higher costs and declining profit margins. The automotive industry thrives on volume, and without it, even small price differences can make or break a business.
Second, strengthening independent innovation is essential. Historically, China has underinvested in the parts industry, resulting in low-tech, labor-intensive products. To compete globally, Chinese firms must move beyond basic components and develop advanced technologies.
Finally, integrating into the global system and expanding overseas is vital. Companies must shift from relying on internal connections to building genuine international partnerships. As Jia Xinguang noted, some domestic firms still focus on "backdoor" strategies rather than true market entry.
In conclusion, while the Sino-European Auto Parts Fair highlights the growing interest in Chinese auto components, the road to international success requires more than just participation—it demands scale, innovation, and global vision.