Chinese Auto Parts Industry Surprises with 34.9% Growth
Immune to the global slowdown, Chinese auto parts industry delivers record numbers. By Bertel Schmitt, CEO Sinamotive Group (HK) Limited.
While markets all over the world tank, while auto maker flirt with bankruptcy, the Chinese auto parts industry goes full steam ahead. In the first seven months of 2008, China’s auto-parts exports skyrocketed by 34.9% year on year (y/y) to $8.88 billion, says a report released by China’s Customs Bureau
China exported $ 8.73 billion worth of auto-parts from January to July 2008.
Foreign invested companies and joint ventures exported $4.56 billion auto-parts, up 31.6% y/y, accounting for 51.4% of the total.
The three major destination markets of China-made auto parts are the U.S., EU and Japan. Parts for $2.69 billion ( 8.8%) were sold to the U.S.A., parts for $1.6 billion ( 39.2%) were sold to the EU, and parts for $1 billion ( 36.8%) were shipped to Japan. These three markets contributed 59.6% to the total value of China’s Jan-Jul auto-parts exports.
This validates the predictions made by our company in previous months:
1.) The parts market is recession-proof. Especially when targeted at after sales. People hang on longer to their cars. Wear and tear results in more parts bought.
2.) After diminishing growth in the U.S.A., more and more Chinese parts go to Europe.
3.) The most powerful drivers of this growth are foreign companies.
4.) Falling raw material prices and sinking shipping costs give reason to expect further sales increases, especially to the after sales sector. The OEM segment may also absorb even more Chinese parts. More and more auto makers aim to off-set their lower sales with lower cost parts, sourced in China.
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