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Automobile parts makers make hay in downturn
While China's vehicle exports were severely battered by the global economic downturn, its automobile parts suppliers have been faring well in overseas markets.
According to Customs figures, in the first four months, while China's vehicles exports continued to fall, auto parts exports showed some signs of recovery.
China exported auto parts valued at $3.08 billion in the first four months, down 36.7 percent year-on-year.
However, in March and April, after seven consecutive months of drop, the export figures began to rebound.
In March, China exported 161,200 engines, 37.55 percent more than in February, and delivered auto accessories and bodyworks overseas with total value of $1.05 billion, up 59.92 percent from the previous month.
In April, although China exported 33 percent less parts over last year, the figure grew by 9.8 percent from March.
"The collapse of US auto giants will impact OEM (original equipment manufacture) parts makers, but won't affect the companies like us which mainly supply auto parts in the retail market" said Zhou Jiaru, board chairman of Wenzhou Guansheng Group, one of the biggest auto parts suppliers in Zhejiang province.
As an enterprise that set up a distribution network six years ago in the US, by mainly providing parts in the retail market, Guansheng is expanding its network in the country by taking advantage of the industry slowdown.
"We are recruiting local salespeople when the US players are cutting headcount"said Zhou.
"New vehicles sales in Western countries have declined sharply amid the global financial crisis. The consumers there prefer to maintain their existing cars by replacing parts and this has definitely boosted the after-sales parts market" said Rao Da, secretary-general of the China Passenger Car Association.
"Moreover, while some parts makers in North America and Europe close down, international automakers have to find new parts suppliers in low cost manufacturing regions to make up for the deficit in profits," said Rao.
According to a recent research report by A.T. Kearney, a global management consulting firm, more than half of the auto parts suppliers in the US may file for bankruptcy protection this year, with 70 percent facing bankruptcy and restructuring.
United Securities Co said in its industry report released on June 9 that foreign automakers' plans to seek high-quality but low-price auto parts provides Chinese parts makers many opportunities in the overseas markets.
"Chinese auto parts suppliers are expected to boost their market share in global market due to the industry retreat" said the report.
On the other hand, "as more and more international parts manufacturers follow their OEM partners to China, they will help our local parts industry improve and upgrade the technologies" said Rao.
However, analysts also warn that Chinese parts makers need to improve their own capability through industry reforms and restructuring to weather the international competition in light of this opportunity.
Statistics from the China Federation of Industrial Economics show that in China, only six auto parts suppliers posted annual sales revenue of over $1 billion, whereas 50 enterprises had revenue of over $50 million.
"The financial crisis provides another opportunity to rid the industry of small players with low capacity" said Professor Zheng Haihang with Capital University of Economics and Business.
News origin at China Daily.
Schaeffler is seeking for investors in China
Schaeffler Group negotiates with the Beijing local authority reported German news magazin "Wirtschafts Woche". They might take Delphi as an example. In April a group of Beijing local authority, state owned steel company Capital Iron & Steel and a Chinese privat investor bought shares of the Delphi group, which was seperated from General Motors (GM).
Schaeffler, suffering from overtaking Continental, could solve their financial problems and China profits from the know-how. "We always said that we talk with our potential investors" said a Schaeffler spokesman to "Wirtschafts Woche".
Schaeffler runs an research and development center near Shanghai and five factories in China. There are more than 3000 employees in China.
News origin at Wirtschafts Woche (German).
Inergy sets up new plants in Asia
Inergy Automotive Systems is building two new fuel systems plants in Asia, one in Beijing, China and another one in Chennai India. In July 2010 the Beijing plant starts supplying parts to Hyundai.
In 2008 Inergy Automotive Systems began production in Wuhan (China, Hebei province). This facility provides fuel systems for local Nissan and BMW plants. This year it will begin delivering supplies to PSA.
Inergy Automotive Systems was founded in 2000 as a joint venture combining the plastic Fuel Systems operations of Plastic Omnium and Solvay S.A. Today, the company is the leading Tier One supplier of plastic Fuel Systems to the major car manufacturers. Headquartered in Paris, France, Inergy Automotive Systems employs approximately 4,500 people worldwide and operates 24 manufacturing facilities in 17 countries. Inergy Automotive Systems remains at the forefront of pioneering technology which is a major factor in its competitiveness, pride and success.
See full article at AutomotiveWorld.com.
Berrang goes China
German specialist for fasteners and connections, Karl Berrang GmbH, opened his China subsidery. After USA and France Berrang started operation in Shanghai with the new founded "Berrang Trading (Shanghai) Co., Ltd.".
The opening ceremony was hold these days and Bernhard Berrang said "we are ready to take our chances in China". With Werner Berneis a China experienced leader will manage the operative business in China to offer best services to the customers. Main purpose is the direct contact and to ensure the high quality to the customers.
Following their clients "Heidelberger Druckmaschinen" und "Keiper" Berrang will build up new relations to Chinese suppliers and their parts might later also be used outside China. Besides Automotive Mannheimer Karl Berrang GmbH is supplier for a wide range of industries like electronics technology, mechanical engineering, aerospace and others.
See German news origin.
"If they (Chinese automakers) do it in Europe, they can do it everywhere"
The world financial crisis has hit western countries hard, now it's giving some traction in Europe to China's homegrown auto brands.
"If they (Chinese automakers) do it in Europe, they can do it everywhere" said Hans-Ulrich Sachs, managing director of HSO Motors Europe, sales agent for China's Brilliance Jinbei Automobile Co Ltd in Germany.
"I believe Chinese auto brands will have a shorter journey to go than their Japanese and Korean counterparts did decades ago" said Detthold Aden, president and CEO of BLG Automobile Logistics, Germany's biggest logistics company, which is based in the northern port city Bremen.
According to Aden the financial crisis, which makes smaller and cheaper cars popular, provides Chinese medium- and low-end vehicles the best opportunity in Europe.
German governments subsidies of 2,500 euros for every vehicle older than nine years old buying a new one, called "Abwrackpraemie", let the sales of smaller cars increase already.
"It is (a chance for) a niche market for Chinese auto brands" said Aden. Tong Zhiyuan, president of China's Huatai Automobile Group, agrees with Aden. "It's an opportunity for Chinese cars to enter Europe when local markets cry out for small cars with low prices and good performance." Tong added that by starting in the small car segment, Chinese carmakers can escape a face-down with But Europe's high standards for security, the environment, styling, safety and performance are major hurdles for Chinese carmakers. "They will have to cooperate with local industry players," said BLG's sales and marketing director Michael Bünning.
See full article at China Daily origin.
Berrang goes China
German specialist for fasteners and connections, Karl Berrang GmbH, opened his China subsidery. After USA and France Berrang started operation in Shanghai with the new founded "Berrang Trading (Shanghai) Co., Ltd.".
The opening ceremony was hold these days and Bernhard Berrang said "we are ready to take our chances in China". With Werner Berneis a China experienced leader will manage the operative business in China to offer best services to the customers. Main purpose is the direct contact and to ensure the high quality to the customers.
Following their clients "Heidelberger Druckmaschinen" und "Keiper" Berrang will build up new relations to Chinese suppliers and their parts might later also be used outside China. Besides Automotive Mannheimer Karl Berrang GmbH is supplier for a wide range of industries like electronics technology, mechanical engineering, aerospace and others.
See German news origin.
J.D. Power released news about their study of "New-Vehicle Purchase Intenders in China"
According to the 2009 China New Vehicle Intender Study released by J.D. Power Asia Pacific, exterior styling is of primary importance in capturing new-vehicle purchase intenders in China. "The first step in engaging new-vehicle purchase intenders in China is to appeal to their eyes" said the general manager of research at J.D. Power Asia Pacific, Dr. Mei Songlin in Shanghai.
With 23 % exterior styling is the most important factor for new-vehicle purchase intenders considering to purchase a new vehicle, followed by seating comfort (19%) and fuel economy (17%).
Another result of the study is that Audi, BMW and Shanghai Volkswagen have particularly high brand awareness, with more than 85 percent of intenders answered that they have heard of these brands.
Considerating a specific brand, the study finds that new-vehicle intenders in China are more likely to consider international brands than Chinese brands. Audi, BMW and Guangzhou Honda get the highest rates among 45 vehicle brands examined in the study, within the Chinese brands BYD, Chery and Roewe reached high consideration rates, but lower than the interantional brands.
The study also shows that the internet is the most widely used information source among intenders, with 85 percent saying they do online research about vehicles before buying. The most common way is to search for consumer reviews and reliability ratings. Auto shows with 53 %, automotive magazines with 52 % and television with 49 % are used by half of the queried.
Read J.D. Powers press release
New FAW die-making plant in Changchun
Chinese news agency Xinhua reported FAW's "Die Manufacturing Co., Ltd." recently broke ground for building a new plant in Changchun, north-east China, which is scheduled for completion in June 2010 and will be a modernized stamping and welding center.
The new factory will have an annual production capacity of 400 stamping die sets, 3.5 million medium- and large-size stamping auto-parts, 2.2 million small stamping auto-parts, and 900 welding holders.
About 90% of the auto-parts are die-manufactured, die-manufacturing technology is one of the core competitive edges of automakers said Qin Huanming, vice general manager of FAW Group and chairman of Die Manufacturing Co., Ltd. The new plant is built to meet the needs of creating new brands, making high-end products and boosting the RD capability as well as the corporate competitiveness of FAW through their own subsidiary "Die Manufacturing Co., Ltd." .
News origin at Gasgoo.com
BASF sees potential in China's auto market
BASF sees the Chinese automotive sector is growing and offers potential to their business. BASF believes they can help Chinese car makers to increase their quality and save cost with innovative engineering products.
BASF Groups vice president Hermann Althoff says "We are actively contacting and staying in dialogue with Chinese car makers - the Shanghai Automotive Industry Corp., First Automobile Works, Cherry, just to name a few - and their Tier 1 suppliers". Following example from Mr. Anthoff illustrates the potential of the Chinese market: In Europe, car makers use about 20 kg nylon, while in China only 5-6 kg are used. The global crisis is also giving a strong push for Chinese companies to strive for innovation. Anthoff said the India market for engineering resin is catching up, but the size remains much smaller than China.
"It is a time when customers really need to differentiate themselves from competitors." Althoff said to Plastics News at the Chinaplas show in Guangzhou, some customers are accelerating critical projects in order to launch new products even faster than before.
News origin at Plastic News
Ford Asia executives move from Thailand to China
As Detroit Newspaper reported the Ford Motor Inc. will move the asia headquarter to Shanghai. Key operations and ASEAN Headquarter will remain in Bangkok but "Our leadership team, with supporting corporate functions, will be moving to China" said Ford spokeswoman Whitney Foard Small. "We will be moving functions and expertise to locations that best meet our business needs" she said, which makes sence as China is about to overtake the USA as largest market for passanger cars and trucks.
News origin at Xinhua
Webasto Sunroofs boosts production capacity in China with two new facilities
Two new facilities in Shanghai and Changchun will boost Webasto's total production capacity in China to 2 million sets a year. Webasto Sunroofs Inc is one of the world's leading suppliers of sunroofs and parking heaters for passenger cars such as BMW 6er, VW EOS and Cadillac.
The five WFOE in China sold more than 1.2 million sets of auto sunroofs to almost all major OEMs in China such as Benz, FAW Volkswagen Automobile Co., Shanghai Volkswagen Co., Shanghai GM Corp, Shanghai Automotive Corporation (SAIC), FAW Group Corp, Chery Automobile Co and others. From the headquarter in Munich, Germany Werbasto Sunroofs Inc. manage about 6,500 employees worldwide and hold about 60 percent of Chinas auto sunroof market.
Webasto Sunroofs Inc. in the internet.
China cities will see more british Alfred Hitchcock's movie cars
Reuters UK reports that Geely Automobile Holding and the british partner Manganese Bronze Holding plan to sell one thousand of this black cabs in China.
The TX4 model, produced near Shanghai, has already been orderd more than 200 times. Geelys Jinliang Lau, general manager of sales department, said "Our customers are mostly wealthy people buying the cab for their loved ones. Driving a classic black cab can attract a lot of eyeballs. There aren't many out there in the streets [...] We have 30 black cabs in service in Beijing since the Olympics and they are quite popular among local residents".
Apart from selling black cabs to hotels and wealthy private owners, Geely is also lobbying local government and taxi operators in major cities all over the country. "We are in talks with other cities, mostly provincial capitals, and would hopefully get the cab in cities such as Lanzhou and Chengdu before the end of the year" said Lau.
Both, Geely Automobile Holding and UK Manganese Bronze Holding, profit from this deal. ""We have been making cheap cars for 10 years. But we started to change our strategy since mid-2007. Like our chairman Li Shufu had said, we now want to make the best, safest and most environmentally-friendly cars" said Lau. Because of the high manufacturing costs in the UK the oversea success was limited for this car, the 53 million pound deal with gives Geely Geely 52 percent of their Shanghai venture and a 23 percent stake in Manganese Bronze. The British side has 48 percent of the venture and keeps all rights to sell black cabs outside Asia.
Read the full english article at Reuters
Honda increases production and sales network in China
According to a Gasgoo report Honda also increase their production and sales network in China as 'Sankei shinbun' said to Japanese Media, following the "booming" demand.
Thirty more dealers should sell Honda passenger cars in China which means a total of 700. The production capacity will be increased 8.5 % compared to the year 2008 and will reach 510,000 units in 2009.
Guangzhou Honda Automobile Co., a car-making joint venture with Guangzhou Automobile Group, will rise up to 330,000 and Dongfeng Honda Automobile Co., a joint venture with Dongfeng Motor Group Co, will rise to 180,000 vehicles this year.
In the first five month of 2009 Honda already sold 4.5 % more cars than in 2008.
Read full english article at Gasgoo.com
Toyota Tsusho to expand China dealer network
Toyota Tsusho Corp is Japan's sixth-biggest trading company. As an affiliate of Toyota Motor Corp they planned to increase its Toyota dealerships in China and follow the strong demand. "We plan to increase our dealerships, some through mergers and acquisitions, in China to keep pace with the strong demand growth there," said Junzo Shimizu, president and CEO of Toyota Tsusho, in an interview to Reuters.
Mainly in inland China its planned to increase the dealer network to around 50 within four to five years.
"Global demand for cars will stay at around 70 percent of its peak in the next several years," Shimizu said.
Read full english article at Reuters
Chinas government now also purchase BMW as governmental cars
BMW follows Audi and Merceds on to the purchase list of Chinese government. A BMW police car was presented on May 19, 2009 China (Beijing) International Exhibition on Police Equipment and Anti-Terrorism Technology.
Read full english article on China Daily
China is blocking imports of Renault cars due to safety problems
The Chinese National Bureau of Quality Inspection gave order to stop the import of Renault passenger cars Laguna, Scenery and Megane. According to the Quality Inspection Bureau there are hidden saftey problems, security quality problems have already been noticed in the past. France Renault should inspect all cars exported to China as the problems are a risk for Chinese citizens reported the Xinhua News web.
According to Reuters Renault is surprised by the security problems as the cars exported to China fulfill the same saftey requirements as all other Renault cars exported to other countries. As Renault sold only 900 cars in China in 2008, the Chinese market is less important to the French automaker.
Later a Renault spokesman confirmed that the company had identified problems on around 160 vehicles. The problems were not related to the manufacturing but to transportation and storage.
English Reuters article:
http://www.reuters.com/article/rbssAutoTruckManufacturers/idUSLA103623620090610
German Reuters article:
http://de.reuters.com/article/companiesNews/idDEBEE5590HH20090610
Chinese Xinhua article:
http://www.yn.xinhuanet.com/auto/2009-06/11/content_16779216.htm
SINOC Automotive Technology starts new website
New webdesign was lunched after Chinese New Year 2009. SINOC Automotive has now a new website design and also an independent address www.sinoc-automotive.com. The new address and design brings us closer to our clients. The website is available in English and German, Chinese version is coming soon.
Happy New Year!
We wish all our customers and suppliers a happy and successfully 2009. SINOC likes to thank all our customers and suppliers for their trust and good cooperation in 2008. Especially in times of global economically and financially difficulties we will work harder for the success of our customers and support them in all their concerns.
China International Auto Parts Exhibition Beijing
CIAPE, held by the Chinese Government, is an access to Chinese market. CIAPE opens a window for both Chinese and international automobile and auto parts industries by introducing their development level and trend of growth.
Chinas Auto Industry will face hard times in 2009
After maintaining double-digit growth since 2006, passenger vehicle sales started shrinking right after the Olympic Games this summer. Total sales dropped 2 percent year-on-year in the month, according to official statistics. Only joint ventures of international automakers and major state-owned Chinese auto manufacturers are still profitable, although their profit is also shrinking. However small automakers like Chery Automobile Co., Geely Automobile Holdings Co., BYD Auto Co., and Great Wall Motor Co are very likely at risk. Their revenue lies partially in heavy dependence on exports to Middle East, Africa, Southeast Asia, Russia and South America for profits. If the world economy slides into a year of regression and even depression then car sales will also shrink. Geely has already cut its export target for this year to 40,000 cars from 60,000 says Gasgoo. Auto giants like FAW, and Dongfeng can't fulfill their sales target this year. A take-over of a large overseas automaker would not fit Chinese automaker now. Besides, SAIC has bought a lot of loss-making foreign assets such as MG, and Ssangyong, both being great burdens for the Chinese automaker now. Chinese car makers are hoping for financial help from the government but until now the $585 billion stimulus package didn’t pay much attention to the car makers. Therefore many analysts expect in 2009 a harsh competition, some M&A and even bankruptcy of OEMs in China.
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