The prediction of the auto parts market that is open to new business models

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PR Newswire-PR Newswire Berkeley, California, May 4th 2003 was an extraordinary year for the Chinese automotive market. Compared with the previous year, the output of Chinese cars increased by 80% in 2003, and domestic car sales surged by nearly 70%. In 2003, the total number of cars and parts imported into China increased by 86% compared with 2002. Today, China’s car sales rank third in the world, and car production ranks fourth.


Demand drives the growth of auto parts market

The increase in sales is leading to a corresponding increase in demand for OEM (original equipment manufacturers) and after-sales service markets. Nowadays, Chinese auto parts manufacturers can both sell in their domestic markets and export to foreign countries, and many companies have thus obtained competitive advantages.

Differentiation

The market environment in which Chinese auto parts manufacturers are located is rapidly changing. At present, there are about 57 small car parts manufacturers, accounting for 45% of the industry's share. Among them, 10 are state-owned enterprises, 22 are joint-stock companies, 10 are private companies, and 15 are joint ventures. This not only means that foreign auto parts manufacturers who are looking for suppliers now have a wide variety of flexible and world-class resources to choose from, but also reflect that the country’s investment in the industry is decreasing and the auto industry is facing different directions. The business model opens its doors.

policy

China is becoming a major manufacturing center for auto parts. There is no sign of slowing down. At the same time, the reduction in import tax rates for components further supported this trend. The halving of tariffs also creates favorable conditions for accelerating the development of this industry sector. By 2006, the average tariff rate will drop to 10%.

New business opportunities

Rapid growth, differentiation, and aggressive government policies have created a period of great opportunity for auto parts makers to enter the Chinese market through acquisitions, joint ventures, or direct investments.