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The domestic auto parts market is facing a challenge where imported parts are often more expensive, yet car owners consider not only the price but also brand and quality when purchasing vehicles. However, after buying a car, the cost of maintenance and spare parts has become a significant concern for many consumers. This is especially true for high-tech cars with advanced configurations, which require high-quality spare parts to maintain performance and safety. In some cases, locally produced parts fail to meet these standards, making imports necessary despite the higher costs.
Despite the premium on imported parts, their quality is generally superior, leading to fewer replacements and long-term savings. However, there's a noticeable disparity in pricing among different manufacturers' parts, with the same component costing several times more depending on the brand or model. This inconsistency highlights the low level of localization in the auto parts industry. Many joint-venture companies rely on KD (knock-down) production, which involves importing components and assembling them locally. While this helps boost production quickly, it creates challenges when demand for after-sales parts increases. Manufacturers often struggle to build an efficient spare parts system in the short term, forcing them to continue relying on imports.
As a result, prices increase at multiple stages—during import, distribution, and retail—before finally reaching the consumer. This has led many car buyers to factor in the cost of spare parts when choosing a vehicle model. To address this issue, increasing the localization rate of auto parts can offer a competitive price advantage. Some manufacturers have already taken steps in this direction, establishing supporting enterprises that supply parts directly to original equipment manufacturers, aftermarket dealers, and 4S service centers. This not only ensures consistency in quality but also reduces the likelihood of disputes over high part prices.
For example, an economical sedan in China has successfully implemented a localization strategy, achieving cost reductions through large-scale production and localized sourcing. As the number of vehicles on the road grows, so does the importance of affordable spare parts. Consumers today are more aware of the total cost of ownership, and they expect repair parts to be reasonably priced. A few thousand yuan may seem small compared to the overall value of a car, but it still represents a significant portion of the total cost.
To truly improve the competitiveness of the domestic auto industry, it’s essential to enhance the R&D capabilities of local parts manufacturers. The Chinese auto industry has grown significantly over the past two decades, building a solid foundation and considerable scale. However, developing independent brands and self-reliant technology remains a key challenge. Industry leaders emphasize that improving the strength of the domestic spare parts sector is a prerequisite for the development of national brands.
This situation mirrors the success of China’s home appliance industry, where strong domestic spare parts manufacturing and breakthroughs in key technologies have enabled self-developed products to compete globally. Experts believe that China’s auto parts industry will not only survive but also grow into a major global supplier. To achieve this, foreign investment and collaboration must be embraced, as international parts companies bring expertise and scale that can help elevate the entire industry.
While the low localization rate of auto parts is a current bottleneck, it’s important to recognize that global collaboration and procurement are now standard practice. Even with external support, the core of development lies in the R&D capabilities and determination of domestic companies. After all, the automotive industry is a complex system that requires the participation of parts manufacturers at every stage. By strengthening this ecosystem, China can move closer to becoming a leader in the global auto industry.