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In the domestic auto parts market, the lack of localized production has led to high import prices, which significantly impacts car owners when making a purchase decision. While price is certainly a major factor, consumers today are increasingly considering long-term costs, especially after-sales expenses such as spare parts. The cost of accessories has become a key concern for many buyers, influencing their choice of vehicle models.
Many cars, particularly those with advanced technology and high-end configurations, require high-quality spare parts that domestic manufacturers may not yet be able to meet. As a result, imported parts remain necessary, despite their higher costs. Although these imported components ensure better quality and lower failure rates, the price differences between brands and models can be substantial—sometimes even several times higher for the same part.
This discrepancy highlights a major issue: the low level of localization in the auto parts industry. Most joint-venture companies rely on KD (knock-down) production, which involves importing parts and assembling them locally. While this method allows for rapid production growth, it also creates challenges when demand for after-sales parts increases. Manufacturers often struggle to establish a comprehensive spare parts supply system quickly, leading to continued reliance on imports.
During the import process, multiple layers of markups increase the final price, which is ultimately passed on to consumers. As a result, the pricing of spare parts has become a crucial consideration when choosing a car model.
According to Chang Kai Kai, a franchise store owner, improving the localization rate of auto parts can give manufacturers a competitive edge. Many automakers now have affiliated companies that produce automotive components. These suppliers typically serve three main channels: directly supplying car manufacturers for assembly, providing parts to the aftermarket and dealers, and offering specialized services through 4S stations.
This centralized approach helps maintain quality and consistency, but it also makes it harder for car owners to question the high prices of spare parts. Even if a customer disputes a price, if the dealer provides an explanation, they often have no choice but to accept it.
Efforts to increase local production can significantly reduce per-unit costs, making parts more affordable. A good example is a popular Chinese economy sedan, which has achieved competitive spare parts pricing thanks to large-scale production and localization strategies. This model demonstrates how focusing on after-sales service and localization can enhance consumer satisfaction.
As consumers become more aware of the total cost of ownership, the price of repair parts is becoming more important than ever. In the past, saving a few hundred dollars on parts might have been significant, but today, for a car priced around 100,000 yuan, even a few thousand yuan can make a big difference. Consumers now expect spare parts to be priced similarly to the vehicle itself.
Improving the overall strength of China's auto parts industry is essential for the development of independent automotive brands. Despite years of growth, the industry still faces challenges in self-research and development. As one industry leader pointed out, enhancing the capabilities of domestic spare parts suppliers is a prerequisite for building strong national brands.
China’s home appliance industry offers a useful example. Its success stems from a strong, autonomous spare parts sector that overcame technical barriers and became globally competitive. Similarly, the auto parts industry in China has the potential to grow into a major global supplier.
Currently, accepting foreign investment and allowing international parts companies to operate in China is essential. Their presence can help improve the overall quality and efficiency of the domestic industry. While reliance on external resources is inevitable, the core of sustainable development lies in the R&D capabilities and determination of local companies.
After all, the automotive industry is a complex system that requires collaboration across the entire supply chain. Only by working together can the industry achieve long-term growth and competitiveness.