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In recent years, data from the Automotive Sub-committee of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products revealed a significant growth in China's auto exports. In 2007, the country exported over 615,000 vehicles, including spare parts and chassis with engines, marking a 79.1% increase compared to the previous year. This surge indicates a growing trend in China's automotive industry, particularly in the export of complete vehicles and CKD (Completely Knocked Down) kits.
More and more Chinese automakers are expanding their operations abroad by setting up assembly plants. Companies such as Chery, Great Wall, Zhongxing, Yutong, and Futian have already established overseas manufacturing facilities. Futian, for instance, has been exporting over 30,000 vehicles annually and plans to build new factories abroad this year. Meanwhile, foreign automakers entering the Chinese market often bring their own supply chains with them, but Chinese parts companies have yet to follow suit in building overseas factories alongside vehicle manufacturers.
This raises an important question: when will Chinese local parts suppliers be able to compete on a global scale?
The relationship between vehicle manufacturers and their component suppliers is crucial. After joint ventures between European and American automakers and Chinese companies, many international parts suppliers entered the Chinese market. Similarly, Japanese and South Korean automakers followed similar strategies. For example, Beijing Hyundai initially relied heavily on Korean suppliers, with only a few Chinese companies gradually joining the supply chain.
According to industry experts, the success of vehicle exports can drive the growth of parts and components exports. However, unlike the practices of Western and Asian counterparts, Chinese auto and parts companies tend to operate independently when expanding internationally. While some companies like Xinyi Glass and Shandong Jin Qilin Group have successfully entered the European and American markets, they did so through their own efforts, without direct support or collaboration from vehicle manufacturers.
Experts note that while the current situation looks promising, there is still a long way to go. Dong Jianping, deputy secretary-general of the China Association of Automobile Manufacturers, emphasizes that as vehicle exports grow, both automakers and parts suppliers should work together to expand globally. Fu Peizhao, from the China Electromechanical Products Import and Export Chamber of Commerce, highlights that although export volumes have increased significantly, the distribution of export products remains somewhat scattered.
Teng Bole, secretary general of the China Automotive Industry Advisory Committee, points out that the weak coordination between vehicle manufacturers and parts suppliers is a major challenge. Unlike in other countries, where the relationship between整车 (whole vehicle) and 零件 (parts) is more integrated, Chinese companies often face issues of mistrust and price competition.
Looking ahead, the government is pushing for stronger integration between vehicle and parts exports. The goal is to create strategic partnerships that allow both sides to grow together in international markets. Experts believe that the first companies to succeed will be those with strong R&D capabilities, high-quality products, and brand recognition.
Great Wall Motor, for example, has made significant progress in overseas expansion, with CKD factories in several countries. However, its spare parts production is still largely based within the group, and overseas factory construction for parts is not yet feasible. As exports continue to grow, this may change in the future.
Chery and China National Heavy Duty Truck have also shown strong performance in vehicle exports and are making progress in establishing overseas factories. With continued development, these companies are expected to play a key role in the global automotive market.
In conclusion, while China’s auto industry is on the rise, the path to global competitiveness requires better collaboration between vehicle manufacturers and parts suppliers. Only then can the full potential of China’s automotive exports be realized.