Rapidly growing multinational component giant accelerates into China 1
The rapid expansion of multinational automotive component giants into China has been nothing short of explosive. While numerous indicators suggest that the Chinese auto industry is experiencing significant growth, a closer look reveals that the pace at which foreign capital is entering the market is even more astonishing. At a recent automotive industry seminar, experts highlighted that as the Chinese auto market continues to boom, the rate at which foreign parts companies are setting up operations in the country is increasing at an unprecedented speed. This year alone, the number of foreign-funded joint-venture parts companies has nearly doubled compared to last year.
On September 1 this year, Visteon, a globally renowned auto parts supplier, announced in Yokohama, Japan, that its Asia-Pacific headquarters would be relocated to Shanghai, China. The company stated that this move was aimed at enhancing its regional customer support capabilities. Later, on November 8, Japan’s Denso, the fourth-largest auto parts company in the world, announced the establishment of "Tianjin Foo Electric Installation Air Conditioning Co., Ltd." in collaboration with China FAW Group's Fu Ao division. This new plant, set to begin production in February 2005, will specialize in car air-conditioning systems, marking Denso’s ninth production base in China.
In the past one or two years, as the Chinese auto industry has grown rapidly, foreign parts companies have been advancing into the country at an accelerated pace. Given that approximately 70% of the value added in the automotive industry comes from parts and components, their quality directly impacts the profitability of the entire sector. Therefore, the parts and components industry plays a crucial role in shaping the future of the automotive landscape.
When analyzing the future of the auto industry, it is clear that vehicle manufacturers and their suppliers must work hand-in-hand. As global automakers enter China, so do their associated parts suppliers. For instance, in the U.S., Delphi supplies General Motors, while Visteon is Ford’s largest supplier. In Germany, Bosch serves Volkswagen, and in Japan, Toyota has its own major component manufacturer. Similarly, PSA Group in France maintains a stable supply chain.
Visteon, the second-largest auto parts supplier globally, became independent from Ford Motor Company in June 2000 and is now a Fortune 500 company. In 1994, SAIC and Visteon formed a joint venture, Yanfeng Visteon Automotive Trim Systems, marking one of the first steps for many foreign investors entering China. Today, this 50-50 joint venture operates in Shanghai, Chongqing, and other locations, supplying products to major automakers such as Shanghai Volkswagen, FAW-Volkswagen, and Beijing Hyundai.
As the former president of Yanfeng Visteon, Tayyig, who now leads Changan Ford, remains optimistic about the future of China’s parts market. He emphasizes that the parts industry will play a key role in China’s automotive future and stresses the importance of cultivating local talent to ensure long-term success.
Bosch, the world’s second-largest auto parts manufacturer, has built a nationwide distribution network in China with over 150 after-sales service stations. ArvinMeritor, another top 500 U.S. auto parts company, has established three joint ventures in China to support domestic automakers like Shanghai GM, FAW Group, and Volvo.
Currently, nearly 500 foreign-invested parts companies operate in China, with most of the world’s leading auto parts firms having either joint ventures or wholly-owned subsidiaries. With car prices significantly higher in China than abroad, the Chinese market has become one of the most profitable regions for global manufacturers.
Delphi Automotive Systems, the world’s largest auto parts manufacturer, has invested over $400 million in 13 joint ventures and wholly-owned companies in China, including a technology and training center. Its sales in China have reached nearly $500 million, with one-third of its products exported. Despite a slight decline in global sales in 2000, Delphi’s Chinese market has shown consistent growth, with annual sales increasing by over 10% in recent years.
Batumberg, CEO of Delphi, stated, “The entire vehicle companies around the world are coming to China to establish bases, and Delphi will undoubtedly consider this its ‘main battlefield.’†Recently, when General Motors faced issues with its joint venture partner Wuling Spark, it sought Delphi’s help to stop supplying parts to Chery. However, Delphi chose to continue its partnership with Chery, reinforcing its commitment to the Chinese market.
Multinational giants are expanding their presence across China. Reports indicate that as early as March last year, Nissan and Dongfeng were already preparing for deeper collaboration. A team from the Japanese Auto Parts Industry Association, led by Masahiro Ohno, visited Hubei Province to explore opportunities. After the merger of Dongfeng and Nissan, previously affiliated parts companies moved to mainland China to compete in the newly emerging $320 million Dongfeng Auto Parts market.
88 Keys Acoustic Piano,Black Matte Upright Piano,yamaha p45
Masonhanlin Musicalinstrument Co. LTD, , https://www.meiseninstrument.com