No Recession for Chinese Auto Part Exports
Seemingly oblivious to the the global slowdown, Chinese auto parts industry picks up more steam. By Bertel Schmitt, CEO Sinamotive Group (HK) Limited.
Despite the global slowdown, the Chinese auto parts industry powers ahead. In the first seven months of 2008, the value of China’s auto-parts exports grew by 34.9% year on year (y/y) to $8.88 billion, China’s Customs Bureau said >.
China exported $ 8.73 billion worth of auto-parts from January to July 2008.
Foreign invested companies and joint ventures exported $4.56 billion auto-parts, up 31.6% y/y, accounting for 51.4% of the total.
The three major destination markets of China-made auto parts are the U.S., EU and Japan. Parts for $2.69 billion ( 8.8%) were sold to the U.S.A., parts for $1.6 billion ( 39.2%) were sold to the EU, and parts for $1 billion ( 36.8%) were shipped to Japan. These three markets contributed 59.6% to the total value of China’s Jan-Jul auto-parts exports.
This validates the previous predictions made by our company:
1.) The parts market, especially when targeted at after sales, is recession-proof.
2.) More and more Chinese parts go to Europe. Export growth to the U.S.A. is diminishing.
3.) The most powerful drivers of this growth are foreign companies.
4.) Falling raw material prices and sinking shipping costs give reason to expect further sales increases, especially to the after sales sector. The OEM segment may also absorb even more Chinese parts. More and more auto makers aim to off-set their lower sales with lower cost parts, sourced in China.
