Bosch, a leading German auto parts supplier, is aiming to triple its sales in Asia by 2015, with annual revenue exceeding €7 billion this year. This ambitious target reflects the company’s confidence in the region's growing economic potential and its commitment to expanding its presence in key Asian markets. At the opening of its Seoul branch, Bosch Group Manager Fahrenheit Bach emphasized that the company expects to generate over 22 billion yuan in profits from Asia, which he described as the world’s most dynamic economic growth area. Bosch has also announced plans to invest heavily in infrastructure across China, India, Thailand, and other Asian countries.
Meanwhile, Delphi Corporation, another major automotive supplier, has taken similar steps by announcing a new plant in Suzhou, China, to produce 550,000 air-conditioning compressors annually. The company has already invested more than $500 million in the Chinese market, signaling its long-term commitment to the region.
However, this aggressive expansion by multinational corporations is putting pressure on local Chinese auto parts companies. Zhang Boshun, secretary-general of the SAIC Committee’s Market and Trade Commission, warned that the growing dominance of foreign players could squeeze the market for domestic firms. He urged Chinese auto companies to take greater responsibility for developing their own parts suppliers and to build collaborative "zero-to-zero" relationships that promote mutual growth.
Zhang also pointed out that the investment in China’s auto parts industry remains significantly lower than in developed countries. While foreign auto parts companies typically invest 1.2–1.5 times the amount spent on vehicle production, Chinese firms only invest below 0.3 times. In terms of R&D spending, Chinese auto parts companies allocate just 1–1.5% of their revenue, compared to 3–5% in developed nations and even up to 10% in some cases.
Zheng Xinli, deputy director of the Central Policy Research Office, stressed the importance of controlling key components internally. He suggested that vehicle manufacturers should develop their own parts subsidiaries and adopt a holding model. Chery was cited as a successful example, with over 30 controlled parts companies and advanced technologies such as independently developed engines and six-speed automatic transmissions.
In addition, the production and supply methods of Chinese auto parts companies still lag behind global standards. While companies like Delphi have adopted modular and “ready-to-install†assembly systems, China’s industry is still in the early stages of this transformation. Global auto manufacturers are shifting toward purchasing from fewer system suppliers and adopting global sourcing strategies, which has led to a more centralized supply chain structure.
Wanxiang Group, China’s largest auto parts manufacturer, has taken significant steps toward international integration by acquiring AI Corporation, a U.S.-based supplier serving GM, Ford, and Chrysler. This move has expanded Wanxiang’s presence in the U.S. and increased its overseas sales to around 6 billion yuan. According to Lu Guanqiu, chairman of Wanxiang, the acquisition allowed the company to integrate into the core of the global automotive supply chain, securing access to key technologies, procurement networks, and talent.
Despite these efforts, China’s auto parts industry still faces challenges, including a lack of scale and fragmented operations. With over 5,000 large-scale parts companies, only about 15% generate monthly sales above 50 million yuan. Zhang Boshun emphasized that without scale, it will be difficult for many companies to compete globally. He called for faster mergers and reorganizations to strengthen the industry and align it with the needs of full vehicle manufacturers.
Analysts from Han Ding Century Consulting believe that joint automobile manufacturing initiatives can help form regional clusters, promoting collaboration and efficiency. Examples include the Dongfeng Motor Industry Cluster and the Shenlong Group. Additionally, cross-industry mergers—such as steel companies acquiring auto parts firms—are expected to become more common in the future.
Zheng Xinli also highlighted that in developed countries, the parts industry often operates independently of整车 (complete vehicle) production. Some countries do not manufacture vehicles but have highly developed parts industries. He advised some sluggish Chinese vehicle companies to consider shifting their focus to parts production instead.
Overall, the Chinese auto parts industry is at a critical juncture, with both challenges and opportunities ahead. By embracing innovation, scaling up operations, and forming strategic partnerships, Chinese companies can better position themselves in the global automotive landscape.
Nitrogen PSA Generator
N2 PSA Generator System for General Industry,Nitrogen Generator for Chemical Process,Low Investment Gas Production PSA N2 Generator
Suzhou Xinrui Purification Equipment Co.,Ltd , https://www.gas-equipment.net