China to have larger share in global auto parts pie
Wonder suto Technology of China, Manufacturer of auto parts has decided to enter the US market The Chinese auto parts exports have gone up 600% in last 5 years & auto business is emerging as fastest growing export business. Nearly 50% of exported auto parts are exported to the USA & balance to Japan & Europe.
There is a shift in type of goods being exported from basic goods to more value added engineering goods
The recent trend in car parts exports is led by domestic Chinese car parts manufacturers like Wonder Auto that are rapidly gaining strength and starting to enter markets around the globe.
Domestic manufacturers depend on the cheap Chinese assembly-line labour as multinationals like Delphi Automotive Systems and Visteon. But Chinese have an edge over the global giants as they can hire qualified,trained Chinese engineers and other workers whose wages are quite low comparitively.
Incresing output at car assembly plants in China is generating huge demand for car parts and creating the economies of large-scale production previously possible only in USA, Europe and Japan.
At least five or six Chinese carmakers are planning to start export in the next few years, Chinese car parts will soon be exported as part of fully assembled cars.
Multinational carmakers set the same quality standards for their operations all over the world. They are working closely with Chinese parts companies to help them meet these standards; once they do, they qualify as approved sources for sourcing the parts.
Chinese car parts have gone up in the US market as imports have declined from Japan, Canada and Malaysia ,Mexico and the European Union.
Many of these imports from China are simply replacing goods from other countries. New starters and alternators, for example, are no longer made in the US, as production has moved to Mexico, Singapore, Malaysia and now China.
Source: Business Standard
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