Auto suppliers sharpening China focus

Global parts suppliers to the automotive industry are focusing most of their attention on China, reported SupplierBusiness, an IHS Global Insight company. The report (July 5, 2010) noted that, “Faurecia, ZF Friedrichshafen, GKN and Trelleborg announced expansion plans in China and Continental and Federal-Mogul cited improved prospects in the country.”

In addition, Continental reported that it is increasing its forecast for the year on the strength of a surprisingly strong rebound in the global automotive industry, “particularly in China.”

According to SupplierBusiness, China passed the U.S. last year as the world’s number-one auto market, and auto sales in the country are expected to keep climbing—rising a probable 20% this year to 16.5 million cars and trucks. “Foreign automakers have built plants in the country to handle the local demand and foreign suppliers can’t seem to move fast enough to support them,” the report noted. “And increasingly aftermarket opportunities are being pursued by parts makers.”

French supplier Faurecia plants to buy an 18.75% stake in Xuyang Group, one of the main suppliers to state-owned Chinese automaker FAW Group. SupplierBusiness reported that the agreement will extend Faurecia’s product range to complete seats, interior systems, stereos and interior trim, and the company expects annual sales of about €1.7 billion in China by 2014.

German supplier AF Friedrichshafen has opened a 33,000-ft2, $25 million technical center and headquarters in Shanghai, and is counting on the success of its customers Volkswagen, Daimler, and BMW in China to boost sales of its driveline and chassis systems.

Sweden’s Trelleborg Automotive has said it will build a research center in Shanghai to engineer noise- and vibration-dampening components.

The Chinese market is good for these automotive components and systems suppliers, noted the report, who have no trouble finding customers.

GM announced that it will be the first global automaker to see more than 2 million vehicles in China this year and GM’s first-half sales in China passed the company’s U.S. sales for the first time. [email protected]


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