These are exciting times for the automotive industry in China. The country recently overtook the United States to become the world’s largest car market and shows no signs of slowing down. As more and more Chinese enter the middle class, their demands for mobility increases. As a result, car use in China has exploded.
In its wake we find the industry that makes the wheels spin: the automotive parts industry. Attracted by the rapid demand for cars, thousands of automotive parts companies have sprung up across China, resulting in the highly fragmented sector we find today. Until recently, car makers were able to exert pressure on parts manufacturers, drawing the attention of China’s anti-trust regulators. Following a host of harsh fines and penalties meted out to the major car makers, auto parts manufacturers are now able to sell directly to repair shops and consumers – a move that enhances their price setting capability.
This helpful guide explores:
- An Overview of China’s Auto Parts Industry
- Investing in China’s Auto Parts Industry
- Opportunities in New Energy Vehicles
Originally published by Dezan Shira & Associates, a fellow LEA Global member.