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Immune to the global slowdown, Chinese auto parts industry delivers record numbers. By Bertel Schmitt, CEO Sinamotive Group (HK) Limited.

While markets all over the world tank, while auto maker flirt with bankruptcy, the Chinese auto parts industry goes full steam ahead. In the first seven months of 2008, China’s auto-parts exports skyrocketed by 34.9% year on year (y/y) to $8.88 billion, says a report released by China’s Customs Bureau

China exported $ 8.73 billion worth of auto-parts from January to July 2008.

Most of this growth was driven by companies that usually complain the most about Chinese imports. Foreign invested companies and joint ventures exported $4.56 billion of auto-parts, up 31.6% y/y, amounting to 51.4% of the total.

Where are Chinese auto parts most popular? In the U.S., in the EU and Japan. The U.S.A. took parts for $2.69 billion ( 8.8%), Europe imported parts for $1.6 billion ( 39.2%), Japan sourced parts for $1 billion ( 36.8%). These three markets alone accounted for 59.6% of 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.) Europe takes an ever increasing amount of Chinese parts. Exports to the U.S.A. still grow, but at a more leisurely pace.

3.) The main drivers of this growth are foreign companies, who use China as a low cost production base and sell the product under their own brand name at high margins.

4.) Expect further sales increases due to falling raw material prices and sinking shipping costs. This is especially true in the after sales sector. Auto makers may also buy even more Chinese parts. They aim to off-set their diminishing sales with higher cost savings with parts, sourced in China.

Tags: Auto Tips