My biggest grief with the Chinese parts industry is that buying parts in China is very hard. The Chinese parts industry is losing huge amounts of business because the Chinese parts industry remains very inaccessible to many foreign buyers. I know, I shouldn’t say that, because my company is in the business of bridging the demands of foreign buyers and Chinese manufacturers. If everything I am going to write would change, I would be out of business. I’ll write it anyway.
A recent article in Gasgoo, said that “China auto parts manufacturers face a cold snap.” All who are in the parts industry know that it is much more than a cold snap. It is an ice age. Sales had begun deteriorating in the first half of 2008 due to high raw material prices, paired with high transport costs, and paired with a low dollar. In September 2008, the U.S. new car market crashed. It still hasn’t stopped crashing. Other markets, such as Europe and Japan followed.
The article in Gasgoo says: “Amid the depressing international environment, analysts commonly advise Chinese auto parts companies to turn to the domestic market. But some think differently, like Kevin Chen, president and CEO of Gasgoo.com, B2B marketplace for export and import of auto parts, who believes they should enhance exports and globalization. Chen points out that globalization will become the consensus of Chinese complete car and parts manufacturers in the future, and they need to enhance their management, by making full use of the opportunities coexisting with the financial crisis.”
Both views are right. The domestic car industry still shows some growth. It will also consolidate to fewer makers and brands. Consolidation is always dangerous for suppliers.
Kevin Chen is right. Especially during times of crisis there are big opportunities for low costs producers. The biggest opportunities are in the after sales market. The after sales markets in the U.S. and Europe are huge and are very stable. A car purchase can be delayed. A defective brake must be repaired.
The Chinese parts industry is mostly focused on OEM sales. In that, it doesn’t need any help. But worldwide new car sales are way down, and by all projections, it will take many years for them to recover. It’s the focus on OEM sales, along with a cratering new car market that is hurting the Chinese parts industry.
The after sales market is there for the taking. But as Kevin said, parts manufacturer must adapt to make full use of the opportunities.
Source:http://news.alibaba.com/
A recent article in Gasgoo, said that “China auto parts manufacturers face a cold snap.” All who are in the parts industry know that it is much more than a cold snap. It is an ice age. Sales had begun deteriorating in the first half of 2008 due to high raw material prices, paired with high transport costs, and paired with a low dollar. In September 2008, the U.S. new car market crashed. It still hasn’t stopped crashing. Other markets, such as Europe and Japan followed.
The article in Gasgoo says: “Amid the depressing international environment, analysts commonly advise Chinese auto parts companies to turn to the domestic market. But some think differently, like Kevin Chen, president and CEO of Gasgoo.com, B2B marketplace for export and import of auto parts, who believes they should enhance exports and globalization. Chen points out that globalization will become the consensus of Chinese complete car and parts manufacturers in the future, and they need to enhance their management, by making full use of the opportunities coexisting with the financial crisis.”
Both views are right. The domestic car industry still shows some growth. It will also consolidate to fewer makers and brands. Consolidation is always dangerous for suppliers.
Kevin Chen is right. Especially during times of crisis there are big opportunities for low costs producers. The biggest opportunities are in the after sales market. The after sales markets in the U.S. and Europe are huge and are very stable. A car purchase can be delayed. A defective brake must be repaired.
The Chinese parts industry is mostly focused on OEM sales. In that, it doesn’t need any help. But worldwide new car sales are way down, and by all projections, it will take many years for them to recover. It’s the focus on OEM sales, along with a cratering new car market that is hurting the Chinese parts industry.
The after sales market is there for the taking. But as Kevin said, parts manufacturer must adapt to make full use of the opportunities.
Source:http://news.alibaba.com/
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