Potential market for automotive and parts consumption in the Midwest of China

On December 21st, 15 Chinese and foreign leading auto parts enterprises joined the Shanghai General Motors Wuhan supplier park and will provide Shanghai GM with chassis assembly modules, exhaust systems, transmissions, interior and exterior trims, chairs, and water pipes. Stamping welding assembly and other ancillary products support and logistics and transportation services.

In June of this year, the Shanghai General Branch Wuhan Branch, with a total investment of 7 billion yuan and a land area of ​​2.3 square kilometers, has not yet been completed, which has formed a considerable industrial chain for automobiles and parts.

“The central and western regions that have been radiated by Wuhan not only have a vast market with a total population of 450 million, but also have a regional economic growth rate higher than the national average, and the automotive and component consumption market has great potential.” said Ye Yongming, General Manager of Shanghai GM. Said that the first 15 suppliers to invest in Wuhan were Shanghai GM's long-term partners and core suppliers, including many of the world's top 500 companies.

In recent years, China has gradually liberalized the equity ratio of auto parts companies, and the establishment of wholly-owned enterprises by multinational auto parts companies has become a trend. According to reports, Delphi, Denso, Sumitomo, the United States Dana, France Valeo, Japan Fujitsu Electronics and other parts of the multinational giants competing to expand investment scale in China.

Yu Xinguo, director of the Economic and Information Commission of Wuhan City, said: “The interest of domestic and foreign businesses in developing opportunities for the Chinese auto parts industry lies in the business opportunities brought about by the upgrading of Chinese auto parts products and the transformation of technology.”

Ye Yongming said that the Shanghai General Motors Wuhan Branch’s process equipment and high-standard international environmental protection facilities will be built into a green, environmentally friendly factory that integrates precision, agility, flexibility, and modularity. This will ensure that the Shanghai GM Wuhan plant will enter the world’s top automotive manufacturing facilities. The ranks of the factory.

At present, 70% of the world's top 100 auto parts suppliers have come to China for business, and there are more than 1,200 foreign-funded enterprises that manufacture auto parts in China.

Experts believe that China's auto market has at least a period of 10-20 years of rapid growth, but the auto parts service and after-sales service market will be a long-term and stable huge market.

According to the information released by the China Association of Automobile Manufacturers in Wuhan recently, in 2011, the output value of China’s auto parts and components has exceeded RMB 2 trillion, and will continue to increase by more than 20% in the next few years. It is estimated that the scale value of China's auto parts industry can reach 2.5 trillion yuan by 2015.

Wuhan is located in the hinterland of Central China and is an important land and water transportation hub in the country. The radiated central and western regions have a vast market with a total population of 450 million.

The Wuhan Municipal Party Committee Secretary Ruan Chengfa said that after Shanghai GM's Wuhan base is completed, together with the soon-to-be-started Dongfeng Honda No. 2 plant and the French company Citroën Shenlong III plant that will be put into operation next year, Wuhan will have top-tier manufacturing plants for the United States, Japan, and France. Models range from economical to high-end models.

The world’s top three auto giants produce whole vehicles in the same city. This is no precedent in China. Instead, they chose to settle in central China’s city of Wuhan. The reflection behind this is that the mid-west auto consumption market in China is increasingly becoming a hot spot for auto manufacturers at home and abroad.

The rapid growth of the auto parts market is the main reason why domestic and foreign parts manufacturers are optimistic about the Midwestern China market. In the first eight months of this year, the cumulative industrial output value of China's auto parts manufacturing industry reached 1.44 trillion yuan, an increase of 15.5% over the same period of the previous year, although it was lower than the 23.9% growth rate in the same period of last year but it was high. 12.6% growth in the industry.

According to the average forecast of the Information Services Agency-Automotive Information Department, Macquarie Securities Research Corporation and the Economist Intelligence Unit, although the growth of China’s automobile sales has entered the “micro-growth” era in the past two years, the high savings rate and Depressing demand means that Chinese consumers will purchase 25.5 million cars in 3 years. Most of the new growth will come from the Midwest.