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At the dawn of the fifth anniversary of China's accession to the WTO, discussions on how the auto parts industry has adapted to globalization were reignited. During the International Investment and Trade Procurement Sub-forum at the 2006 China Automotive Industry International Development Forum on September 17, representatives from domestic auto parts companies and officials from foreign embassies in China shared their insights.
Globalization presents significant opportunities for growth. According to Lan Qingsong, Executive Director of Shanghai General Purchasing Parts, China’s auto parts sector stands to benefit greatly from the acceleration of globalization. He emphasized that this trend enables parts companies to fully engage in global procurement, enhancing their ability to operate across multiple regions. Additionally, it fosters improvements in the technical capabilities and development potential of these companies.
Lan also pointed out that globalization can lead to the integration of China’s spare parts enterprises with globally recognized manufacturers, strengthening their core competitiveness. This allows top-tier companies to compete more effectively in both domestic and international markets, while also optimizing supply chain efficiency and reducing supply distances.
The concept of "China Purchasing" is now a key element in the competitive strategies of multinational corporations. As the Chinese auto market continues to expand, the growth rate of the auto parts industry has surpassed that of domestic OEMs. Many manufacturers are now looking beyond borders, aiming to adapt to the international aftermarket and global OEM supply chains.
Nanyang, General Manager of the Shanghai Nanyang Automotive Parts Purchasing Center, noted that Chinese auto parts firms are not only serving domestic demand but also accelerating their export efforts. According to customs data, in 2005, China's auto parts exports exceeded $10 billion, involving over 1,000 exporting companies.
Multinational automakers have also restructured their supplier networks to enhance cost competitiveness. China’s auto parts resources are now part of their global procurement systems. Nanyang highlighted that "China Purchasing" has become a focal point in the strategies of many global automotive companies, reflecting a broader shift in the industry. By 2010, China’s auto parts exports are expected to surpass $30 billion.
Domestic auto parts companies have gained a competitive edge in global supply chains. With the expansion of the Chinese auto market and increased localization, China now boasts a rich pool of auto parts resources. Many components offer clear advantages in cost and price, making them highly competitive internationally.
Nanyang added that, thanks to improved quality systems, supply chain standards, and international certifications, many local manufacturers have met the requirements of global buyers, entering the multinational supply chain. This has allowed Chinese companies to rise rapidly and match the capabilities of foreign firms, offering buyers more competitive options.
Moreover, Chinese suppliers are actively aligning with the needs of multinational automakers, often investing more in technology to meet specific procurement demands. This close collaboration helps them integrate into global strategies and successfully expand abroad. In recent years, the variety and volume of auto parts exports have grown steadily, helping domestic companies gain valuable international experience.
In addition, foreign-invested parts manufacturers have shifted their focus to China, adjusting their global strategies. They are deepening their localization efforts, which in turn boosts the development of second- and third-tier local suppliers, enhancing the competitiveness of foreign companies in the global market.
Many countries are now showing interest in cooperation with China’s growing auto parts industry. Li Xinyu, an official from the Australian Embassy in China, noted that China is Australia’s 20th largest investment destination, with total investments reaching A$2.043 billion by the end of 2005. Australia is also China’s 18th largest overseas investment destination, with investments totaling A$2.275 billion.
Li highlighted that Australia has a well-established wholesale and retail network in the spare parts industry, with annual component imports valued at A$2.7 billion, growing by 3.5% annually. The country’s spare parts market generates around A$8 billion in sales each year, with major importers including Japan, North America, Germany, Thailand, and South Korea.
Mexico, the world's 11th largest car manufacturer and the U.S.'s second-largest trading partner, has a mature and comprehensive supply chain system. Carlos Santos, Commercial Counselor at the Mexican Embassy in China, explained that Mexico has established extensive sales agreements across North America, South America, and the European Union, forming a strong and developed sales network.
Mexico also excels in the production of certain auto components, such as steering wheels, seat belts, and seat backs, with increasing production capacity. The country is actively seeking partners, leveraging its low labor costs and high-quality workforce to ensure product reliability. The Mexican government has introduced various incentives to attract foreign investment, including tariff policy adjustments and organized visits for Chinese companies to explore opportunities.
October 04, 2025