Chinese Shock-Absorber Industry Boosts Sales With Better Quality

Along with the rapid growth of auto sales and car manufacturing in China in recent years, the Chinese shock-absorber industry has also been developing by leaps and bounds with numerous major players vigorously expanding their operations.

The Xichuan Automobile Shock Absorber Factory in Nanyang city, Henan Province, for instance, boosted its annual capacity to 4 million units by inaugurating a new 1- million-unit production line at the end of 2007. The company's annual capacity will skyrocket further to 7 million units after the completion of a new 3-million-unit factory that is now under construction.

The Hangzhou Founding Traffic Parts Co., a veteran player with a history of over 10 years, doubled its annual output to 2.5 million units after moving into a new factory last year.

　　

Similar expansion projects are under way at many of China's other major shock-absorber makers, which now number over 100.

　

An executive of a shock-absorber maker in Zhejiang Province points out that in addition to the enlargement of operating scale, Chinese shock-absorber manufacturers are also making major inroads in the improvement of product quality, successfully narrowing the technological lag between them and their counterparts in the industrially advanced countries. Improved quality is helping Chinese makers to dominate the domestic original equipment (OE) market, especially for low- and mid-range sedans. China continues to use imported shock absorbers, however, for its high-end sedans.

In terms of development, Chinese makers of shock absorbers for commercial vehicles lag behind producers of shock absorbers for sedans, mainly because the relatively small size of the domestic market hampers their achievement of economies of scale, as well as the fact that commercial-vehicle drivers are not so demanding about comfort as are car drivers. In fact, many Chinese trucks-notably those used in mining operations--do not have shock absorbers at all.

With auto sales in China soaring over 20% to 8.8 million units in 2007, major Chinese shock-absorber producers, most of them OE suppliers to domestic automakers, are seeing rosy times ahead.

Moreover, along with improvement in their product quality and after-sales service, major suppliers in the line have also been making major inroads into overseas markets. Tian Qiang, vice president of Hangzhou Founding Traffic Parts, for instance, reports that his company's exports have been growing at an annual clip of 10% in recent years and that the products being sold abroad have expanded from low- and mid-range items to high-range items for performance-tuning markets. His export outlets extend from the Middle East and Southeast Asia to industrially advanced markets such as Belorussia and Germany, Tian says.

According to the statistics from the PRC Ministry of Commerce, shipments of Chinese-made commercial vehicles jumped 22.3% to 2.5 million units in 2007. This bodes well for the shock-absorber market, especially since driving comfort is becoming an increasingly important factor in the choice of vehicles to buy.

Most major Chinese shock-absorber makers currently focus on the sale of OE products to domestic auto makes. Brief profiles of some major makers in the line follow:

ADD Industry (Zhejiang) Co.

Founded in 1986, ADD Industry is one of the largest dedicated shock-absorber makers in China. In 2006 the company boasted an output of 5.2 million units; 90% of the total was shipped abroad, making ADD China's leading shock-absorber exporter.

Fuao Auto Parts Co.

　

This wholly owned subsidiary of China FAW Group Corp. turned out 3.7 million units in 2006, mainly OE products for the Bora and Jetta models made by China FAW Group.

SiChuan NingJiang Precision Industry Co.

This company, a subsidiary of the China North Industries Group Corp., turned out 2.77 million units in 2006, mainly for OE supply to the Chana International Corp. and Liuzhou Wuling Motors Co. Some products were also sold to overseas markets.

Xichuan Automobile Shock Absorber Factory

A dedicated shock-absorber maker, this company turned out 2.65 million units in 2006, mainly for OE supply to the Chery Automobile Corp., BYD Co., and Yutong Group.