China's Commercial Vehicle Parts Makers Make Solid Headway

Despite occasional reports of slowing car sales in China and elsewhere, makers of auto parts in China have had to continue upgrading manufacturing technologies and raising output, which will buoy the nation's auto parts exports on a steady uptrend to take a 30% share of global production by 2015 from the current 25%, becoming an even bigger player in the segment.

Auto parts makers in China have been lucky to have had a head start, having been able to profit from the emerging car market before many automakers, both foreign and local, had begun to invest systematically in the nation to generate local demand for car parts, with the suppliers growing before the boom by being both OEMs and subcontractors for foreign buyers.

Over the past few years, many larger foreign automakers and auto parts OEM (original equipment manufacturers) have set up international purchasing centers (IPCs) to build business with local manufacturers, which helps to bolster development of the industry. Further evidence of China's significance as a major auto parts supplier, globally fourth following the U.S., Japan and Germany, is shown by some overseas buyers' earmarking several billions of US- dollars for China-made auto parts a year.

As auto parts makers in China become ever bigger, more important globally, so are makers in China of commercial vehicle parts. Decades of development have successfully reshaped the sector for the better, from labor-intensive, low-end manufacturing into one with capacity to turn out mid-to-higher-end parts with more investment, further reach to upscale markets, and higher margins due to filling OEM orders instead of merely making aftermarket products.

Some 60% of commercial vehicle parts companies in China are directly or reinvested by foreign companies, and the remainder set up local investors, whose major export markets include, according to market share, the U.S., Japan, Korea and Germany.

AMT Drives China's Commercial Vehicles
Statistics from the German ZF Group show that 10.5% of all 6-ton-above trucks sold were automatic-transmission ones in Western Europe in 2002, and the figure surged to 50% by 2008, with some 36.9% of heave-duty trucks sold within the North American Free Trade Area (NAFTA) being also automatics.

In contrast to the rising volume of auto-shift trucks in West Europe and North America, a much smaller volume of mid-to-heavy-duty trucks are equipped with automatic gearboxes in China. However, such trend is changing, with most makers now equipping trucks with automatic transmissions to lower cost. Local observers project sales of mid-to-heavy-duty automatic trucks will grow to 80,000 units to command a 10% share of the total by 2012, with around 2,000 automatic-transmission buses also to be sold.

“AMT or automated manual transmission, despite being the trendsetting technology for commercial vehicles, has just begun to become more popular among makers, who still use the technology on a trial basis, but AMTs are widely used on buses in China. However China is determined to sharpen domestic AMT technology applied to commercial vehicles to avoid being at the mercy of foreign suppliers,” said Wang Shengtang, secretary-general of China Gear Manufactures Association.

China's determination to gradually wean itself from foreign-supplied technologies and parts seems apparent, with several industry stimulus policies in the works and many industrial parks set up nationwide, measures of which are expected to enhance independent development of integrated supply-chain of commercial vehicles and parts in the near future.

Cases in Point
The above efforts are working for at least two Chinese commercial vehicle parts suppliers. Qijiang Gear Transmission Co., Ltd. (QJGT), a specialized maker of automatic gearboxes and gears for trucks, has recently been certified by German ZF for its 5S-111GP heavy-duty truck gearbox to be among world-caliber peers.

Realizing that degree of precision, reliability of auto parts varies proportionally to machine tools used in production, the company has imported many advanced production, inspection equipment from the U.S., Germany, Australia, Japan, Korea and Italy.

With products well received in the U.S., EU, South Asia, Middle East and Africa as well as technological support from ZF, QJGT has developed the S6-90 gearbox with 6 forward and a reverse gear, which is ideal for 10 to 12 meter buses driven by 185w to 235w engines. Local bus maker Xian Silver Bus Corp. uses this gearbox, which proves the product's roadworthiness.

Qijiang began working with a local, large truck maker, YuChai Group, to develop AMT truck parts, with both currently building AMT gearboxes and ECUs (engine control units).

Besides planning to launch 6-gear models this year, the maker has proven itself: QJGT AMT gearboxes were adopted, tried successfully and given high marks at the Beijing Olympics, 2010 Shanghai Expo and 16th Asian Games. “Since we hope to lead the conventional and AMT gearbox segments, QJGT will be shifting gears as necessary sort to speak to take on ever more challenging market conditions,” said He Hongbin, the sales manager.

Chassis-dedicated

Another truck parts operator who is making headway is Anhui JAC Coaches Co., Ltd., whose bus chassis, seen by some as critical to driving comfort and safety, are helping to build global presence for the Chinese bus industry. One of the highest-profile chassis suppliers in the country, Anhui JAC, an affiliate of JAC Group of China and leading commercial vehicle maker, has been developing buses and parts for over 50 years.

The bus sector in China was skeletal 20 years ago without local capacity to make chassis, which did not stop JAC from investing ample resources in development, production of higher-end chassis. Years of earnest effort led to the maker's first independently-made low-center-of-gravity bus chassis to literally kick start the sector. “We are proud of the product that is still a hot-seller,” said Gao Jun, deputy marketing manager, attributing the firm's success to a steady program of structural design optimization with state-of-the-art technologies learnt from foreign countries and based on research of road conditions in China.

Without delving into technicalities as polar moment that can flex a poorly-made chassis to compromise structural integrity, Gao noted that durability, ride comfort and other factors of bus chassis can only be optimized with advanced technologies, which JAC has built with computer software, huge database in-house to facilitate R&D and parts production. JAC tweaks chassis prototypes with feedback from bus manufacturers and systematic analysis of parameters in its database at the development stage before volume production. To assure top quality, JAC also relies on world-caliber, precision robotic welding line and automatic assembly line.

Adopting advanced production technologies, equipment and uncompromising work ethic clearly works for JAC, whose bus chassis have been exported by the tens of thousands worldwide to secure its status as a world-class, successful supplier.