Growing Auto Sales Brighten Future of China's Auto Body-parts Industry

Top supplier keeps ahead of the competition through constant upgrading

After more than 10 years of vigorous development following China's accession to the World Trade Organization (WTO), the country's automotive industry has been enjoying rapid and stable development thanks partly to the government policy of adjusting supply and demand as well as helping the industry catch up with global trends.

Statistics compiled by China Association of Automobile Manufacturers (CAAM) show that in the first half of 2013, production and sales of new cars in China reached 10.75 million and 10.78 million units, respectively, for increases of 12.8% and 12.3% over the previous year.

Exports of assembled cars from China slipped 0.6% year-on-year (Y0Y) in the first half of the year to 486,800 units, due mainly to stagnating global sales and the appreciation of the renminbi (RMB, or Chinese yuan).

CAAM's data showed that in the first five months of the year exports of China-made auto body parts and accessories increased 12.33% YoY to US$2.98 billion. Major export markets included the U.S., Japan, South Korea, the U.K., and Germany. Imports of body parts and accessories in the same period grew 12.04%, to US$2.29 billion, with most of the imports coming from Germany, South Korea, Japan, the U.S., and France.

Major Players
One of the outstanding Chinese auto body-parts makers that supply both the domestic and international markets is the Shanghai SIMYI Auto Parts Industry Co., Ltd., which was established in 1996 and specializes in auto body parts manufacturing and mold/die development.

Continuous rapid expansion has built the company into a leading player of its kind in China, and it has established a subsidiary, Simhoong Auto Parts Industry (Anhui) Co., Ltd., to serve as its production base and logistics center.

SIMYI was founded with total investment of US$57.5 million; today, its registered capitalization stands at US$37.5 million and its workforce totals more than 1,100. Company headquarters covers a campus with total area of 385,000 square meters.

Ever since its inception SIMYI has brought in top-end equipment from industrially advanced countries to upgrade its manufacturing capabilities, and its corporate management system has come to be known for its high efficiency. In addition, SIMYI has earned major international quality-system certifications including ISO 9001, QS 9000, ISO/TS 16949, and ISO 14001. Most of the firm's products are certified by CAPA (Certified Automotive Parts Association) of the United States.

SIMYI supplies a wide range of auto body parts including hoods, fenders, doors, tail gates, bumpers, and radiator supports, among others. The high-quality, reasonably-priced parts are highly competitive in the international aftermarket.

With “Reducing Cost, Improving Quality, and Enhancing Market Competitiveness” as their business doctrine and “High Quality, Zero Defects, and Customer Service Forever” as their unwavering policy, SIMYI employees are committed to providing the best of products and services to customers throughout the world. The company is eager to cooperate with customers around the world in the joint creation of more lucrative business opportunities.

The company has been a frequent winner of awards granted by the Anhui Provincial Government for its outstanding performance in such areas as technical advancement, operating efficiency, and credit rating including “AAA-grade Credit Enterprise” and “Advanced Technology Enterprise” awards. In addition, the company's “SIMYI”-brand auto body parts have been rated as “Anhui Province Famous Brand Products” from 2009 through 2012.

SIMYI general manager Huang Yi-ping reports that about 80% of his company's body parts are supplied, on both an original equipment (OE) and aftermarket (AM) basis, to the domestic market and the rest go to customers all over the world. To assure the best product quality, SIMYI insists on using steel plate materials supplied by China's Baosteel group.

Huang claims that his company has gained a solid foothold in the global replacement aftermarket, and that it will continue to install new equipment and introduce new technology in order to achieve constant improvement. To meet ever-growing demand, the company has set up more than 2,000 distributors and is pouring more and more resources into product development with the aim of boosting its product comprehensiveness and further consolidating its leading position in China.

“Currently, the Chinese auto body-parts replacement aftermarket still lacks common standards,” Huang points out, “and many smaller players have been entering the market by pushing low-price, poor-quality products, distorting market order. Facing unfair competition from such rivals and the lack of regulations governing the big aftermarket, we have been expanding our production capacity to meet market demand while keeping all manufacturing processes in-house to control costs. In addition, we've slimmed down our workforce and increased automation to upgrade our cost competitiveness.”

These efforts have paid off, in a constantly welling stream of orders from customers at home and abroad.

Huang predicts that more foreign suppliers will enter China's big body-parts aftermarket, creating intense pressure on existing Chinese companies in the line. “The government has to map out related laws and regulations so that this business can be better governed,” Huang urges. “That's the only way the big aftermarket in China can develop in a healthy direction.”