Ever More Automotive Electronic Systems Are Being Made in China - 14 May 2007
A trend for vehicle manufacturers in China to use electronic systems made in China rather than importing them is forecast to accelerate in the next five years. This is according to a new report, entitled “The Chinese Market for OEM Automotive Electronics”, published recently by IMS Research.
The fast growth in demand for Chinese made systems is largely due to increased production of vehicles from Chinese manufacturers such as Chery and Geely. It is estimated that Chery was already one of the top four suppliers to the Chinese car market in 2006. Surging market shares of local vehicle makers has significantly increased opportunities for local system suppliers who have traditionally found it difficult to win OEM contracts from multinational vehicle makers.
Increasing competition in the Chinese vehicle market is forcing suppliers to reduce the price of their vehicles. They, in turn, are pushing for ever lower system prices from their suppliers. In response, more and more multinational system suppliers are expanding manufacturing facilities in China to reduce import taxes, labour costs and logistics costs. This factor is also increasing the number of systems made in China.
Senior analyst and report author, Richard Jun Li commented: “Local Chinese system suppliers offer low price but high quality systems which are essential for vehicle makers to reduce costs. In addition, Chinese government authorities have shown strong support to local system suppliers through a number of policies and by providing R&D funds. Furthermore, encouraged by the prospect of reducing costs, multinational system makers are tending to expand their production capacity in China. All these factors are accelerating growth of systems made in China”.
About IMS Research
IMS Research is a specialist supplier of market research and consultancy services on global electronics markets. Information from IMS Research is used by major companies worldwide to assess market trends, solve marketing problems, and improve the efficiency of their businesses. IMS Research is a truly international company, selling to more than 35 countries around the world and supported by offices in Austin (Texas), Shanghai (China) and Wellingborough (UK). IMS Research has published a wealth of detailed research on various automotive related markets since 1998.