In a few days ago at the China International Expo on auto parts, GM group vice president, said that the next three years, the global chief procurement officer who is the most urgent task "to buy low-cost," the trend in global procurement, led by China Parts of low-cost producing countries will become the buyer's procurement centres, including General Motors, Chrysler and other international auto giants are bound with an increasing number of parts manufacturers in China to establish relations of cooperation. In this large context, China's low-cost parts to its own output and fast in the global market continued expansion.

       According to the latest statistics of China's Ministry of Commerce show that in January this year - 10 of China's auto parts exports of 13.25 billion yuan, an increase of 30 percent, large international companies on China's growing confidence quality accessories. At the same time, in January of this year - September auto parts exports has exceeded the whole of last year, motor vehicles and parts will eventually become a low-cost production in China in the export of electromechanical products, the most potential, the most promising products. In recent years China and auto parts exports gradually achieved international recognition, by the early supply of foreign maintenance market, to gradually shift to join the world's leading automotive parts company's cross-border vehicle procurement plans.

       2007, General Motors in China signed a total of 198 suppliers, including 41 in Beijing, 113 in Shanghai, Guangzhou 44. Third quarter of this year, GM global sales up 16 percent record, its performance makes the Chinese market GM sought to become the first breakthrough in China's sales of 1 million car company. GM since 2003, sales growth has exceeded industry growth is expected in 2007 sales compared with 2001 there will be 150 percent growth, including China, India, Russia, Turkey, the fastest growing, are more than 100%. 11 emerging-market sales of GM's 2007 global sales of 25 percent. Compared with GM, Chrysler has just Dabingchuyu, 2006 loss of 1.2 billion euros. To reduce costs, Chrysler decided to go to emerging markets for parts procurement, to obtain Yijianshuangdiao the effect, on the one hand to reduce company costs, on the other hand take advantage of emerging market suppliers to the competitiveness of existing suppliers to promote the level of competition. According to Chrysler global provider of quality control vice president Scott Stryker, currently in China for the eventual establishment of cooperation between suppliers and cooperative relations between the ratio of 75%, Korea 84%.

Chrysler supplier of quality, systems, costs, supply and so on a very sophisticated assessment system development, quality and logistics requirements are strictly on the quality of its assessment system, 82 percent to pass before they can establish cooperation relations . As fuel prices soar, logistics costs continue to rise, Chrysler suppliers to develop the overall programme of logistics operations, logistics cooperation and designate the company, to help suppliers reduce logistics costs. DaimlerChrysler Northeast Asia, vice president of procurement and supply of Lowe shown strong interest in the Chinese market, claiming that parts manufacturers have the ability to get the cooperation Chrysler orders.

While GM and Chrysler all parts of China that encourage manufacturers, but the fact that transnational auto parts companies in China investments are increasing year by year. Currently included in the "Fortune" Global 500 auto parts enterprises in China, and all the establishment of a joint venture or wholly owned enterprises. District-based, has been basically formed the northeast, Beijing and Tianjin, Central China, Southwest China, the Yangtze River Delta, the Pearl River Delta regional focus on six major components. Many local Chinese parts and components enterprises privatization has just completed the restructuring of the global supply chain is still very vulnerable position.

       Even parts enterprises in China have such a low-cost expansion boosters, but we have to keep a clear head, after all parts of China lags behind the development of the issue is very obvious. The first is the industrial structure is irrational. Although China has tens of thousands of home parts business, but really very few requirements of the scale, the overall low level, but also scattered strength, not a strong development capabilities, to meet foreign demand for large bulk purchases. This was followed by the weak independent development capabilities, the lack of brand-name products. China's components of convergence products, small-scale, low-risk capability, low technological content of products, in particular the lack of major car assembly and key components of the core technology. Then there enterprises small in scale, low degree of specialization. Large-scale enterprises account for all the enterprises of less than 1 percent, less than 15% of large and medium-sized enterprises, the majority of enterprises did not enter the vehicle matching the market, only a single social service parts suppliers.
     Automotive products of the enterprises to adopt different standards, different series, and the local parts and components product standardization, serialization, the low level of GM, has seriously hampered its development. In addition, the export structure of the "three low and one high", that is, low value-added, low technological level and low prices, high energy consumption, resulting in exports of poor efficiency, competitiveness is not strong. With the components of transnational companies to enter local auto parts production cost control increasing pressure, profit margins are also increasingly narrow.

Data showed that the German public procurement in 2006 in China's auto parts amounted to 1 billion U.S. dollars, but the key parts assembly plant for the general public and supporting domestic enterprises in the wholly-owned or controlled. Car parts and components supporting the Guangzhou market, it was almost monopolized by Japanese. Despite the global ranking of the top automobile manufacturers, their parts and components made rate was only about 30%, but the enterprises and supporting their interests in the same chain, its symbiotic relationship is quite clear.

China's auto parts industry this year will reach 670 billion yuan output value and sales output value will reach 650 billion yuan, substantially exceed 2006's 403.5 billion yuan. The output value of large parts and components industry does not mean that China's rise, but precisely reflect the multinational corporations in order to meet the requirements of China's industrial policy, introduced indirect strategy. It is understood that the U.S. parts business to pay the wages of workers in the United States trade unions for an average 25 U.S. dollars an hour, not including benefits. This Chinese workers and 1.5 U.S. dollars one hour's salary formed a sharp contrast. Even in some less developed countries of Eastern Europe, the hourly labor compensation is more than six U.S. dollars. China's low-cost labor prices is evident.

China's imports of automotive components, mostly high-margin, high value-added key pieces of the vehicle and high-tech electronic products, and parts of China's enterprises, rely on the production of low-margin, low value-added processing of products to maintain Livelihood. These parts and components enterprises, even if access to the procurement of large multinational companies alone, nor is it a good news, because they have mastered the technology pathetic.

It is understood that China's auto parts business R & D investment sales currently account for only 1.4 percent, far below the multinational companies an average of 5%. Even if China is ranked first parts of the Wanxiang Group enterprises, and the world's top 100 auto parts suppliers compared to sales gap is more than 10 times. Therefore, China's auto parts enterprises to seize the advantages of their own low-cost production at the same time, enterprises need to upgrade the technical strength, only advanced technology combined with a low-cost parts production, is China's global automotive components business expansion Market, enabling the invincible weapons.