Known as a powerful machine auto parts exports of Chinese enterprises are under pressure.

       Last year, the U.S. dollar against the RMB exchange rate fell by 11 percent, to U.S. companies, China's commodity prices higher. Soaring fuel prices rose to promote the freight. Labor costs are rising. The summer of 2007, the Chinese government has for thousands of export products to reduce subsidies.

       Pressure has been evident, despite the statistics uneven. Compared to the same period in 2007, the first half of this year China's auto parts exports to the United States fell 4.7 percent to 3.27 billion U.S. dollars (22.38 billion yuan). China's auto industry association said this year the same period, China's exports to Europe grew 15.7 percent to 2.04 billion U.S. dollars (13.96 billion yuan).

       Suppliers, as the owner of cheap labour and adequate manufacturing capacity, in many parts procurement in China is still attractive. Although the rise in wages, but also increase the productivity of workers, and often even faster.

       Valeo SA's group vice president of China Christian Marsais said: "We are on China's cost advantage is still very interested. We have not changed in China, the manufacture, purchase or investment plan."

       Last year, the French supplier in China procurement worth over 300 million euros (2.99 billion yuan) in parts.

       Visteon Asia-Pacific supply chain management director Karl Neumaier said: "I regularly with industry counterparts to meet enterprises. I did not feel any change."

       Valeo's Marsais admitted that he was on some products to reconsider. He said: "large parts not suitable for growing exports to the United States. Do not need too many of the local assembly of products is the case."

       Marsais said that if Mexico Valeo companies to purchase, even taking into account the freight, 95 percent of Chinese-made parts are still in Mexico than the procurement of at least 15 percent cheaper.

       He added that roughly 15 percent is a demarcation point. When this ratio higher than when purchasing in China through the advantages of cost savings can easily overshadowed the longer transit time and transportation costs and other disadvantages.

       Marsais said, Valeo company purchases in China this year is expected to grow more than 30 percent.

       Although oil prices rose sharply, but their influence remains limited.

       Headquartered in London's Drewry Shipping Consultants Ltd. The company said in May 2007 2008 May, a 40-foot container from southern China were sent to Los Angeles costs only rose by 10% to 2,400 U.S. dollars (16,428 yuan ).

       Marsais said that during this period, Valeo companies from China for the transport of small and medium-sized components of the total expenditure of the freight cost ratio of only 5% to 7%. Drewry NeilDekker consultant company that was not obvious impact on one of the reasons why the U.S. economic downturn may be caused by weakening demand.

       Moreover, China's expansion of higher wages - 10 to 15 percent last year - has been offset by productivity improvements.

       Marsais, said: "We work closely with suppliers to improve productivity. We are very familiar with the process, we believe that many can still tap the potential for further profit."
       Visteon also held the same view. Neumaier said: "The pay rise and the appreciation of the RMB is the biggest role in promoting the efficiency of the."

       In addition, many electronic components in China only to buy.

       "Most of the world's electronics production enterprises will be relocated to China - equipment manufacturers and their suppliers have followed the region. So we have a lot of parts and components and raw materials in China can only buy."

       Even if China lost its cost advantage, supply chain will not happen soon change. Visteon's Neumaier said: "If we have to shift production to other factories, the production of new customers will put very stringent quality standards and testing requirements. This process required the longest 18 months to complete."

       Of course, during that time, currency and commodities may be in a new direction.

       Valeo's Marsais said: "The surge in oil prices and the renminbi exchange rate fluctuations on our decision-making little influence on the long-term value proposition, we have a greater interest in China."

       BASF JoergWuttke chief representative in China, the auto industry's attitude to do a lot of summing up.

       "I think the short-term logistics cost increases will not move out of China's automotive industry. BASF will not change its attitude. I know of any other companies will not be the same."