BIZCHINA / Center
Foreign investment on auto parts turns to JVs
By Tu Lei (chinadaily.com.cn)
Updated: 2007-06-06 09:37
Foreign auto parts firms have been very keen on the Chinese market since
2005, but facts show these foreign companies are shifting their focus
from sole investment to joint ventures (JVs).
Sources said that Bosch, one of the world's largest auto parts suppliers,
plans to invest 620 million more euros (US$836.94 million) into the
Chinese market before 2008, and Delphi, a world leader in mobile
electronics, said it would build another two JVs in China.
In 2005, 68 percent of foreign auto parts companies chose to invest
wholly in China, but in 2007, more firms prefer JVs.
Mahle Tri-Ring Valve Train (Hubei) Co Ltd, a Sino-German JV, was set up
in January this year, with Mahle holding 60 percent and Hubei Tri-Ring
Valve Train Co Ltd holding the remainder. QTires (Qingdao) Technology Co
Ltd is another JV worth US$12 million between American QTires and a
Chinese partner also in January. And Getrag (Jiangxi) Transmission Co
Ltd, a China-Germany JV between Getrag Corporate Group (Germany) and
Jiangling Motor Group (China), was founded in Nanchang City, East China's
Jiangxi Province in February, each holding 66.7 and 33.3 percent
respectively.
In addition, Spain's NB-BECO and America's Lear also set up JVs in the
first quarter of 2007. Only Honda will build a solely-invested factory in
Foushan City, South China's Guangdong Province. It is said the JV between
Honda and Dongfeng Motor Corporation can not produce a higher level auto
parts.
Experts said those foreign auto parts companies have realized the
importance to cooperate with local brands after two years of operations
in China.
In March, Eaton Corporation, one of the world's leading diversified
industrial manufacturers, signed an agreement with Huazhong University of
Science and Technology to co-develop auto mechanical technology.
Germany's Mann opened its first global franchised outlet in Shanghai and
Honeywell also launched three direct-selling auto maintenance centers in
Shanghai.
Related readings:
China outlines five-year program for auto parts
Delphi to build new half-shaft plant Auto parts giant to double
investment in China
Bosch recently launched its nationwide Bosch Diesel Partner project
aiming to recruit 100 dealerships in six regions. The program will
develop an integrated and extensive service network in China to tap into
booming diesel technology.
Bridgestone, a global tire provider, decided to open at least 100 tire
shops in China annually after 2007 to raise its market share to 20
percent from the current 15 percent.
Statistics show that Bosch plans to increase its purchases to one billion
euros in 2007, compared with 300 million euros in 2006. Currently, Bosch
has purchased printing circuit boards and other auto parts, and it may
develop qualified mechanical auto parts suppliers as its next step.
Visteon Corporation, a global automotive supplier, said it will increase
the number of purchases in the coming years, especially that of electric
products by 30 percent. Sources said Visteon��s purchasing quantity in
China accounts for 20 percent of its global total and it will build a
strong sales group in China as well.
(For more biz stories, please visit Industry Updates)
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