January-February 2011, Shandong Port auto parts export value increased by 29%

According to the statistics of Qingdao Customs, the export value of auto parts in Shandong Port during the first two months of 2011 was US$360 million, which was an increase of 29.2% over the same period of 2010 (below).

I. The main features of the export of automobile parts in Shandong Port in the first 2 months

(a) The value of exports hit a record high in January and fell sharply in February. In January, the export value of auto parts in Shandong port was 230 million U.S. dollars, and the monthly value of its export value reached a record high, a year-on-year increase of 55.6%. In February, affected by factors such as the Spring Festival holiday, exports were 120 million U.S. dollars, down 2.3%, and down 47.6% from the previous period.

(b) Exports are mainly traded in general, and processing trade exports have increased substantially. In the first two months, Shandong Port exported 280 million U.S. dollars worth of auto parts, an increase of 23.8%, accounting for 78.7% of the total value of auto parts exports at the port of Shandong during the same period, and exported 70 million U.S. dollars, an increase of 48.4%.

(3) Foreign-invested enterprises are the main exporters. In the first two months, foreign-invested enterprises in Shandong port exported 230 million US dollars of auto parts, an increase of 30.6%, accounting for 63.6% of the total value of exports; private enterprises exported US$80 million, an increase of 30.5%; state-owned enterprises exported US$0.3 billion, an increase of 29.5%; Collective enterprises exported 0.2 billion U.S. dollars, an increase of 9.3%.

(D) The main export markets are the United States and the European Union. In the first two months, Shandong Port exported US$140 million and US$0.9 billion, respectively, to the United States and the European Union, with an increase of 30.7% and 40.3%, respectively, which accounted for 64% of the total export value. Exports to South Korea amounted to US$0.2 billion, a decrease of 5%.

II. Main reasons for the increase in export value of auto parts at Shandong Port in the first 2 months

(A) The pull of the international market demand is picking up. According to a report from the American car dealer JDPower, the global car sales volume reached 72 million in 2010, breaking the 70 million record set in 2007 before the economic downturn led to the decline in car sales, and forecasting the 2011 global small car Sales volume will grow by 6% to 76.5 million vehicles [1]. The warming of the global automotive market has strongly boosted the demand for auto parts.

(b) China's auto parts industry has successfully entered the global procurement system. After China's accession to the WTO, China's auto parts exports maintained rapid growth. According to statistics, from 2000 to 2005, the average annual growth rate of China's auto parts exports was 54.4%, which significantly exceeded 29.5% of the growth rate of parts and components imports [2]. Multinational auto parts and components companies have established auto parts procurement centers in China to increase procurement efforts. Some large auto companies often purchase billions of dollars worth of parts in China in one year. China has become the world's fourth largest producer and exporter of auto parts after the United States, Japan, and Germany.

Third, the current major issues facing China's auto parts exports and related recommendations

The first is that high-end components are controlled by foreign capital and lack core competitiveness. Despite the rapid development of domestic vehicle companies in recent years, the lack of strong domestic parts and components companies as strategic partners, almost all high-end parts and components companies are wholly foreign-owned and holding companies. At present, 90% of the domestic parts and components companies' market share and manufacturing capacity are concentrated in low-end products, while the remaining 10% of domestic-funded enterprises involved in high-end products have also entered into joint ventures with foreign companies [3]. The problem of weak self-brand strength and lack of key component technologies is very serious, and it cannot meet the needs of the international and domestic markets. For China's auto parts companies, constantly improving their own R&D capabilities and overcoming the technical bottlenecks of high-end parts and components are at the core of improving international competitiveness.

Second, exchange rate appreciation and rising labor costs have pushed export profits. Low prices have always been a winning weapon for China's auto parts exports. The gross profit of most domestic small and medium auto parts companies is only 3%-5%, and the recent continuous appreciation of the renminbi and rising labor costs will cause many companies to face zero profit risks.

Third, China's spare parts overseas brands have not yet been formed. In the European, American, and Japanese markets, brands represent quality and high prices are often equated with high quality. International auto parts giants such as Bosch and Michelin are able to skillfully apply various marketing techniques to obtain high profits. Although China's spare parts enterprises have already had brand awareness, they have not yet created a first-rate brand that is recognized by the international market.

Suggestions for this: First, increase research and development efforts to overcome the technical bottlenecks of key parts and components, get rid of key passive parts subject to people's passive situation; Second, build Chinese auto parts brands, improve the quality of export products, and maintain the overseas image of Chinese auto parts; It is an opportunity to rationally use the international and domestic markets and seize the rapid development of the domestic market to further increase the international market development efforts.

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