Part one of this two-part series discusses on the factors that make the city a key hub for vehicle parts.
Backed by a mature industrial chain, Wenzhou in Zhejiang province is one of the top sources of vehicle parts in China. The city manufactures about 3,000 types of components and assemblies. An estimated 20 percent of the annual production is shipped overseas every year, while another 20 percent goes to domestic carmakers. The aftermarket absorbs the rest.
The presence of several vehicle makers in the city and nearby areas enables suppliers to develop a new model within 30 days. Among the car manufacturers with factories in Wenzhou are China Yunding Holdings Group and Zhong-ou International Group. The first concentrates on medium and heavy automobiles, while Zhoung-ou offers upscale business cars.
A number of overseas-based auto companies such as Mercedes-Benz, BMW, Volkswagen, Ford, Toyota and Honda also have 4S shops within the vicinity.
Raw materials and components are readily available. Besides local providers, Wenzhou auto parts suppliers can access industrial clusters in Shanghai, Jiangsu province and other hubs in the Yangzhou River Delta region through the efficient transport infrastructure.
The local government has supported the development of the automotive sector through several policies and programs. For one, it helps enterprises connect with international counterparts and overseas vehicle makers via trade shows and exhibitions. In 2010, local authorities organized for representatives of 100 companies to visit car manufacturers in Germany. Auto parts suppliers are leveraging locational advantages to expand their presence at home, where vehicle consumption is growing. Besides supplying the aftermarket, many are hoping to enter or penetrate further the OE segment by 2015.
A number are also building on the logistical edge they enjoy to move into higher-value production. Branding will be a key strategy in this shift upmarket.
Click here to read the complete article on Global Sources.
Note: This article "Wenzhou vehicle parts suppliers capitalize on industrial chain" was originally
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.