Unfazed by the global meltdown, Chinese parts auto parts industry reports record growth. By Bertel Schmitt, CEO Sinamotive Group (HK) Limited.

While markets all over the world tank, while auto maker flirt with bankruptcy, the Chinese auto parts industry goes full steam ahead. In the first seven months of 2008, China’s auto-parts exports skyrocketed by 34.9% year on year (y/y) to $8.88 billion, says a report released by China’s Customs Bureau

China exported $ 8.73 billion worth of auto-parts from January to July 2008.

Foreign invested companies and joint ventures exported $4.56 billion auto-parts, up 31.6% y/y, accounting for 51.4% of the total.

Who likes Chinese auto parts the best? The U.S., EU and Japan. The U.S.A. sourced parts for $2.69 billion ( 8.8%), Europe imported parts for $1.6 billion ( 39.2%), Japan acquired parts for $1 billion ( 36.8%). These three markets alone gobbled up 59.6% of the total value of China’s Jan-Jul auto parts exports.

This validates the predictions made by our company in previous months:

1.) The parts market is recession-proof. Especially when targeted at after sales. People hang on longer to their cars. Wear and tear results in more parts bought.

2.) More and more Chinese parts go to Europe. Export growth to the U.S.A. is diminishing.

3.) The most powerful drivers of this growth are foreign companies. They use China for low cost production base, they sell the product under their own brand name at high margins, and all too often they complain about cheap Chinese imports.

4.) Falling raw material prices and sinking shipping costs give reason to expect further sales increases, especially to the after sales sector. The OEM segment may also absorb even more Chinese parts. More and more auto makers aim to off-set their lower sales with lower cost parts, sourced in China.

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