What Are the Advantages of China Auto Parts Supplier？

In the fiercely competitive realm of the global market, securing dependable and high-quality auto parts suppliers is imperative for wholesalers and auto parts companies. Among the most prominent players in this sector is China. Renowned for its cutting-edge manufacturing processes, affordable pricing, and a solid commitment to quality assurance, Chinese manufacturers have established themselves as a primary source for automotive parts on an international scale.

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This article will delve into the factors that have contributed to the growing reputation of Chinese factories and highlight the top reasons they represent the optimal choice for auto parts procurement.

 

Why Opt for Chinese Manufacturers for Auto Parts

 

1. Exceptional Manufacturing Quality
   Dispelling outdated notions, the quality standards of Chinese manufacturers have dramatically improved over the years. These factories are equipped with advanced technology, automated systems, and a proficient workforce. Numerous Chinese manufacturers adhere to respected international standards, such as ISO certifications, ensuring their products meet the stringent requirements of global automotive markets. For instance, NEW RETECH collaborates only with reputable manufacturers that have passed rigorous quality control assessments, providing genuine warranties for every component.
2. Affordable Manufacturing Costs
   The affordability of Chinese-made auto parts is a significant factor driving wholesalers and companies toward these suppliers. With lower labor costs and production expenses compared to Western nations, Chinese manufacturers can deliver competitive pricing without sacrificing quality. This enables businesses to achieve substantial profit margins while still offering their customers high-caliber products. Sourcing from China opens doors to economies of scale, allowing larger orders to yield even more favorable pricing—a vital advantage for auto parts distributors.
3. Diverse Product Offerings
   Chinese manufacturers provide an extensive assortment of automotive parts, accommodating a variety of needs, from engine components and suspension systems to electronic parts. They manufacture everything, from minor screws to significant engine components, which allows wholesalers to fulfill their entire requirements from a single supplier. This streamlined procurement process minimizes shipping expenses. Companies like NEW RETECH focus on sourcing the best-performing parts for American vehicles such as Ford, Dodge, and Chevrolet, ensuring reliability for your customers' preferred car brands.
4. Innovative Technologies and Advancements
   Chinese factories have made substantial investments in research and development, placing them at the leading edge of technological improvements. This investment has resulted in enhanced manufacturing methods, superior materials, and cutting-edge products that satisfy the requirements of contemporary vehicles. From components for hybrid and electric vehicles to smart car technologies, Chinese suppliers are paving the way in offering parts for the future of transportation. As a buyer, you gain access to innovative solutions that position your business ahead of competitors.
5. Customization and Adaptability
   The flexibility of Chinese manufacturers allows them to tailor products to fulfill specific client needs. This adaptability is crucial for wholesalers aiming to stock unique or specialized parts not commonly found in the marketplace. Whether it involves modifying design specifications or creating custom branding and packaging, Chinese factories can significantly customize products to meet specific market demands. At NEW RETECH, we collaborate closely with our manufacturing partners to assure that every item meets our clients' precise standards.
6. Rapid Turnaround and Global Distribution
   Chinese manufacturers are recognized for their efficient production schedules. With streamlined capabilities to manage large orders, they can quickly fulfill bulk requests, guaranteeing timely delivery of necessary parts. Furthermore, China's advanced logistics and shipping networks ensure reliable global distribution. Regardless of whether your operations are in North America, Europe, or elsewhere, you can depend on prompt arrival of your products. At NEW RETECH, we are committed to worldwide shipping, catering to businesses around the globe.

 

Tips for Choosing Reliable Manufacturers

While the benefits of Chinese manufacturers are numerous, working with reliable partners is vital for ensuring the authenticity and quality of the products received. Here are some recommendations for selecting the best supplier:

• Verify Certifications: Confirm that the manufacturer meets international quality benchmarks such as ISO or IATF for automotive parts.
• Request Product Samples: Always ask for product samples prior to placing large orders to assess quality firsthand.
• Investigate the Manufacturer's Reputation: Seek testimonials, customer reviews, and case studies from previous clients who have partnered with the manufacturer.
• Collaborate with Trusted Distributors: Companies like NEW RETECH possess extensive experience working with top-tier Chinese manufacturers, guaranteeing only high-quality, tested parts with authentic warranties.

 

Final Thoughts: The Superiority of China for Auto Parts Sourcing

In summary, procuring auto parts from Chinese manufacturers yields a multitude of advantages, encompassing high-quality production, cost efficiency, an extensive product range, and the capacity to accommodate your unique requirements with customized solutions. For wholesalers and auto parts enterprises striving to remain competitive, China undoubtedly represents the most advantageous option for securing dependable and affordable parts.

At NEW RETECH, we partner with leading Chinese manufacturers to guarantee our clients receive only the highest quality products. If you seek premium auto parts for American vehicles, reach out to us today to explore how we can assist you in procuring top-tier components at optimal prices.

 

The Executive briefing sessions, covering smart electrification and carbon neutrality, sustainable mobility and E-mobility technology ecosystem are available on demand.

The global automotive supply chain is concentrated in China because of several inter-connected reasons:

1.     China is the world's second-biggest automotive market ' Light vehicle sales in China average around +20% YTD in compared to , totaled 26.9 million car units vis-à-vis YTD light vehicle sales in the United States at 19.2 million units.  The IHS Markit Global Auto Demand Tracker (Figure 1) shows that total sales in Greater China and the United States as of August YOY is US$ 60 billion and US$ 62 billion respectively.

Figure 1 Global Auto Demand Tracker

China is already the world's largest market for electric vehicles by a clear margin when compared to Europe and the United States (Figure 2). The country's Li-ion battery production accounts for 50% to73% of global EV battery manufacturing capacity[3] and half of the global production[4]. The size of the market has attracted start-up companies to enter the country's automotive industry. By the end of , IHS Markit data showed that China had over 480 start-ups in the automotive sector by registration. Irrespective of the longevity of these start-ups, they contribute to the supply chain demand and innovation around it. In the new era of 'AutoTech' ' the merging of electric, autonomous vehicles with ride-hailing creates a radically different car economy over the next couple of decades. In-car software and semiconductor products are widely expected in the market to make up most car costs by .

Figure 2: Electric Vehicles stock by region

2.     China has incentives and favorable policies for new energy vehicles (NEV) According to the U.S. International Trade Commission, China was the United States' second-largest source of automotive parts imports (after passing Canada in ), accounting for nearly twice the share of U.S. auto parts imports (three times the value) that it accounted for in . Many global automotive brands, upstream suppliers, components manufacturers, and aftermarket parts companies, including joint ventures, have research and development and production facilities in China ' highlighted in red in Figure 3. Some have established business relationships dated back to the s; others accelerated their local presence in the s.

Figure 3: The Global Automotive Supply Chain

There are favorable policies even before US-China trade tension intensifies as China has made moving up the global manufacturing value chain a fundamental objective and has designated the automotive sector as a core strategic industry almost ten years ago. The Chinese government provided supportive policies and subsidies for research and development, and battery and components under the - New Energy Automobile Industry Development Plan[5].

Further, the 14th Five-Year Plan (-)[6] emphasizes technology self-reliance and the environment as a priority, with China's commitment to being carbon neutral by . New automobile technologies'new energy vehicles ('NEVs') and intelligent connected vehicles ('ICVs') alongside smart city planning ' sit at the intersection of these strategic priorities. Though not explicitly stated, chip-making is deemed a key focus in the next five years, as China seeks to build up its domestic capacity.

After production shutdowns during the first half of due to the COVID-19 pandemic, vehicle output in Asia resumed slowly initially, affected by new safety protocols and training in those measures, and acceleration of supply chain reorganization, some shifted back onshore e.g., to the US, some shifted to other manufacturing locations e.g., South East Asia.

By the end of , disruptions to the supply of semiconductor chips to the automotive sector due to workers' absence from lockdown or 'pingdemic'[7] started to emerge. At the time of publication of this article, supply shortage continues. This shall encourage China to become even more proactive in accessing materials that ensure components supply stability.

3.     China is a dominant player in smelting and refining batteries

Despite extraction activities that took place in diverse geographies, China dominates the mid-stream processes crucial to preparing materials for EV production[8] (Figure 4). In midstream, 80% of chemical refining is based in China, as well as 61% cathode and 83% anode production[9].

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Figure 4: Main Extraction and Refining Locations of Key Materials for Automotive Batteries

' Steelmaking and even natural rubber for tires

Over the last decade, investors committed to responsible investment have grown. The UN-backed Principles for Responsible Investment started in , has grown to 3,800 signatories with US$ 121 trillion assets under management in (Figure 5).  Signatories committed to the Principles need to submit annual reports to demonstrate how they have integrated environmental, social, and governance (ESG) considerations in their investment and active ownership activities.

Figure 5: Growth of UN-backed Principles for Responsible Investment

In the auto sector, investors focus not only on corporate governance, climate change, cleantech capacity, product safety and quality, air pollution, water, and waste management in their immediate operations. Increasingly, investors are taking a life cycle assessment (LCA) approach, taking into consideration sustainability issues in the supply chain and end-of-life management. This leads to more automotive companies committing to circular-by-design to improve the recyclability of materials and to limit the impact of extracting raw materials from nature.

China accounts for at least 55% of global steel emissions. Blast furnaces that use iron ore and coke produce around 90% of China's steel. This needs to change.  In August , CA100+ investors published Investors Expectations for the Steel Industry[10]. China has been building up its own scrap steel reserve as well as importing scrap steel, increasing the proportion of steel produced by the scrap-EAF process. This will accelerate.

About a fifth of all bovine leather produced globally is estimated to go into cars, with more than 60 million cars produced every year[11]. As more farms cut down forests to raise cattle, the sustainability of natural leather production has been raised as an ESG issue in the auto industry by investors.

Natural rubber often receives less attention than other commodities (e.g. timber, soy, palm oil), due to the nature of its production, which tends to be by smallholders via small-scale plantations or agroforestry systems. These methods of production are thought to have lower social and environmental impacts than large-scale monocultures. However, poor management practices and associated low productivity can lead to negative social and environmental impacts, including pollution, health issues, and poverty[12].

According to the Association of Natural Rubber Producing Countries, China was by far the world's largest user of natural rubber in as original equipment manufacturers (OEMs) and after service manufacturers concentrate their production facilities in China (Figure 6)

Figure 6: Natural Rubber Producing Countries

Deforestation is not only linked to global climate adaption and mitigation, but also crucial to biodiversity and the the ecosystems, as well as to human rights in local communities, given that the auto sector is one of the top industries heavily reliant on natural rubber, palm oil, and leather products, which are the key drivers of global deforestation.

COP15 UN Convention on biological diversity, which has been delayed by a year due to the COVID19 pandemic, is expected to take place in October in Kunming, China[13]. Stakeholders of the biodiversity ecosystems have been working on improving the sustainable supply chain to support China's leadership in these areas.

In , two years before the Forest Stewardship Council (FSC) published a position statement for companies that wish to source sustainable natural rubber, the China Chamber of Commerce of Metals, Minerals, and Chemical (CCCMC) had already been working with global partners such as the Organisation for Economic Co-operation and Development (OECD), World Resources Institute (WRI) and Global Reporting Initiative (GRI) and published a 62-page Guidance for Sustainable Natural Rubber[14]. As nature-based solutions become more mainstream for manufacturers and investors, an early mover in ensuring sustainable rubber is used in tires presents an advantage for companies with production in China both for the OEMs and after-service markets.

Meanwhile, we are delighted to see that innovative approaches to producing alternative materials for bovine leather have been successful e.g. vegan leather. With net zero and/or carbon neutral targets on the national agenda of global markets, including that of China, we expect increasing demand for automotive companies to offer more options that minimize the carbon footprint of the lifecycle of the auto sector.  

Conclusion

As highlighted in this article, the global dominance of China's auto supply chain is the outcome of a combination of the size of the market, the range of choice of service providers, and favorable policies that sustain the long-term demand and prosperity of the industry.  

China has been focusing on smart city and charging infrastructure building as well as technology enhancement that increased automation, and hence reduce reliance on the labor force in automotive manufacturing processes as labor supply reduces and costs pick up. Geopolitical uncertainty and COVID19 may have encouraged companies to diversify their supply chain, either onshoring back to the United States or Europe, or split offshoring to South East Asia markets. This is likely to continue as a good practice for business risk management, but we expect China's dominance in the EV market to continue in the short to medium term.

We are now a month away from COP15 biodiversity conference and two months away from COP26 climate change conference. We expect China to play a leading role in driving the NDC agenda together with other top emissions countries. Greener supply chain management will accelerate the progress to China's carbon neutral target, and the global goal of sustainable development.

[4] IEA, Global EV Outlook , page 211.

[7] Pingdemic refers to workers being told not to go to work when they get 'pinged' by COVID tracking app as they are ddmed to have been in touch with patients who contracted coronavirus. For more information: https://www.independent.co.uk/news/business/pingdemic-car-industry-staff-shortages-b.html

[8] International Energy Agency Global EV Outlook , page 173.

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