Chinese Auto Parts is World’s Most Profitable Vehicle Industry

The automotive parts industry in China has reportedly become the world’s most profit making

industry of its kind. According to a survey report produced by AlixPartners, the profits of auto parts

enterprises in China topped its counterparts in 2009. Average profit levels were 8 – 10 per cent,

which is apparently double the global average. In 2009, the revenue of auto parts enterprises in

China is said to have reached 1,140 billion yuan, an increase of 23 per cent over 2008. However,

supplier sales are said to have lagged behind the OEM growth because of a higher decline in

exports.  Several major domestic auto-parts suppliers are emerging as winners, with companies

entering the top 100 global suppliers by revenue.

However, says the study, in order to maintain their profitability, suppliers need to effectively

manage rising cost pressures, upgrade their technology, build their aftermarket capabilities and,

significantly, find ways to recruit and retain qualified people in what has become a very competitive

labour market.