Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (256)	8/10/2003 10:34:24 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Parts Makers Thrive in China's Car Rush Sun August 10, 2003 02:56 PM ET By Ben Blanchard SHANGHAI (Reuters) - Guan Guohui's grimy factory on the dusty outskirts of the eastern city of Hangzhou churns out engine gadgets most drivers never see: a tiny but crucial cog in a booming market. "Within three years this company will have tripled or quadrupled," the head of Guangchi Automobile Accessory Co. Ltd. boasted confidently. "China's car market is exploding." With car purchases seen leaping about 30 percent annually over coming years, production is racing ahead and spurring demand for essential parts made by the likes of Honeywell International Ltd., Visteon Corp. and Delphi Corp. While auto makers such as Volkswagen and General Motors battle eroding margins, unfettered capacity expansion and intense competition, industry executives say parts makers seem to be riding the crest of the auto boom. But analysts warned manufacturers might seek to pass on lower margins to suppliers -- as is happening elsewhere in the world -- while others such as Ford Motor Co or Volkswagen AG have made no secret of their intention to ramp up local buying. "China is the shining star," Delphi spokesman Jay Jiang told Reuters on Thursday. "The global market is flat or going downward but the whole Asia Pacific for Delphi is growing so fast." That's why the world's largest auto parts supplier has chalked up average annual sales growth of 30 percent in China over past years, a sustainable pace, although last year's $700 million from China is a fraction of its $27.4 billion globally. "The China market has the most potential for our future growth," Jiang said at his office in China's commercial hub. Chinese car output doubled to 903,400 in the first half of 2003 and is on track to hit two million for the year. Other beneficiaries of this rapid expansion include Schneider Electric, GKN Plc., Siemens AG and Tomkins Plc., JP Morgan said in a July report. "The automotive industry...is our fastest growing industry," Siemens' China chief Ernst Behrens told Reuters on Wednesday. reuters.com