China has not had a five-year plan in recent history that did not have a strong focus on automobile production, and they have remained the world’s top producer and consumer for more than a decade. It is natural that they would want to continue that dominance in this new era of automotive development. They are now into the second iteration (2021-2035) of their New Energy Vehicle Industry Development Plan, and they are plowing ahead. Opportunities abound – not just in vehicle production but, naturally, in auto parts as well. For stats and data, read on.
China’s 14th Five-Year Development Plan (2021-2025), like the five-year plans before it, contains an aggressive roadmap for China’s automotive industry.
On top of that, the New Energy Vehicle Industry Development Plan (2021-2035) aims at significantly enhancing China’s new energy vehicle (NEV) market competitiveness to meet the future demand for autonomous, connected, electrified, and shared mobility.
The NEV plan focuses on key technologies, such as batteries, drive motors, and vehicle operating systems. It sets a target for NEVs to reach 20% of total sales of new vehicles by 2025. For more, see the International Council on Clean Transportation’s (ICCT) update summary here.
China has been the world's largest automobile producer and consumer since 2009. Last year, China produced more than 26 million vehicles. Of these, 3.5 million were EVs, with a YOY increase of 160%.
Of course, this volume of vehicle production brings huge opportunities to China’s automotive parts and components industry, which consists of approximately 14,000 companies.
In 2021 the annual business revenue of the auto parts industry in China was estimated to be $817 billion, and the China Association of Automobile Manufacturers (CAAM) reported the auto parts sector’s compound annual growth rate as 7.2%, higher than vehicle production itself.
China’s auto parts industry developed along with vehicle OEMs and located themselves in nearby cluster-type developments to streamline the supply chain. After years of development, China has formed six auto parts industry clusters: in the Northeast; in the Beijing-Tianjin-Hebei triangle; in the Central region; in the Southwest; in the Pearl River Delta area; and in the Yangtze River Delta area.
Among those six major industrial clusters, the output value accounts for about 80% of the total auto parts industry in China.
Some top domestic players are the Wei Cai Group in Shandong Province, the Joyson Group in Zhejiang, CATL in Fujian, GAC Parts in Guangdong, and Zhong Ce Rubber in Zhejiang.
For more information, please contact Fred Qian at fredqian@AMTchina.org.
