Automotive News - 2008 Guide to China's Auto Market - (Page 30)

30 SUPPLIERS Low volumes per model also plagued suppliers as new models continued to drive sales in China in 2007. Low production runs made it harder for auto manufacturers and suppliers to achieve economies of scale. The continued growth of Japanese brands, especially Toyota, made 2007 a tough year for some suppliers, said Todd Fortner, president of Changshu Automotive Trim Co. “If you’re not already a Japanese supplier, it’s very hard to get into their supply chain,” he said. Suppliers don’t expect much relief in 2008. Upward pricing pressure will remain, although Valeo’s Marsais expects the prices of some raw materials to stabilize. Oil prices will keep rising, though. And, suppliers figure, domestic inflation will force the Chinese government to allow the yuan to appreciate faster. — Alysha Webb Suppliers face rising prices, shortage of skills China’s auto market grew by double digits in 2007, but that didn’t shield suppliers from the same issues dogging suppliers worldwide: rising raw material and energy prices. And as costs rose, car prices in China continued to decline. “We had a raw material effect that we had to pass to the OEMs. That was a real challenge,” said Christian Marsais, group vice president of China for Valeo SA. Suppliers also faced rising labor prices in China and a shortage of experienced managers and engineers. The shortage was caused by limited supply and strong demand. Barely a month passed in 2007 without a foreign supplier announcing it was adding a new plant or opening a research and engineering center. For suppliers looking to source parts in China for export, the yuan’s appreciation hurt. Long pegged at about 8.3 to the Suppliers in China ■ For a list of global automotive suppliers in China, go to: autonews.com/ chinasuppliers To have your company included on the list, send an e-mail to: andatacenter@ crain.com ■ MARK RALSTON/AFP/GETTY IMAGES/NEWSCOM WORKERS PREPARE FOUR-CYLINDER ENGINES AT A PLANT IN WUHU, CHINA. dollar, the yuan’s value began to float in July 2005. The pace accelerated in 2007, when it appreciated 7 percent against the dollar. That made it more expensive for overseas customers to buy parts made in China. In mid-March, the dollar traded for 7.1 yuan. Is Y our Company Maximizing its Potential in China? Real industry expertise is developed on the ground, over time. J.D. Power and Associates has tracked automotive and consumer developments in China from ofﬁces in Beijing and Shanghai since 1994. We understand the trends and players in that complex environment. J.D. Power provides the knowledge, solutions and insight that your company needs to compete in the world’s fastest-growing automotive market. Quality and Satisfaction Research Proprietary Custom Research • Forecasting Consulting • Training For more information, contact: Ms. Merry Yu J.D. Power and Associates China Tel. +86 21 2208-0808 Email: merry_yu@jdpower.com.sg Mr. Tim Dunne J.D. Power and Associates Tel. +1 805 418-8848 Email: tim.dunne@jdpa.com A Global Marketing Information Firm Los Angeles • New York • Detroit • Toronto • London • Munich • Tokyo • Singapore • Sydney • Shanghai • Beijing • Bangkok www.jdpowerchina.com.cn http://www.autonews.com/chinasuppliers http://www.jdpowerchina.com.cn http://www.jdpowerchina.com.cn http://www.jdpowerchina.com.cn

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