"We have started a number of own-brand cars in China to provide design solutions and complete sets of parts." Foreign R & D center in Shanghai a person, it raises foreign parts business competing R & D center in China to establish the true intentions - not only Joint venture vehicle for the provision of product development and technical services, and the tentacles extended to the local car companies. In order to quickly enter the Chinese market support, reduce product costs, research and development necessary to implement localization. Thus, in the past the cost advantage of local parts and components enterprises will face severe challenges.

Procurement volume in China surged
Bosch has announced in 2007 plans to substantially increase the procurement volume in China from 2006 to about 300 million euros for the procurement of 2007 increased to 1 billion euros. It is reported that Bosch' s total annual budget for the procurement is 20 billion euros; at present, China has purchased a printed circuit board and electrical and mechanical components. In addition, Bosch has found a qualified domestic ball bearings and rubber parts supplier, the next purchase goal is machinery parts and components suppliers.

Visteon also announced that the next few years will increase procurement volume in China, including electronic products will increase by 30 percent. It is learnt that Visteon now accounts for procurement in China to the global procurement of 20 percent, including procurement of local suppliers in China, a joint venture suppliers, the global supplier in China, and other subsidiaries. Preferred to wholly-owned by the joint venture in China, the establishment of regional research and development centers, increased procurement in China, and parts and components industry of foreign capital "changes" to the development of the industry is obviously good news. However, should also see that those designed to enhance the localization of foreign capital through the market competitiveness of the company's initiatives, but also has caused tremendous pressure to local enterprises.

Statistics show that currently, foreign cars occupy parts of the market share of more than 80 percent in automotive electronics and engine parts, and other high-tech content areas, foreign-controlled enterprises is as high as 90 percent.

"China's overall competitiveness of the parts business was a declining trend." Chen Guangzu, member of China Automobile Industry Advisory Committee said, China-made parts and components enterprises have very little can be done simultaneously with the vehicle research and development, before the R & D capability is not strong; low technology content has not been effectively resolved. High-end electronic control, fuel injection systems, steering systems, sensors, brake system and other products in the market, and both were monopolized by foreign enterprises. In the low-end manufacturing, more and more foreign brands landing in China, the same has caused tremendous competitive pressure.