What Are the Advantages of China Auto Parts Supplier？

In today&#;s competitive global market, finding reliable and high-quality auto parts suppliers is essential for wholesalers and auto parts companies. One country that has emerged as a global leader in this industry is China. With advanced manufacturing techniques, cost-effective solutions, and a focus on quality control, Chinese manufacturers have become the go-to source for automotive parts around the world.

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In this article, we&#;ll explore the reasons why Chinese factories have gained such a strong reputation and why they are the best choice for auto parts sourcing.

 

Why Chinese Manufacturers Are the Best Choice for Auto Parts Sourcing

 

1. High-Quality Manufacturing Standards
   Contrary to old misconceptions, Chinese manufacturers have significantly raised their quality standards over the years. Factories are equipped with state-of-the-art technology, automated production lines, and a skilled workforce. Many Chinese factories comply with international quality standards like ISO certifications, ensuring that the parts produced meet the rigorous demands of global auto markets. NEW RETECH, for example, only partners with trusted manufacturers that pass all quality control tests, offering genuine warranties on every part.
2. Cost-Effective Production
   One of the key reasons wholesalers and companies prefer Chinese-made auto parts is the cost-effectiveness. With lower labor and production costs compared to Western countries, Chinese manufacturers can offer competitive pricing without compromising on quality. This allows businesses to maintain healthy profit margins while still offering their customers top-quality parts. When you source from China, you get access to economies of scale, where larger orders yield even better prices, a crucial benefit for auto parts distributors.
3. Vast Range of Products
   Whether you&#;re looking for engine components, suspension systems, or electronic parts, Chinese manufacturers offer an extensive range of automotive parts. From the smallest screws to major engine parts, they produce it all. This allows wholesalers to get everything they need from a single source, streamlining the procurement process and reducing shipping costs. Companies like NEW RETECH specialize in selecting the best-performing parts for American vehicles like Ford, Dodge, and Chevrolet, ensuring that your customers have access to reliable parts for their favorite car brands.
4. Advanced Technology and Innovation
   Chinese factories have invested heavily in research and development to stay at the forefront of technological advancements. This has led to improved manufacturing processes, better materials, and cutting-edge products that meet the needs of modern vehicles. From hybrid and electric vehicle components to smart car technologies, Chinese manufacturers are leading the way in providing parts for the next generation of vehicles. As a buyer, you benefit from innovative products that keep your business ahead of the competition.
5. Customization and Flexibility
   Chinese manufacturers are highly flexible and can customize products to meet specific client requirements. This is especially important for wholesalers looking to offer unique or specialized parts that aren&#;t readily available in the general market. Whether it&#;s adjusting design specifications or creating custom packaging and branding, Chinese factories are capable of tailoring their products to meet specific market needs. At NEW RETECH, we work closely with our manufacturing partners to ensure that every product is made to the exact specifications our clients require.
6. Quick Turnaround Time & Global Shipping
   Chinese manufacturers are known for their efficient production timelines. With streamlined processes and the ability to handle large orders, they can fulfill bulk orders quickly, ensuring you get the parts you need on time. Additionally, China&#;s well-developed logistics and shipping infrastructure ensures smooth and reliable global shipping. Whether you're based in North America, Europe, or any other region, you can rely on prompt delivery of your parts. At NEW RETECH, we ensure that our parts are shipped worldwide, meeting the demand of businesses across the globe.

 

How to Ensure You&#;re Choosing the Right Manufacturer

While Chinese manufacturers offer many advantages, it&#;s important to work with reliable partners to ensure the quality and authenticity of the products you receive. Here are a few tips to help you select the best supplier:

• Check for Certifications: Make sure the manufacturer complies with international quality standards like ISO or IATF for automotive parts.
• Request Samples: Always request product samples before placing large orders to verify the quality firsthand.
• Research the Factory&#;s Reputation: Look for testimonials, customer reviews, and case studies from other clients who have worked with the manufacturer.
• Partner with a Trusted Distributor: Companies like NEW RETECH have years of experience working with the best Chinese manufacturers, ensuring you receive only high-quality, tested parts with genuine warranties.

 

Conclusion: Why China is the Right Choice for Auto Parts Sourcing

In conclusion, sourcing auto parts from Chinese manufacturers offers numerous benefits, including high-quality production, cost-effective pricing, a vast product range, and the ability to meet your specific needs with customized solutions. For wholesalers and auto parts companies looking to stay competitive, China remains the best option for securing reliable and affordable parts.

At NEW RETECH,  we partner with top-tier Chinese factories to ensure that our clients receive only the best. If you&#;re in the market for premium auto parts for American vehicles, get in touch with us today to discuss how we can help you source the highest quality parts at the best prices.

 

The Executive briefing sessions, covering smart electrification and carbon neutrality, sustainable mobility and E-mobility technology ecosystem are available on demand.

The global automotive supply chain is concentrated in China because of several inter-connected reasons:

1.     China is the world&#;s second-biggest automotive market &#; Light vehicle sales in China average around +20% YTD in compared to , totaled 26.9 million car units vis-à-vis YTD light vehicle sales in the United States at 19.2 million units.  The IHS Markit Global Auto Demand Tracker (Figure 1) shows that total sales in Greater China and the United States as of August YOY is US$ 60 billion and US$ 62 billion respectively.

Figure 1 Global Auto Demand Tracker

China is already the world&#;s largest market for electric vehicles by a clear margin when compared to Europe and the United States (Figure 2). The country&#;s Li-ion battery production accounts for 50% to73% of global EV battery manufacturing capacity[3] and half of the global production[4]. The size of the market has attracted start-up companies to enter the country&#;s automotive industry. By the end of , IHS Markit data showed that China had over 480 start-ups in the automotive sector by registration. Irrespective of the longevity of these start-ups, they contribute to the supply chain demand and innovation around it. In the new era of &#;AutoTech&#; &#; the merging of electric, autonomous vehicles with ride-hailing creates a radically different car economy over the next couple of decades. In-car software and semiconductor products are widely expected in the market to make up most car costs by .

Figure 2: Electric Vehicles stock by region

2.     China has incentives and favorable policies for new energy vehicles (NEV) According to the U.S. International Trade Commission, China was the United States&#; second-largest source of automotive parts imports (after passing Canada in ), accounting for nearly twice the share of U.S. auto parts imports (three times the value) that it accounted for in . Many global automotive brands, upstream suppliers, components manufacturers, and aftermarket parts companies, including joint ventures, have research and development and production facilities in China &#; highlighted in red in Figure 3. Some have established business relationships dated back to the s; others accelerated their local presence in the s.

Figure 3: The Global Automotive Supply Chain

There are favorable policies even before US-China trade tension intensifies as China has made moving up the global manufacturing value chain a fundamental objective and has designated the automotive sector as a core strategic industry almost ten years ago. The Chinese government provided supportive policies and subsidies for research and development, and battery and components under the - New Energy Automobile Industry Development Plan[5].

Further, the 14th Five-Year Plan (-)[6] emphasizes technology self-reliance and the environment as a priority, with China&#;s commitment to being carbon neutral by . New automobile technologies&#;new energy vehicles (&#;NEVs&#;) and intelligent connected vehicles (&#;ICVs&#;) alongside smart city planning &#; sit at the intersection of these strategic priorities. Though not explicitly stated, chip-making is deemed a key focus in the next five years, as China seeks to build up its domestic capacity.

After production shutdowns during the first half of due to the COVID-19 pandemic, vehicle output in Asia resumed slowly initially, affected by new safety protocols and training in those measures, and acceleration of supply chain reorganization, some shifted back onshore e.g., to the US, some shifted to other manufacturing locations e.g., South East Asia.

By the end of , disruptions to the supply of semiconductor chips to the automotive sector due to workers' absence from lockdown or &#;pingdemic&#;[7] started to emerge. At the time of publication of this article, supply shortage continues. This shall encourage China to become even more proactive in accessing materials that ensure components supply stability.

3.     China is a dominant player in smelting and refining batteries

Despite extraction activities that took place in diverse geographies, China dominates the mid-stream processes crucial to preparing materials for EV production[8] (Figure 4). In midstream, 80% of chemical refining is based in China, as well as 61% cathode and 83% anode production[9].

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Figure 4: Main Extraction and Refining Locations of Key Materials for Automotive Batteries

&#; Steelmaking and even natural rubber for tires

Over the last decade, investors committed to responsible investment have grown. The UN-backed Principles for Responsible Investment started in , has grown to 3,800 signatories with US$ 121 trillion assets under management in (Figure 5).  Signatories committed to the Principles need to submit annual reports to demonstrate how they have integrated environmental, social, and governance (ESG) considerations in their investment and active ownership activities.

Figure 5: Growth of UN-backed Principles for Responsible Investment

In the auto sector, investors focus not only on corporate governance, climate change, cleantech capacity, product safety and quality, air pollution, water, and waste management in their immediate operations. Increasingly, investors are taking a life cycle assessment (LCA) approach, taking into consideration sustainability issues in the supply chain and end-of-life management. This leads to more automotive companies committing to circular-by-design to improve the recyclability of materials and to limit the impact of extracting raw materials from nature.

China accounts for at least 55% of global steel emissions. Blast furnaces that use iron ore and coke produce around 90% of China's steel. This needs to change.  In August , CA100+ investors published Investors Expectations for the Steel Industry[10]. China has been building up its own scrap steel reserve as well as importing scrap steel, increasing the proportion of steel produced by the scrap-EAF process. This will accelerate.

About a fifth of all bovine leather produced globally is estimated to go into cars, with more than 60 million cars produced every year[11]. As more farms cut down forests to raise cattle, the sustainability of natural leather production has been raised as an ESG issue in the auto industry by investors.

Natural rubber often receives less attention than other commodities (e.g. timber, soy, palm oil), due to the nature of its production, which tends to be by smallholders via small-scale plantations or agroforestry systems. These methods of production are thought to have lower social and environmental impacts than large-scale monocultures. However, poor management practices and associated low productivity can lead to negative social and environmental impacts, including pollution, health issues, and poverty[12].

According to the Association of Natural Rubber Producing Countries, China was by far the world&#;s largest user of natural rubber in as original equipment manufacturers (OEMs) and after service manufacturers concentrate their production facilities in China (Figure 6)

Figure 6: Natural Rubber Producing Countries

Deforestation is not only linked to global climate adaption and mitigation, but also crucial to biodiversity and the the ecosystems, as well as to human rights in local communities, given that the auto sector is one of the top industries heavily reliant on natural rubber, palm oil, and leather products, which are the key drivers of global deforestation.

COP15 UN Convention on biological diversity, which has been delayed by a year due to the COVID19 pandemic, is expected to take place in October in Kunming, China[13]. Stakeholders of the biodiversity ecosystems have been working on improving the sustainable supply chain to support China&#;s leadership in these areas.

In , two years before the Forest Stewardship Council (FSC) published a position statement for companies that wish to source sustainable natural rubber, the China Chamber of Commerce of Metals, Minerals, and Chemical (CCCMC) had already been working with global partners such as the Organisation for Economic Co-operation and Development (OECD), World Resources Institute (WRI) and Global Reporting Initiative (GRI) and published a 62-page Guidance for Sustainable Natural Rubber[14]. As nature-based solutions become more mainstream for manufacturers and investors, an early mover in ensuring sustainable rubber is used in tires presents an advantage for companies with production in China both for the OEMs and after-service markets.

Meanwhile, we are delighted to see that innovative approaches to producing alternative materials for bovine leather have been successful e.g. vegan leather. With net zero and/or carbon neutral targets on the national agenda of global markets, including that of China, we expect increasing demand for automotive companies to offer more options that minimize the carbon footprint of the lifecycle of the auto sector.  

Conclusion

As highlighted in this article, the global dominance of China&#;s auto supply chain is the outcome of a combination of the size of the market, the range of choice of service providers, and favorable policies that sustain the long-term demand and prosperity of the industry.  

China has been focusing on smart city and charging infrastructure building as well as technology enhancement that increased automation, and hence reduce reliance on the labor force in automotive manufacturing processes as labor supply reduces and costs pick up. Geopolitical uncertainty and COVID19 may have encouraged companies to diversify their supply chain, either onshoring back to the United States or Europe, or split offshoring to South East Asia markets. This is likely to continue as a good practice for business risk management, but we expect China&#;s dominance in the EV market to continue in the short to medium term.

We are now a month away from COP15 biodiversity conference and two months away from COP26 climate change conference. We expect China to play a leading role in driving the NDC agenda together with other top emissions countries. Greener supply chain management will accelerate the progress to China&#;s carbon neutral target, and the global goal of sustainable development.

[4] IEA, Global EV Outlook , page 211.

[7] Pingdemic refers to workers being told not to go to work when they get &#;pinged&#; by COVID tracking app as they are ddmed to have been in touch with patients who contracted coronavirus. For more information: https://www.independent.co.uk/news/business/pingdemic-car-industry-staff-shortages-b.html

[8] International Energy Agency Global EV Outlook , page 173.

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