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THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY  CHINA Fact Pack Swedish Trade Council in China 2006
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Co...
<ul><li>The total turnover of the Chinese manufacturing industry is SEK 15,107 billions. </li></ul><ul><li>the Swedish man...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passen...
THE CHINESE SALES OF CARS AND COMMERCIAL VEHICLES TOTALS SEK 508 BILLION 2004 - the automotive industry grew more than 12 ...
5.8 MILLION VEHICLES ARE PRODUCED IN CHINA - 2.78 million passenger cars and over 3 million commercial vehicles VEHICLE MA...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passen...
THE PASSENGER CAR PRODUCTION IN  CHINA  IS  GROWING FAST   -About 4 million passenger cars were produced in 2005  <ul><li>...
THE  LARGEST PASSENGER CAR MANUFACTURERS MAKE THEIR  PURCHASE DECISIONS IN CHINA   Passenger Cars 6 largest companies for ...
THERE ARE AROUND 67 CAR MANUFACTURING PLANTS IN CHINA - FAW and SAIC produce the most Source: Magazine Automobil Produktio...
Source: STC analysis <ul><li>Global integration increases – more cooperation between foreign and Chinese players </li></ul...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passen...
LIGHT TRUCK PRODUCTION REACHES ALL TIME HIGH  - due to need for Chinese economic development  <ul><li>Light truck made up ...
THE LARGE ST  MANUFACTURERS  OF COMMERCIAL VEHICLES  MAKE ALL PURCHASE DECISIONS IN CHINA   - Sino Truk  and Volvo  partne...
CHINESE COMMERCIAL VEHICLES MANUFACTURERS ARE MOSTLY CONCENTRATED ALONG THE COAST AREAS Hong Kong The 7 largest commercial...
Source: STC <ul><li>It is estimated that China will have 20 more years of commercial car growth, with the rate to be 1.2-1...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passen...
THERE ARE  MORE THAN 100,000  AUTOMOTIVE SUPPLIERS IN  CHINA <ul><li>There are  more than 100,000  suppliers for the autom...
MANY OF THE LARGE T1 SUPPLIERS ARE LOCATED IN  EAST CHINA -  All major international players are present in China. Source:...
TIER 1 SUPPLIERS Danso, Tianjing, China Air conditioner 2,000 Danso HQ, Hangzhou, China Automotive components 30,000 Wanxi...
THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs -  All major international players are present in China. Faw-sihuan  Fa...
THERE ARE MANY T2 SUPPLIERS LOCATED IN  CHINA -  T2  Suppliers are mainly Chinese companies. Source:  China  Automotive As...
TIER 2 SUPPLIERS (1/2) HQ, Anhui, China Automotive Components 200 Zhongding  HQ, Hangzhou, China Automotive Components 128...
TIER 2 SUPPLIERS (2/2) HQ, Quanzhou, China Automotive Components 200 Torch Automotive Engines Automotive Components Busine...
THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS  -  T2 Suppliers are mainly Chinese companies. Great Wall Wuxi Weifu Gr...
Source: STC <ul><li>Almost all large international suppliers (according to the turnovers) are presented in China.  </li></...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Co...
THE CHINESE PRODUCTION OF CONSTRUCTION EQUIPMENT TOTALS ABOUT SEK 123 BILLION - the industry grew more than 8 % 2005 Lifti...
MORE THAN 266,000 CONSTRUCTION EQUIPMENTS  ARE PRODUCED IN  CHINA SOME TOP CONSTRUCTION EQUIPMENT MANUFACTURERS ROAD ( 45,...
THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE  COASTAL AREA  OF CHINA The 6 largest OEM construction equipmen...
MAIN CONSTRUCTION MANUFACTURERS CONCENTRATED IN THE SOUTHEAST COAST OF CHINA Xuzhou Construction Machinery Group.Inc China...
<ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Co...
SUPPLIERS OF CONSTRUCTION EQUIPMENT ARE  MAINLY  LOCATED  CLOSE TO ENGINEERING MACHINERY MANUFACTURERS Source: Parts and C...
SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY  (1/3) - All purchase decisions are made locally Source:  Company website...
SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY  (2/3) Source:  Company website HQ,  Jiangsu ,  China Door N/a XuZhou Yan...
Source:  Company website SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY  (3/3) HQ,  Tianjin ,  China Reducer and parts a...
THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE  COASTAL AREA  OF CHINA Source: Corporate websites and annual r...
Source: STC <ul><li>Market restructuring happens with the supervision from the government </li></ul><ul><li>Sanyi and Carl...
<ul><li>Overview German Manufacturing Industry </li></ul><ul><li>German Automotive Industry </li></ul><ul><li>German Const...
Source: STC RECOMMENDATIONS FOR MAKING BUSINESS WITH THE CHINESE AUTOMOTIVE INDUSTRY Recommendations for making business w...
<ul><li>Overview German Manufacturing Industry </li></ul><ul><li>German Automotive Industry </li></ul><ul><li>German Const...
HOW STC IN CHINA SUPPORT COMPANIES TO DO BUSINESS IN CHINA Partner search Sales Support Market Check Recruitments Supplier...
STC HAS HELPED NUMEROUS SWEDISH COMPANIES TO DO BUSINESS WITH THE  CHINESE  AUTOMOTIVE INDUSTRY Manufacturer of  brake sys...
STC CARRIED OUT A  POTENTIAL CUSTOMER SEARCH AND VISITING PROGRAM  FOR  SEMCON The overall objective of this assignment wa...
STC CARRIED OUT A   RECRUITMENT AND BUSINESS SUPPORT OFFICE (BSO) PROJECT  FOR  NEDERMAN The overall objective of this ass...
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Fakta om fordonsindustrin - CHINA

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  • GAIG fattas
  • Include Hafei, Changhe Suzuki
  • Include BAIC
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  • Transcript of "Fakta om fordonsindustrin - CHINA"

    1. 1. THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY CHINA Fact Pack Swedish Trade Council in China 2006
    2. 2. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    3. 3. <ul><li>The total turnover of the Chinese manufacturing industry is SEK 15,107 billions. </li></ul><ul><li>the Swedish manufacturing industry’s turnover is SEK 1,357 billions. </li></ul><ul><li>There are approximately 203 000 companies within the manufacturing industry in China </li></ul><ul><li>-56 million employees </li></ul><ul><li>The automotive industry has good growth prospects. The main reasons are low labour costs, expected quality improvements, low car ownership rates and a rapidly growing economy with increased personal incomes. </li></ul><ul><li>The average wage for an industry worker in China is SEK 5.2 per hour </li></ul>CHINESE MANUFACTURING INDUSTRY IS 11 TIMES LARGER THAN THE SWEDISH - the automotive sector has good growth prospects 5 largest manufacturing industries in China Billion SEK The automotive industry amount to 8 % of the total manufacturing industry Source: China statistical yearbook 2005, China Machinery Industry Federation, Automobile Component Industry Trends Report
    4. 4. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passenger Cars </li></ul></ul><ul><ul><li>Commercial Vehicles </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    5. 5. THE CHINESE SALES OF CARS AND COMMERCIAL VEHICLES TOTALS SEK 508 BILLION 2004 - the automotive industry grew more than 12 % 2004 Engines SEK 31 billion Special vehicles SEK 62 billion Accessories of automobiles and motorcycles SEK 182 billion Billion SEK Sales of automotive industry products in China Source: China Automobile Industry yearbook 2005, China Statistical Yearbook 2005 Cars and commercial vehicles SEK 508 billion Motorcycles SEK 64 billion The automotive industry has been growing steadily
    6. 6. 5.8 MILLION VEHICLES ARE PRODUCED IN CHINA - 2.78 million passenger cars and over 3 million commercial vehicles VEHICLE MANUFACTURERS <ul><li>7 manufacturers </li></ul><ul><ul><li>FAW Group Jie Fang </li></ul></ul><ul><ul><li>Shanghai Automotive Industry Corp (SAIC) </li></ul></ul><ul><ul><li>Chang’an </li></ul></ul><ul><ul><li>Dongfeng Motor Co. (DFM) </li></ul></ul><ul><ul><li>Beijing Automotive Industry Holding (BAIC) </li></ul></ul><ul><ul><li>Hafei </li></ul></ul><ul><ul><li>Changhe-Suzuki </li></ul></ul>LIGHT TRUCKS (1,150,000 vehicles) <ul><li>6 manufacturers </li></ul><ul><ul><li>FAW </li></ul></ul><ul><ul><li>SAIC </li></ul></ul><ul><ul><li>Chang’an </li></ul></ul><ul><ul><li>DFM </li></ul></ul><ul><ul><li>Xiamen King Long </li></ul></ul><ul><ul><li>Changhe-Suzuki </li></ul></ul>BUSES ( 1,170,000 vehicles*) HEAVY TRUCKS (700 000 vehicles*) <ul><li>7 manufacturers </li></ul><ul><ul><li>FAW </li></ul></ul><ul><ul><li>DFM </li></ul></ul><ul><ul><li>SAIC </li></ul></ul><ul><ul><li>China National Heavy </li></ul></ul><ul><ul><li>Duty Truck (JV Volvo) </li></ul></ul><ul><ul><li>BAIC </li></ul></ul><ul><ul><li>Shaanxi Automotive Group </li></ul></ul><ul><ul><li>Qing Ling Auto Group </li></ul></ul>COMMERCIAL VEHICLES (5,800,000 vehicles) PASSENGER CARS (2,780,000 vehicles) <ul><li>30 manufacturers </li></ul><ul><ul><li>FAW Group (JV,Volkswagen,Toyota) </li></ul></ul><ul><ul><li>SAIC (JV GM, Volkswagen) </li></ul></ul><ul><ul><li>Chang’an (JV Ford) </li></ul></ul><ul><ul><li>DFM (JV Nissan) </li></ul></ul><ul><ul><li>BAIC (JV Honda, BMW, Hyundai) </li></ul></ul><ul><ul><li>Guangzhou Automobile Industry Group (JV Honda & Toyota ) </li></ul></ul><ul><ul><li>Brilliance (JV BMW) </li></ul></ul>Source: (* STC’s estimation) National Economy Statistic Center China , China automotive industry Yearbook 2005 www.eiu.com,, www.chinabuses.com, www.globalautoindex.com, csm worldwide Many groups hold joint ventures with foreign players <ul><li>China’s vehicle production is projected to grow at 15% per annum to hit 8 million vehicles in 2008. </li></ul>
    7. 7. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passenger Cars </li></ul></ul><ul><ul><li>Commercial Vehicles </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    8. 8. THE PASSENGER CAR PRODUCTION IN CHINA IS GROWING FAST -About 4 million passenger cars were produced in 2005 <ul><li>Passenger car production grew up by ”million” for the last five years. </li></ul><ul><ul><li>More and more international automotive manufactures march into Chinses market by set up producion JVs with the Chinese manufacturers.( Volkswagen with FAW and SAIG, Honda and Toyato with GAIG, DFM and Nissan, Ford with ChangAn, etc.) </li></ul></ul><ul><ul><li>More private or collective capitals invested into automotive industry to manufacture self-owned brand automotives, such as: Chery, Great Wall and Geely,etc. </li></ul></ul>Passenger Car Production in China Development the last 5 years Vehicles Source: Report and Statistics from China Automotive Industry Association
    9. 9. THE LARGEST PASSENGER CAR MANUFACTURERS MAKE THEIR PURCHASE DECISIONS IN CHINA Passenger Cars 6 largest companies for passenger cars in China Source: Corporate websites Passenger cars Passenger cars Passenger cars Passenger cars Passenger cars Passenger cars Business HQ, Chongqing, China 28,000 Chang‘an Automobile HQ, Guangzhou, China 45,000 GAIG Guangzhou Automobile Industry Group Co.,Ltd HQ, Beijing, China 50,000 BAIC Beijing Automotive Industry Holding Co., Ltd HQ, Shanghai, China 63,000 SAIC Shanghai Automotive Industry Corporation HQ, Wuhan, Hebei Province, China 106,000 DFM Dongfeng Motor Corporation HQ, Changchun, Jilin Province, China 132,400 FAW Purchase decisions Employees Manufacturer
    10. 10. THERE ARE AROUND 67 CAR MANUFACTURING PLANTS IN CHINA - FAW and SAIC produce the most Source: Magazine Automobil Produktion, China Daily, www.globalautoindex.com, Corporate websites The 5 largest OEM car manufacturers in China 56,000 130,000 49,000 Chang’an Auto Chang’an Ford (Volvo) Suzuki Buses, Light Trucks, Cars Chongqing Jiangbei#1 Chongqing Bei Xin #2 Chongqing Yu Dong #3 Chang’an 267,000 160,000 387,000 85,000 General Motors Volkswagen Volkswagen/GM Chery Cars, Buses, Light Trucks Liuzhou #1,Shanghai #2 Shanghai I,II,III,IV #3-6 Yantai #7 SAIC 28,000 16,000 185,000 Beijing Jeep Beijing Futian Beijing Hyundai Cars, Light Trucks, Buses BDA #1 Beijing #2 Futian #3 Tianzu #4 (10 plants altogether) BAIC 57,000 15,000 95,000 42,000 102,000 Nissan,Renault Honda PSA Nissan Yudea-Kia Trucks, Buses, Cars Huadu #1 Wantong #2 Wuhan #3 Xiangfan #4 Yancheng #5 DFM 340,000 12,000 62,000 8,000 31,000 10,000 91,000 124,000 FAW car, Fengyue, Volkswagen, Audi Hainan Motor FAW Huatai Toyota Tianjin Huali Toyota Tianjin Xiali Cars, Buses, Heavy & Light Trucks Changchun #1 Changchun II #2 Haikou #3 Rongcheng #4 Tianjin Tanggu #5 Tianjin Lilou #6 Tianjin Mazhuang #7 Tianjin Zhong bei #8 etc FAW Models and focus Production volume Plant (Around 67 in total) Manufacturer
    11. 11. Source: STC analysis <ul><li>Global integration increases – more cooperation between foreign and Chinese players </li></ul><ul><li>Local protection is decreasing, but still existing </li></ul>R&D Market and Competition Globalization <ul><li>Market is optimistic, car sales is expected to grow at 5-7% annually till 2010 </li></ul><ul><li>Competition is tougher, with Japanese/Korean cars taking share from European/American cars </li></ul><ul><li>Locals are expected to grow fast, especially Chery and Geely </li></ul><ul><li>Most foreign R&D takes place offshore, due to the IPR issue </li></ul><ul><li>Local companies are spending a lot of efforts on R&D </li></ul>COOPERATION BETWEEN FOREIGN AND CHINESE PLAYERS IS INCREASING Trends within the Chinese passenger car industry
    12. 12. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passenger Cars </li></ul></ul><ul><ul><li>Commercial Vehicles </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    13. 13. LIGHT TRUCK PRODUCTION REACHES ALL TIME HIGH - due to need for Chinese economic development <ul><li>Light truck made up the main part of commercial vehicle production in the last 5 years. </li></ul><ul><ul><li>Steady Chinese economic growth have drawn the need for commercial vehicles, leads to the prodution growth. </li></ul></ul><ul><ul><li>Heavy truck and light truck production shrinked in 2005 because of the saturation of the market . </li></ul></ul><ul><li>. </li></ul>Commercial Vehicle Production in China Development the last 5 years Vehicles Source: Report and Statistics from China Automotive Industry Association
    14. 14. THE LARGE ST MANUFACTURERS OF COMMERCIAL VEHICLES MAKE ALL PURCHASE DECISIONS IN CHINA - Sino Truk and Volvo partner in making heavy trucks Commercial vehicles Source: Corporate websites HQ, Chongqing, China Light trucks buses 28,000 Chang ’ an Automobile Heavy trucks Light trucks. Busses Light trucks Tractors Buses Light truck, Heavy trucks Semi-trailer, Buses Heavy trucks Light trucks Buses Business HQ, Jinan, Shandong, China 24 ,000 SINOTRUK China National Heavy Duty Truck ( JV Volvo) HQ, Beijing, China 50,000 BAIC HQ, Shanghai, China 63,000 SAIC HQ, Wuhan, Hebei Province, China 106,000 DFM HQ, Changchun, Jilin Province, China 1 32 , 4 00 FAW Purchase decisions Employees Manufacturer
    15. 15. CHINESE COMMERCIAL VEHICLES MANUFACTURERS ARE MOSTLY CONCENTRATED ALONG THE COAST AREAS Hong Kong The 7 largest commercial vehicle OEM manufacturers in terms of produced units Source: Magazine Automobil Produktion, www.globalautoindex.com, Corporate websites 320,000 Dongfeng Trucks Launch of Nissan heavy trucks 2006 Hubei, Shiyan Wuhan Zhengzhou DFM 60,000 Volvo, Sinotruk Heavy Trucks Jinan China National Heavy Duty Truck 267,000 SAIC-GM Wuling Mini Bus and Mini Truck Liuzhou SAIC 118,000 Changhe Carry Bus and Carry Truck Jingdezhen Changhe-Suzuki FAW Jiabao Bus and Truck Songhuajing China-Italy Zhongyi Bus and Truck Chang’an Carry Bus and Truck Jiangling Light Truck Models and focus 121,000 Jilin FAW 241,000 Harbin Hafei 349,000 84,000 Chongqing Jiangbei Nanchang Chang’an Production volume Plant Manufacturer
    16. 16. Source: STC <ul><li>It is estimated that China will have 20 more years of commercial car growth, with the rate to be 1.2-1.5 times GDP </li></ul><ul><ul><li>Truck will double its sales in 10 years, although it’s at a low season currently </li></ul></ul><ul><ul><li>Bus is facing fierce competition from other alternatives – e.g. flights and trains </li></ul></ul>R&D Competition Market <ul><li>Few foreign investors has actively entered the market </li></ul><ul><ul><li>Volvo and Mercedes-Benz has investments on bus already </li></ul></ul><ul><li>Main competition comes from domestic companies, FAW and Dongfeng take main truck share </li></ul><ul><li>Local companies are spending a lot of efforts on R&D </li></ul>DOMESTIC COMPANIES ARE THE MAIN PLAYERS ON THE CHINESE MARKET - only Volvo and Mercedes have invested in China Trends within the Chinese commercial vehicle industry
    17. 17. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><ul><li>Passenger Cars </li></ul></ul><ul><ul><li>Commercial Vehicles </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    18. 18. THERE ARE MORE THAN 100,000 AUTOMOTIVE SUPPLIERS IN CHINA <ul><li>There are more than 100,000 suppliers for the automotive industry in China. </li></ul><ul><li>All the large automotive suppliers in the world (if you look at the turnover) are presented in China. </li></ul><ul><li>Automotive suppliers are mainly concentrated in location of East China. </li></ul><ul><li>All the foreign automotive suppliers are joint ventures with local companies due to legislation. </li></ul><ul><li>Local automotive suppliers’ products are mainly in the low-end markets. </li></ul>Geographical concentration of automotive suppliers Chinese automotive suppliers
    19. 19. MANY OF THE LARGE T1 SUPPLIERS ARE LOCATED IN EAST CHINA - All major international players are present in China. Source: China Automotive Association <ul><li>Cables, bus systems, embedded systems </li></ul><ul><ul><li>Bosch </li></ul></ul><ul><ul><li>Valeo </li></ul></ul><ul><ul><li>Siemens VDO </li></ul></ul><ul><ul><li>DENSO Corporation </li></ul></ul><ul><ul><li>Delphi </li></ul></ul><ul><li>Power train, exhaust systems, engines </li></ul><ul><ul><li>Bosch </li></ul></ul><ul><ul><li>FAWER* </li></ul></ul><ul><ul><li>Dongfeng </li></ul></ul><ul><li>Cockpit, seats, dash-board, air conditioning </li></ul><ul><ul><li>Visteon </li></ul></ul><ul><ul><li>Valeo </li></ul></ul><ul><ul><li>Delphi </li></ul></ul>TIER 1 SUPPLIERS Electrical systems Interior equipment Propulsion Body Running gear <ul><li>Body, roof, glass, doors, lighting etc. </li></ul><ul><ul><li>FAWER* </li></ul></ul><ul><ul><li>Visteon </li></ul></ul><ul><ul><li>FAWER*-sihuan </li></ul></ul><ul><li>Suspension, brakes, axles, steering, tires </li></ul><ul><ul><li>Bosch </li></ul></ul><ul><ul><li>Wanxiang </li></ul></ul><ul><ul><li>FAWER* </li></ul></ul>* FAWER is an affiliated corporation of FAW
    20. 20. TIER 1 SUPPLIERS Danso, Tianjing, China Air conditioner 2,000 Danso HQ, Hangzhou, China Automotive components 30,000 Wanxiang HQ, Changchun, China Automotive components 2,456 Fawer-sihuan HQ, Guangzhou, China Automotive Componets 1,700 Dongfeng Automotive components Interior Equipment Air conditioner Electric System Electric System Air conditioner Electric System Automotive components Business HQ, Changchun, China 15,000 Fawer HQ, Shanghai, China 300 Visteon HQ, Shanghai, China HQ, Shanghai, China 920 600 Delphi HQ, Shanghai, China 300 Siemens VDO Purchase office, Shanghai, China Purchase office, Shanghai, China 4,000 Valeo HQ, Shanghai, China 15,000 Bosch Location Employees Manufacturer
    21. 21. THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs - All major international players are present in China. Faw-sihuan Fawer Changchun Automotive Components Bosch Wuxi Automotive Diesel System Bosch Suzhou Automotive Components Bosch Shanghai Automotive Electric Valeo Shanghai Automotive Electric Denso Tianjing Shanghai Delphi Auto A/C Systems Delphi Shanghai Electric Systems Yianfeng Visteon Automotive Systems Shanghai Yanfeng Johnson Seats Wanxiang Group Valeo Hubei Automotive Air-conditioner Dongfeng Automotive Components Dongfeng Engines Siements VDO Automotive
    22. 22. THERE ARE MANY T2 SUPPLIERS LOCATED IN CHINA - T2 Suppliers are mainly Chinese companies. Source: China Automotive Association, Magazine Automobil Produktion <ul><li>Cables, bus systems, embedded systems </li></ul><ul><ul><li>Weifu Group </li></ul></ul><ul><ul><li>Guangdong Ruitu </li></ul></ul><ul><ul><li>Changxiang </li></ul></ul><ul><li>Power train, exhaust systems, engines </li></ul><ul><ul><li>Great Wall </li></ul></ul><ul><ul><li>Zhongding Group </li></ul></ul><ul><ul><li>Hangzhou Auto Engines </li></ul></ul><ul><li>Cockpit, seats, dash-board, air conditioning </li></ul><ul><ul><li>Weifu Group </li></ul></ul><ul><ul><li>Torch Automotive </li></ul></ul><ul><ul><li>Tianjing Huafeng </li></ul></ul>TIER 2 SUPPLIERS Electrical systems Interior equipment Propulsion Body Running gear <ul><li>Body, roof, glass, doors, lighting etc. </li></ul><ul><ul><li>Weifu Group </li></ul></ul><ul><ul><li>Dongfeng </li></ul></ul><ul><ul><li>Auto Parts </li></ul></ul><ul><li>Suspension, brakes, axles, steering, tires </li></ul><ul><ul><li>Torch Automotive </li></ul></ul><ul><ul><li>Dongfeng </li></ul></ul><ul><ul><li>Wanxiang Group </li></ul></ul><ul><ul><li>Jinfei Group 3000 </li></ul></ul>
    23. 23. TIER 2 SUPPLIERS (1/2) HQ, Anhui, China Automotive Components 200 Zhongding HQ, Hangzhou, China Automotive Components 128 Hangzhou Auto Engines Electric System Automotive Components Automotive Components Automotive Components Automotive Components Automotive Components Business HQ, Shanghai, China 600 Changxiang HQ, Tianjing, China 200 Tianjing Huafeng HQ, Guangzhou, China 300 Dongfeng Hubei Components HQ, Wuxi, China 300 Wuxi Weifu HQ, Baoding, China 700 Great Wall HQ, Jinhua, China 3,000 Jinfei Group Location Employees Manufacturer
    24. 24. TIER 2 SUPPLIERS (2/2) HQ, Quanzhou, China Automotive Components 200 Torch Automotive Engines Automotive Components Business HQ, Baoding, China 200 Great Wall HQ, Guangzhou, China 300 Auto Parts Location Employees Manufacturer
    25. 25. THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS - T2 Suppliers are mainly Chinese companies. Great Wall Wuxi Weifu Group Tianjing Huafeng Jinfei Group Changxiang Hangzhou Auto Engines Dongfeng Hubei Components Zhongding Group Torch Automotive Auto Parts Guangdong Ritu                                         
    26. 26. Source: STC <ul><li>Almost all large international suppliers (according to the turnovers) are presented in China. </li></ul><ul><li>Local protection still exists. </li></ul>R&D-displacement Competition and price reductions Globalization <ul><li>Foreign players are at medium-high end market. </li></ul><ul><li>Locals are taking main share, but at low end market </li></ul><ul><li>Local suppliers are spending efforts on updating their products. </li></ul><ul><li>International suppliers start to have R&D centers in China </li></ul>INTERNATIONAL SUPPLIERS MOVE R&D CENTERS TO CHINA - local suppliers still have the largest market share Trends within the Chinese Automotive supplier industry
    27. 27. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><ul><li>Manufacturers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    28. 28. THE CHINESE PRODUCTION OF CONSTRUCTION EQUIPMENT TOTALS ABOUT SEK 123 BILLION - the industry grew more than 8 % 2005 Lifting SEK 19.2 billion Earth Moving SEK 45.6 billion Road SEK 31.6 billion billion SEK Sales construction machinery in China Source: China Machinery Magazine Underground&Others SEK 28.6 billion Growth is mainly driven by domestic sales
    29. 29. MORE THAN 266,000 CONSTRUCTION EQUIPMENTS ARE PRODUCED IN CHINA SOME TOP CONSTRUCTION EQUIPMENT MANUFACTURERS ROAD ( 45,323 vehicles) <ul><li>5 manufacturers . </li></ul><ul><ul><li>Guangxi Liugong Machinery Co., Ltd </li></ul></ul><ul><ul><li>Xuzhou Construction Machinery Group.Inc </li></ul></ul><ul><ul><li>Shenyang North Traffic Engineering Company </li></ul></ul><ul><ul><li>China Infrastructure Machinery Holdings Limited </li></ul></ul><ul><ul><li>Xiamen Engineering Machinery Co., Ltd </li></ul></ul>Graders,Concrete Mixer, Asphalt Paver, Road Roller UNDERGROUND ( 4 , 989 vehicles) <ul><li>4 manufacturers </li></ul><ul><ul><li>Shenyang Heavy Machinery Group Co.,Ltd </li></ul></ul><ul><ul><li>Inner Mongolia North Heavy Industries Group </li></ul></ul><ul><ul><li>Changlin Company Ltd . </li></ul></ul><ul><ul><li>Shanghai Engineering Machinery Co ., Ltd </li></ul></ul><ul><li>Wheel loaders, Drills, Haulers, Pile Hammer </li></ul><ul><li>5 manufacturers </li></ul><ul><ul><li>Xuzhou Construction Machinery Group.Inc </li></ul></ul><ul><ul><li>Guangxi Liugong Machinery Co., Ltd </li></ul></ul><ul><ul><li>Xiamen Engineering Machinery Co., Ltd </li></ul></ul><ul><ul><li>Changlin Company Ltd. </li></ul></ul><ul><ul><li>China Infrastructure Machinery Holdings Limited </li></ul></ul>EARTH MOVING ( 136 , 664 vehicles) Excavators, WheelLoaders, Backhoe loaders , Skid steer loaders, Bulldozer LIFTING ( 79 , 262 vehicles) <ul><li>4 manufacturers </li></ul><ul><ul><li>Xuzhou Construction Machinery Group.Inc </li></ul></ul><ul><ul><li>Shenyang North Traffic Engineering Company </li></ul></ul><ul><ul><li>Guangxi Liugong Machinery Co., Ltd </li></ul></ul><ul><ul><li>Changlin Company Ltd. </li></ul></ul>Mobile cranes, Tower Crane, Forklifts, Truck-mounted Crane Source: National Development & Reform Commission, Construction Machinery Magazine, China Construction Machinery Association
    30. 30. THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE COASTAL AREA OF CHINA The 6 largest OEM construction equipment manufacturers in China Source: Corporate websites and annual reports HQ,Xiameng, Fujiang, Province HQ, Changzhou, JIangsu Province HQ, Shanghai HQ, Liuzhou, Guangxi Province HQ, Xuzhou, Jiangsu Province Purchase Decision 1893 1496 5150 7,500 20,000 Employee Total: 17050 Wheel loader Road roller Shanghai ; Longyan , Fujian province China Infrastructure Machinery Holdings Limited Total:10,000 Wheel loader Road Roller Grader Backhoe loader Crane Concrete paver Changzhou, Jiuangsu Province Changlin Company Ltd. Loader Roller Bulldozer Excavator Concrete pump Wheel loaders Skid steer loaders Backhoe loaders Excavator Rollers Motor Graders Paving Equipment Wheel loaders Truck cranes Motor graders Road rollers Road pavers Bulldozers Models and focus Total: 14,540 Xiamen, Fujian Province Xiamen Engineering Machinery Co., Ltd Total: 20,000 Liuzhou, Guangxi Province Guangxi Liugong Machinery Co., Ltd 10,000 10,000 3,000 8,000 1,000 500 Xuzhou, Jiangsu Province Xuzhou Construction Machinery Group.Inc Production volume Plant Manufacturer
    31. 31. MAIN CONSTRUCTION MANUFACTURERS CONCENTRATED IN THE SOUTHEAST COAST OF CHINA Xuzhou Construction Machinery Group.Inc China Infrastructure Machinery Holdings Limited Changlin Company Ltd. Xiamen Engineering Machinery Co., Ltd Guangxi Liugong Machinery Co., Ltd
    32. 32. <ul><li>Overview Chinese Manufacturing Industry </li></ul><ul><li>Chinese Automotive Industry </li></ul><ul><li>Chinese Construction Equipment Industry </li></ul><ul><ul><li>Manufacturers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    33. 33. SUPPLIERS OF CONSTRUCTION EQUIPMENT ARE MAINLY LOCATED CLOSE TO ENGINEERING MACHINERY MANUFACTURERS Source: Parts and Components Branch of China Construction Machinery Association <ul><li>Cables, bus systems, embedded systems </li></ul><ul><ul><li>Shanxi Sunland Automatic Control </li></ul></ul><ul><ul><li>Xi’an Kind Electrical Control Instruments </li></ul></ul><ul><ul><li>Shanghai Pal-fin Automatic Control Technology </li></ul></ul><ul><li>Power train, exhaust systems, engines </li></ul><ul><ul><li>Cummins </li></ul></ul><ul><ul><li>Hangzhou Advance Gearbox </li></ul></ul><ul><ul><li>Qidong Sanshang Electromechanical </li></ul></ul><ul><ul><li>Sichuan Gear Works </li></ul></ul><ul><ul><li>Torque Converter Shantui Construction Machinery </li></ul></ul><ul><ul><li>Zhejiang Linhai Machinery </li></ul></ul><ul><ul><li>Hubei Guanghua Transmission </li></ul></ul><ul><li>Cockpit, seats, dash-board, air conditioning etc. </li></ul><ul><ul><li>Zhejiang Tiancheng Seat </li></ul></ul><ul><ul><li>Shandong CAB </li></ul></ul><ul><ul><li>Fenghua Hearty Motormeters </li></ul></ul><ul><ul><li>Yuxin Automotive Air Conditioning </li></ul></ul><ul><ul><li>Hangzhou Nealley Vehicle Air Conditioning </li></ul></ul>SUPPLIERS Electrical systems Interior equipment Propulsion Body Running gear <ul><li>Body, roof, glass, doors, lighting etc. </li></ul><ul><ul><li>XuZhou YangSheng Machine </li></ul></ul><ul><ul><li>Taixing Huaheng Lamp & Plastic </li></ul></ul><ul><li>Suspension, brakes, axles, steering, tires </li></ul><ul><ul><li>Wanxiang Group </li></ul></ul><ul><ul><li>Xuzhou Zhengxing Axle </li></ul></ul><ul><ul><li>Wuxi Shengfeng Vibration Isolator </li></ul></ul><ul><ul><li>AsiaTrak </li></ul></ul><ul><ul><li>Wendeng Sanfeng Tire </li></ul></ul><ul><ul><li>Hangzhou Zhenxing Friction Material </li></ul></ul><ul><ul><li>Liaoan Section Mill </li></ul></ul><ul><ul><li>Shandong Shantui Ouyatuo Machinery </li></ul></ul><ul><ul><li>Baoding Jizhong Bushing Factory </li></ul></ul><ul><ul><li>Tianjin Ribiao </li></ul></ul>
    34. 34. SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (1/3) - All purchase decisions are made locally Source: Company website HQ, Zhejiang, China Seat N/a Zhejiang Tiancheng Seat HQ, Shanghai , China Control system N/a Shanghai Pal-fin Automatic Control Technology HQ, Chongqing, China Engine N/a Cummins HQ, Zhejiang , China Automotive Air Conditioning N/a Hangzhou Nealley Vehicle Air Conditioning HQ, Zhejiang, China Transfercase 3,350 Hangzhou Advance Gearbox HQ, Henan , China Automotive Air Conditioning N/a Yuxin Automotive Air Conditioning Motormeters Cockpit Control system Control system Business HQ , Zhejiang, China 100 Fenghua Hearty Motormeters HQ, Shandong, China 200 Shandong CAB HQ, Shanxi , China N/a Xi’an Kind Electrical Control Instruments HQ, Shanxi, China N/a Shanxi Sunland Automatic Control Purchase decisions Employees Manufacturer
    35. 35. SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (2/3) Source: Company website HQ, Jiangsu , China Door N/a XuZhou YangSheng Machine HQ, Jiangsu, China Lights and accessories 550 Taixing Huaheng Lamp & Plastic HQ, Shandong, China Tire N/a Wendeng Sanfeng Tire HQ, Tianjin , China Rollers N/a AsiaTrak HQ, Jiangsu , China Vibration Isolator 425 Wuxi Shengfeng Vibration Isolator Drive Axle Suspension, steering Transfercase Electric Motor Business HQ , Jiangsu, China N/a Xuzhou Zhengxing Axle HQ, Zhejiang, China N/a Wanxiang Group HQ, Sichuan , China 2200 Sichuan Gear Works HQ, Jiangsu, China 300 Qidong Sanshang Electromechanical Purchase decisions Employees Manufacturer
    36. 36. Source: Company website SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (3/3) HQ, Tianjin , China Reducer and parts assembly N/a Tianjin Ribiao Construction Machinery Parts HQ, Shandong, China Torque Converter 582 Torque Converter Shantui Construction Machinery HQ, Zhejiang , China Torque converter 550 Zhejiang Linhai Machinery HQ, Zhejiang , China Frictional products Around 200 Hangzhou Zhenxing Friction Material Transmission Box Shell Idler, Roller, Carrier Ax letree & Tile Track shoes Business HQ , Hubei, China Around 150 Hubei Guanghua Transmission HQ, Shandong, China N/a Shandong Shantui Ouyatuo Machinery HQ, Hebei , China N/a Baoding Jizhong Bushing Factory HQ, Liaoning, China Around 100 Liaoan Section Mill Purchase decisions Employees Manufacturer
    37. 37. THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE COASTAL AREA OF CHINA Source: Corporate websites and annual reports Shanxi Sunland Automatic Control Xi’an Kind Electrical Control Instruments Shanghai Pal-fin Automatic Control Technology Zhejiang Tiancheng Seat Shandong CAB Fenghua Hearty Motormeters Yuxin Automotive Air Conditioning Hangzhou Nealley Vehicle Air Conditioning Cummins Hangzhou Advance Gearbox Qidong Sanshang Electromechanical Sichuan Gear Works Torque Converter Shantui Construction Machinery Zhejiang Linhai Machinery Hubei Guanghua Transmission XuZhou YangSheng Machine Taixing Huaheng Lamp & Plastic Wanxiang Group Xuzhou Zhengxing Axle Wuxi Shengfeng Vibration Isolator AsiaTrak Wendeng Sanfeng Tire Hangzhou Zhenxing Friction Material Liaoan Section Mill Shandong Shantui Ouyatuo Machinery Baoding Jizhong Bushing Factory Tianjin Ribiao
    38. 38. Source: STC <ul><li>Market restructuring happens with the supervision from the government </li></ul><ul><li>Sanyi and Carlyle Group are under the negotiation with Xu Gong acquisition </li></ul>Technology Competition Restructuring <ul><li>Foreign, esp. Japanese and American players are at medium-high end market, with low volume </li></ul><ul><li>Locals are taking main share, but at low end market </li></ul><ul><li>Locals are taking efforts to develop premium products </li></ul><ul><li>IPR is still a concern to many foreign investors </li></ul>THE MARKET IS BEING RESTRUCTURED UNDER SUPERVISION FROM THE GOVERNMENT Trends within the Chinese Construction Equipment industry
    39. 39. <ul><li>Overview German Manufacturing Industry </li></ul><ul><li>German Automotive Industry </li></ul><ul><li>German Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    40. 40. Source: STC RECOMMENDATIONS FOR MAKING BUSINESS WITH THE CHINESE AUTOMOTIVE INDUSTRY Recommendations for making business with the Chinese automotive industry Although China has low labor costs, operation costs could be high why investors are recommended to make careful plan before they enter China 3. 2. 1. Country specific 3. 2. China´s automotive sector is not fully open yet, and many market restrictions still exist. IPR issue is still worth considering It is necessary to carry out certain market study to understand the market and customers To visit the potential customers or partners can be a good start for the business China encourages investors to source locally, and set quite high duty on importing parts. 1. Industry specific It is necessary to carry out certain market study to understand the market and customers To visit the potential customers or partners can be a good start for the business China encourages investors to source locally, and sets quite high duty on importing parts. Investors are recommended to build long term relationship with its partner and relevant authorities
    41. 41. <ul><li>Overview German Manufacturing Industry </li></ul><ul><li>German Automotive Industry </li></ul><ul><li>German Construction Equipment Industry </li></ul><ul><li>Recommendations </li></ul><ul><li>References </li></ul>CONTENT
    42. 42. HOW STC IN CHINA SUPPORT COMPANIES TO DO BUSINESS IN CHINA Partner search Sales Support Market Check Recruitments Supplier search Business Support Office Company establishment Description of service Example of result Sample clients / Products Besides this we often custom made projects to suit our customers needs Map out the current situation in China for a specific product or service Give the company a base for deciding if to enter the market or not / making a cost estimate for setting up production <ul><li>Plastic production company </li></ul><ul><li>Household appliance manufacturer </li></ul>Making test sales in China of a product and collecting feedback from potential customers to sharpen local offering Modifying the product portfolio and sales pitch to better suit the Chinese market. <ul><li>Producer of alloys </li></ul><ul><li>Springs for the automotive industry </li></ul>Finding the most suitable agents or a distributors in China or Hong Kong based on the needs of the Swedish company Making the Swedish and Chinese understand each other and finding common ground <ul><li>Leather for interior design </li></ul><ul><li>Dental products </li></ul>Map out the needs of the company, work out a profile and find the best possible candidate to that profile 140 recruitments over the last two years (Examples: Swedish GMs, Asia managers, local sourcing, local sales, QCs) <ul><li>Logistics </li></ul><ul><li>Plastic manufacturing </li></ul>Find the best possible supplier that matches the criteria set by the Swedish company to get the best competitive advantage Matching, explaining and verifying technical needs with local production capacity <ul><li>Cast iron products, cables, containers, disposables, electronics </li></ul>A quick “low risk” establishment in China either in the form of a full time staff or as part time support together with office space Over 50 staff employed in China and Hong Kong that works 100% for the Swedish company but that is employed by STC <ul><li>Purchasing staff, sales staff, quality control staff, Swedish staff </li></ul>Establishments and setting up of production- or trading companies in China and / or Hong Kong Assist in establishing all types of presences; representative offices, WFOEs, FICE and Ltds (HK) <ul><li>Lighting products </li></ul><ul><li>Aluminum manufacturing </li></ul>
    43. 43. STC HAS HELPED NUMEROUS SWEDISH COMPANIES TO DO BUSINESS WITH THE CHINESE AUTOMOTIVE INDUSTRY Manufacturer of brake systems, hydraulic power systems, garphyttan wire (specialty spring wire), and traction systems Service provider in both holistic commitments in complex vehicle development projects and consultancy services and expert support in pre-studies, design, calculation, construction, prototypes and test & verification. Eq uipment provider for exhaust extraction systems for vehicle service shops and the automotive industry. Visited relevant official department and manufacturers in Hong Kong, Guangzhou and Shanghai A automotive delegation consist of 9 Swedish companies PROFILE COMPANY
    44. 44. STC CARRIED OUT A POTENTIAL CUSTOMER SEARCH AND VISITING PROGRAM FOR SEMCON The overall objective of this assignment was to assist Semcon in investigating the market potential in Eastern China in and to further strengthen Semcon’s market position in Asia . <ul><li>Conducted a pre-study of potential customers, and set up a visiting program with a number of of RnD-managers at automotive manufacturers in Eastern China with STC. </li></ul><ul><li>Assisted and advised Semcon in its meetings with potential partners during the visiting program </li></ul><ul><li>STC also supported Semcon in the process of selecting customers. </li></ul>STC role and contribution Results Goal Outline of project <ul><li>A recommended list of companies that met Semcon’s criteria was presented with company profile and STC’s comments and advices. </li></ul>Potential customer sea rch Visiting program Kick off Workshop 1 Workshop 2 Kick off: The start-up meeting resulted in a skilled project team and detailed project planning. Step 1: STC carried out the potential customer search program. Workshop 1: Presentation and discussion of the potential customer search; deciding next step including planning of visiting program. Step2: Semcon visits China and meets with RnD-managers within the automotive industry together with STC. Workshop 2: Discussion of visiting program and next step.
    45. 45. STC CARRIED OUT A RECRUITMENT AND BUSINESS SUPPORT OFFICE (BSO) PROJECT FOR NEDERMAN The overall objective of this assignment was to assist Nederman to successfully enter the China market . <ul><li>STC support ed Nederman to recruit two Sales Managers for the China market </li></ul><ul><li>STC assist ed Nederman to legally employ the staff under STC in East China (BSO concept) until Nederman decides to set up its own presence in China . </li></ul><ul><li>By employing the representatives through STC BSO, Nederman will in reality have the same capabilities in China as if they would have it’s own Representative office. </li></ul>STC role and contribution Results Goal Outline of project <ul><li>STC helped Nederman in establishing a presence in China and has now two sales managers working full time. </li></ul>Advertisement Interviews Employment at BSO <ul><li>Kick off: necessary candidate qualification discussion, choice of ad media, decided recruitment schedule. </li></ul><ul><li>Step 1: advertisement on newspaper went publications for candidate search. </li></ul><ul><li>Shortlist: review candidates’ profile to narrow down amount of candidates. </li></ul><ul><li>Step 2: interviews by Nederrman and STC with selected candidates. </li></ul><ul><li>Recruitment: qualified candidates employed. </li></ul><ul><li>Employment at BSO: with office space, office equipment and financial services provided by STC, employees start to work for Nederman. </li></ul>Shortlist Recruitment Kick off
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