Auto-Parts Import Down in Dalian Customs in Jan-July 2016
[2016-09-27]
Auto-Parts Import Down in Dalian Customs in Jan-July 2016
According to China Customs statistics, during January-July 2016, Dalian Customs District had the import of automobile parts worth CNY 2.69 billion, down 12.3% year-on-year (YOY).
Ⅰ Characteristics of the auto parts import to Dalian Customs in Jan-July:
(1) In July the import declined much YOY. In July, Dalian Customs imported auto parts worth 370 million yuan, down 22.7% YOY and down 1.3% month on month (MOM).
(2) The import was primarily through ordinary trade. During Jan-July, Dalian Customs imported auto parts worth 2.58 billion yuan through ordinary trade, down 13.2% YOY, accounting for 96% of the total value. In addition, import under customs special control reached 60 million yuan, down 12.7%.
(3) Nearly 70% of the import was by foreign-invested enterprises. In Jan-July 2016, foreign-invested enterprises imported auto parts worth 1.85 billion yuan, down 12%, accounting for 68.5% of the total. In addition, import by state-owned business reached 620 million yuan, down 12.8%; private enterprise contributed 220 million yuan, down 13.4%.
(4) EU was the biggest source of the import. In Jan-July 2016, Dalian Customs imported 1.95 billion yuan worth of auto parts from EU, down 17%, accounting for 72.4% of the total. In addition, the import from South Korea was worth 320 million yuan, up 19.5%; that from Japan worth 190 million yuan, down 4.6%.
Ⅱ Main Causes of the Decrease in Auto-Parts Import
Auto parts have been increasingly made in China. Take auto engine as example: since this year, seven engine projects will increase new capacity by more than 1.5 million sets in total. In recent years, many luxury brand automakers in China are importing core technology of engine to make their manufacturing localized. Volvo’s Zhangjiakou engine project, put into production on April 26, is Volvo’s only engine plant outside Europe and supplying engines not only to Volvo firms in China but also to those outside. At present, 4 engine projects are under construction and will be put into production by 2018 with a planned capacity of 1.72 million sets per year: therein, Changan Ford’s Chongqing engine plant has a new capacity of 400,000 sets per year and will increase it to 1.2 million sets per year by August 2017. Hence, more and more home-made parts directly led to the decrease in import.
Ⅲ Notable Problems and Relevant Suggestions
(1) Some of China-made auto parts are sub-standard in quality. Recently, China’s AQSIQ (Administration of Quality Supervision, Inspection and Quarantine) launched the second random checking of 31 kinds of products. By the quality inspection, the percent of pass is 89.4% and the percent of failure is 10.6%, with automotive lamp defective rate bigger than 10%. Main quality problems include: brake linings are sub-standard in friction coefficients; tail lamps and back turn signal lamps are sub-standard.
(2) The state is adjusting policies for new-energy vehicles, parts industrial transformation needing adjustment. Though new-energy vehicle industry did not grow as fast as expected in the first half year, some parts enterprises involved had relatively satisfactory performance, especially in core parts area like auto power battery, electrical control and motor. But new-energy vehicle industry faced many problems such as defects in battery charging facility, industrial production disorder, power battery defects, and inadequacy in support policy. So, under market risk and transformation difficulty, parts suppliers should act with care. Besides, in rapid development of new-energy vehicles, cheat for subsidy is emerging and worrying as this industry is now heavily dependent on government subsidy, which seems complicated.
(3) Many auto-parts firms are keen on car making, though with dull performance. Various Chinese companies, from electric appliance makers to auto parts makers, often have great enthusiasm about making automobiles. On June 18, Beijing WKW Automotive Parts Co., Ltd. announced that it intends to acquire 35% stake in Jiangsu Kawei Auto for 1.05 billion yuan. As a traditional parts supplier, Beijing WKW has successively acquired 48% equities in Shenzhen WuZhouLong Automobile Co., Ltd., 20% equities in Changchun New Energy Vehicle Co., Ltd., and 75% equities in German Stuttgart Electric Vehicle Company. However, state policy adjustment aims to enable the firms with capital advantage and technological innovativeness to activate the new-energy vehicle market. In fact, it is found that many firms make access to new-energy vehicle development only in order to get government subsidy, even by cheating; meanwhile, new-energy vehicle business purchased by parts makers has got sluggish this year.
Ⅰ Characteristics of the auto parts import to Dalian Customs in Jan-July:
(1) In July the import declined much YOY. In July, Dalian Customs imported auto parts worth 370 million yuan, down 22.7% YOY and down 1.3% month on month (MOM).
(2) The import was primarily through ordinary trade. During Jan-July, Dalian Customs imported auto parts worth 2.58 billion yuan through ordinary trade, down 13.2% YOY, accounting for 96% of the total value. In addition, import under customs special control reached 60 million yuan, down 12.7%.
(3) Nearly 70% of the import was by foreign-invested enterprises. In Jan-July 2016, foreign-invested enterprises imported auto parts worth 1.85 billion yuan, down 12%, accounting for 68.5% of the total. In addition, import by state-owned business reached 620 million yuan, down 12.8%; private enterprise contributed 220 million yuan, down 13.4%.
(4) EU was the biggest source of the import. In Jan-July 2016, Dalian Customs imported 1.95 billion yuan worth of auto parts from EU, down 17%, accounting for 72.4% of the total. In addition, the import from South Korea was worth 320 million yuan, up 19.5%; that from Japan worth 190 million yuan, down 4.6%.
Ⅱ Main Causes of the Decrease in Auto-Parts Import
Auto parts have been increasingly made in China. Take auto engine as example: since this year, seven engine projects will increase new capacity by more than 1.5 million sets in total. In recent years, many luxury brand automakers in China are importing core technology of engine to make their manufacturing localized. Volvo’s Zhangjiakou engine project, put into production on April 26, is Volvo’s only engine plant outside Europe and supplying engines not only to Volvo firms in China but also to those outside. At present, 4 engine projects are under construction and will be put into production by 2018 with a planned capacity of 1.72 million sets per year: therein, Changan Ford’s Chongqing engine plant has a new capacity of 400,000 sets per year and will increase it to 1.2 million sets per year by August 2017. Hence, more and more home-made parts directly led to the decrease in import.
Ⅲ Notable Problems and Relevant Suggestions
(1) Some of China-made auto parts are sub-standard in quality. Recently, China’s AQSIQ (Administration of Quality Supervision, Inspection and Quarantine) launched the second random checking of 31 kinds of products. By the quality inspection, the percent of pass is 89.4% and the percent of failure is 10.6%, with automotive lamp defective rate bigger than 10%. Main quality problems include: brake linings are sub-standard in friction coefficients; tail lamps and back turn signal lamps are sub-standard.
(2) The state is adjusting policies for new-energy vehicles, parts industrial transformation needing adjustment. Though new-energy vehicle industry did not grow as fast as expected in the first half year, some parts enterprises involved had relatively satisfactory performance, especially in core parts area like auto power battery, electrical control and motor. But new-energy vehicle industry faced many problems such as defects in battery charging facility, industrial production disorder, power battery defects, and inadequacy in support policy. So, under market risk and transformation difficulty, parts suppliers should act with care. Besides, in rapid development of new-energy vehicles, cheat for subsidy is emerging and worrying as this industry is now heavily dependent on government subsidy, which seems complicated.
(3) Many auto-parts firms are keen on car making, though with dull performance. Various Chinese companies, from electric appliance makers to auto parts makers, often have great enthusiasm about making automobiles. On June 18, Beijing WKW Automotive Parts Co., Ltd. announced that it intends to acquire 35% stake in Jiangsu Kawei Auto for 1.05 billion yuan. As a traditional parts supplier, Beijing WKW has successively acquired 48% equities in Shenzhen WuZhouLong Automobile Co., Ltd., 20% equities in Changchun New Energy Vehicle Co., Ltd., and 75% equities in German Stuttgart Electric Vehicle Company. However, state policy adjustment aims to enable the firms with capital advantage and technological innovativeness to activate the new-energy vehicle market. In fact, it is found that many firms make access to new-energy vehicle development only in order to get government subsidy, even by cheating; meanwhile, new-energy vehicle business purchased by parts makers has got sluggish this year.
Keywords:Auto-Parts，Dalian
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