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Exports of automotive products will show an accelerated growth trend
Deloitte China recently released the findings of a survey conducted among senior executives from automotive and parts companies across the country, focusing on the future of China's auto exports. The study reveals that by 2010, auto exports are expected to make up between 25% and 50% of total sales, a significant jump from the current 6%. The survey included a wide range of companies—state-owned, private, joint ventures, and wholly foreign-owned enterprises—accounting for about half of the industry. Among them, 80% were parts manufacturers, while 20% were vehicle producers.
Both exporting and non-exporting companies have expressed strong interest and concerns regarding international expansion. According to the survey, the average export ratio of auto products to total revenue is projected to rise from 14% in 2006 to 28% in 2010, showing a clear upward trend. North America and Europe remain the top target markets for many parts manufacturers.
Quality is considered the most critical factor for successful exports. Many companies have found that product quality plays a decisive role in entering overseas markets. Other key factors include cost efficiency, distribution networks, brand recognition, and compliance with safety and emission standards. While vehicle companies emphasize after-sales service and maintenance, parts companies prioritize technological innovation.
As export volumes grow, international relations and after-sales support have become more important. For vehicle manufacturers, challenges include navigating international regulations, maintaining quality standards, managing after-sales services, and ensuring cost competitiveness. Parts companies face similar issues, plus additional pressure from upstream and downstream supply chains, as well as low product value and tight cost controls.
The report recommends that Chinese auto parts companies focus not only on quality and cost but also on expanding their scale and improving supply chain integration. They should invest in information systems that enhance operational efficiency and build stronger internal and external credibility.
For China to become a major auto exporter, it must first develop a strong, competitive domestic market. Over the years, China’s commercial vehicle industry has gained international recognition in certain segments, such as light trucks and large passenger vehicles. The future success of car exports will depend on improving internal capabilities, better understanding of global markets, and adopting effective market strategies.
Senior managers of export-oriented companies stress the importance of partnering with international firms, leveraging their overseas sales and service networks, and benefiting from their expertise. This collaboration is crucial for establishing a solid presence abroad. As Chinese auto exports shift from practical models like trucks to more consumer-driven cars, companies need to focus on brand building, market research, and customer-centric product development. It's time to move away from the "low quality and low price" perception and embrace advanced quality management practices like Six Sigma, along with strict quality control processes.