The recent bankruptcy of Delphi in the U.S. has sent ripples through the global auto parts industry, with Chinese companies now stepping into the spotlight as potential winners. Reporters Hui Zhengyi and Xu Chenhua highlighted that while the U.S. auto sector mourns the loss of one of its largest suppliers, low-cost Chinese manufacturers are seizing the opportunity. They may soon secure contracts previously held by Delphi, a move that could significantly boost their international presence. In Taiwan, the business opportunities arising from this shift are estimated to be worth up to NT$1.6 trillion.
According to local media, North American auto parts companies are expected to release over $50 billion in annual procurement opportunities following restructuring and even bankruptcy protection. Wu Yushang, spokesperson for Xingjing Machinery Co., Ltd., noted that in the past 20 years, half of the world’s auto parts manufacturers have disappeared, with Europe and the U.S. being the hardest hit. He believes the industry will continue to consolidate, and Asia’s lower costs could become a key advantage.
Taiwan’s three main strengths include cost efficiency, strong technical capabilities, and close ties with mainland China. While Japan and South Korea lead in full-vehicle manufacturing, Taiwan excels in spare parts production, with several mature companies already established. Moreover, the support from the mainland gives Taiwanese firms a competitive edge, enabling them to better tap into China’s vast resources. For example, ZTE’s affiliated enterprises have deployed more than 20 locations across the mainland, and many Taiwanese manufacturers are currently securing major orders from global players like Autoliv and Mercedes-Benz.
Zhou Shoubin, deputy general manager of Zhejiang Taizhou Luobang Heat Dissipation System Co., Ltd., which exports 80% of its products abroad, told *First Financial Daily* that Delphi’s bankruptcy has removed a major competitor. However, challenges remain for mainland auto parts companies, particularly in overcoming technical barriers. Xu Jihua of Zhejiang Zhongneng, a company that started in auto parts, said most multinational giants produce high-tech components that domestic manufacturers haven’t yet reached the level of. Zhou also admitted that many Chinese suppliers are still engaged in basic processing, such as glass and wiper production, relying on low labor costs to compete.
Despite these hurdles, the future looks promising. Zhou said his company plans to enter the international mainstream aluminum brazing tank series within the next two to three years. Wu Yushang believes that although mainland China is not yet fully mature in technology and management, it will eventually become a core player in global auto parts production. As the industry evolves, Chinese manufacturers are showing increasing ambition and capability to take on bigger roles in the global market.
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