Himfr Analyzes Auto Parts Market Situation

Jun 21, 2010, 10:00 ET from Himfr.com

BEIJING, June 21 /PRNewswire-Asia/ -- Himfr.com, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, analyzes the auto parts market situation.

Recently automobile parts industry suppliers have experienced stoppages, which in turn affects automotive industry vehicle production.

Zero inventory for automobile parts enterprises is the industry norm. Aside from spare parts supply and production system problems, following is an in-depth study of labor costs in the automotive industry chain.

Himfr believes that as an important part in the vehicle cost control, the wages of the workers high up in the supply chain may rise, which will impact vehicle manufacturers. Eventually, the vehicle parts business enterprises may need to re-negotiate prices.

In the automotive industry, the upstream industry chain's main cost is components. In general, component costs account for 60% of vehicle cost, so cost control in this area is very important.

In the automotive industry, while many core technologies are developed in house, the remaining parts are often supplied by upstream dealers. Although whole-vehicle enterprises and spare parts dealers have two-way relationships, whole-vehicle enterprise are in the middle of the automotive industry chain and have the greatest negotiating power.

Especially in difficult times, whole-vehicle manufacturers' cost control measures can seriously affect upstream vehicle spare parts enterprises. For example, Toyota, in response to loss, tasks its spare parts suppliers with cost control, and even proposed 30% required cost cuts for components within the next three years.

Himfr analyzes that in the future parts suppliers will have to face increasing labor costs. And labor costs are the most active variables among cost control, which will directly push up the costs of spare parts enterprises.

(http://www.himfr.com/list-product-Automobile-03000000-1.html )

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