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Auto Parts Giant to Double Investment in China
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The Bosch Group, the world's leading supplier of auto parts, is to double its investment in China, injecting 620 million euros by 2008.


Bosch would not be making the additional investment if there had been no increase in profits, said Peng Deyuan, president of Bosch (China) Investment Co., Ltd.


Since the beginning of the year, the auto parts giant has invested 160 million euros in building two plants in Changsha, in central China's Hunan Province and Suzhou, in eastern Jiangsu Province.


Another 100 million euros will be used to expand the two plants, Shanghai Securities News reported Wednesday.


Peng said that Bosch will increase its sales in the Asia-Pacific region to 25 percent of its global sales within eight years.


China and India are two of Bosch's fastest growing markets, with China currently accounting for 15 percent of its Asia-Pacific sales and 2.5 percent of global sales.


China's auto parts industry is expected to be worth 800 billion yuan (US$100 billion) in 2010, making the country the world's largest destination of foreign investment in the sector, the report says.


With the world's major automakers showing off their new models at the ongoing Beijing Auto Show, international auto parts giants such as Bosch, Denso, Michelin and Siemens are vying for a share in the vast Chinese market.


A number of auto parts suppliers have moved some of their plants to China in order to reduce production costs. Chinese automakers purchase 80 billion yuan worth of auto parts every year.


This year, Delphi, Magna and other auto parts giants have set up ten production bases across China, 90 percent of which are fully owned subsidiaries. These multinationals have also invested hundreds of millions of yuan in building their own research and development centers in the country.


There were 4,447 auto parts producers in China in 2005, with a total sales volume of 344.9 billion yuan and profits of 20 billion yuan, accounting for 29 percent and 38 percent of the country's auto industry, according to the China Automotive Industry Association.


Meanwhile, many foreign automakers have begun purchasing auto parts from China, giving an impetus to the country's auto parts exports, which reached US$8.53 billion in 2005, outperforming imports of US$8.38 billion for the first time.


(Xinhua News Agency November 22, 2006)


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