China`s automotive performance-tuning parts industry has been developing at breakneck speed, but the road to continued growth is strewn with obstacles.

The Domestic Market

The performance-tuning parts market in China has been enjoying high growth in recent years as living standards have improved and car ownership has soared. A lack of order in the young and chaotic market, however, is hindering further development.

The first problem is that the incompleteness of China`s legal system for car renovation leaves many gray areas in the market.

The country`s new road-safety laws clearly prohibit any organization or individual from modifying or renovating a vehicle`s structure, powertrain system, or appearance, meaning that renovated, modified, or upgraded vehicles in China might not pass the required annual inspection. While this might promote highway safety to some extent, it also hinders the development of the tuning-parts industry.

Second, the lack of inspection regulations and a regulatory authority for automotive tuning parts poses a threat to vehicles equipped with such items. With no safety standards to regulate tuning parts, the government has adopted the simple expedient of a ban.



Third, the lack of a safety certification system for tuning items has forced many suppliers to sell to car-renovation shops directly, leading to anarchy in a tuning-parts market that has no specifications for quality, safety, or price. This situation is further aggravated by China`s large number of small and unprofessional car-modification shops, which generally install inferior parts on their customers` vehicles in order to earn higher profit margins. This behavior distorts the market and hampers healthy development.

Fourth, most tuning-parts and -accessories manufacturers in China are small firms with limited capitalization, low volume of production, weak R&D capability, and poor quality level. They are able to survive only at the low end of the market.

Fifth, car-modification costs in China are very high and the market is chaotic. This makes it almost impossible for any particular company to gain popularity quickly and expand its market size effectively.

Sixth, major international tuning-parts suppliers are also eyeing the lucrative Chinese market and are striving aggressively to boost their market share there. Most major global brands, with much better quality and more advanced technologies, have begun developing the top end of the market and this has encouraged local suppliers to stay away from this market segment.

Challenges and Opportunities

The automotive industry in China took off at a very late date-just a few years ago-but the speed of its development has surprised observers all over the world.

The Chinese tuning-parts market is expected to follow along with the rapid development of the automotive industry as a whole-if only the government can bring about the quick enactment of standards and rules for the effective regulation of the market. The development of the tuning-parts markets in industrially advanced nations can provide clear directions for how China should proceed with establishing the regulatory framework that is so urgently needed.



Another positive sign in the development of the tuning-parts business in China is the entry of more and more major international tuning-parts brands into the competitive fray. While it will undoubtedly intensify the competition, this will also give China`s tuning-parts industry better access to the advanced concepts and techniques it needs for continued development.

Guangdong, Citadel of Tuning Parts in China

With the highest volume of automobile ownership, China, Guangdong Province is also the base for a large cluster of tuning-parts suppliers.

One of these is the Guangzhou Laige Co., which specializes in designing, developing, and manufacturing a wide range of performance-tuning aerodynamic auto body parts.

Established in 2000, Guangzhou Laige supplies tuning body parts made of carbon fiber, polyurethane (PU), fiber-reinforced polymer (FRP), and other materials. It also offers a variety of accessories.

President Tao Guobao says that his company focuses mainly on the development and production of carbon-fiber products made of high-end materials from Japan and Taiwan to assure both high strength and attractive appearance.



According to Tao, most of Laige`s products are hand-made by skilled technicians that are recruited from Taiwan and have been trained in the United Kingdom or Germany for a year. The president stresses that his company follows ISO 9000 quality standards in managing and controlling every stage of in-house production and quality inspection, giving Laige`s products an outstanding level of precision level and quality.

"With the advantages of light weight, high strength, erosion resistance, and temperature resistance," Tao comments, "carbon-fiber parts can replace many traditional metal parts in cars to allow the vehicles to run faster. Some car-racing clubs in China have chosen us as their first-choice supplier of carbon door panels and other items to make their racing machines faster and more aerodynamic."

Laige exports its tuning parts to big buyers in Europe and the U.S. It recorded sales of about 10 million renminbi (RMB, the Chinese yuan) in 2007, and the figure is expected to grow by at least 20% this year.

The Huangjia Tuning Parts Co. is an integrated developer and manufacturer of exterior tuning parts, including aerodynamic body parts, bumpers, spoilers, aprons, and side skirts.

Chen Yiwang, Huangjia`s sales manager and technical consultant, points out that his company focuses mainly on exterior tuning parts that require talented designers with long-term experiences and know-how. "Our strong design team," he emphasizes, "can always work out the products that our customers need to upgrade a vehicle`s aerodynamic performance and overall styling at the same time."



At Huangjia, Chen adds, the quality-control division assures product quality with an aggressive approach, and follows up on any problems that might occur in the production processes. The resulting products are shipped mainly to major markets in the U.S. and Southeast Asia, as well as being sold domestically.

Another of Guangdong`s top tuning-parts suppliers is the Che Di Auto Modified Co., a specialized producer of performance-tuning aerodynamic body parts made of various materials.

"Our company currently supplies both full-vehicle and semi-vehicle aerodynamic body parts made of FRP," explains Che Di president Jack Mao. "Parts made of FRP are more fragile than products made of other materials, but they have many unmatched advantages including greater stylishness (with higher flexibility in regard to shape) and more model selections. Most importantly, they are cheaper than carbon-fiber products, especially. In many cases, aerodynamic FRP parts are the first choice of car fans."

According to Mao, Che Di is fully able to receive customers` product sketches and turn them into the finest finished items at competitive cost. The company carries out 100% of its mold development, production, and surface-grinding in-house to assure the highest quality.

"We take care of every step of production starting with mold development, which is the key to making a finished product that fits the target vehicle 100%," Mao stresses. "In order to assure the 100% fit, we pick out several items from each batch to test the fit, and then immediately modify the mold until 100% precision is achieved."

Though a newcomer with only over two years of experience and limited production capacity, Che Di chalked up a 240% revenue growth last year. The company is also boosting the ratio of exports in its overall sales; already, its products are sold to the U.S., Europe, and Japan, along with other markets.
(by CENS)