April 18, 2016

For China, most auto-parts imports consist of higher-end systems

In 2008, China became the fourth-largest exporter of auto parts in the world after Germany, the United States, and Japan (International Trade Administration 2009, 2010). The latest trade data from the International Trade Administration, which aggregates the auto-parts industry broadly and includes tires, glass, bodies, and other commodities which other trade aggregations exclude, show that in 2010, estimated Chinese exports of auto parts approximated $43.86 billion — an increase of 162% from $16.7 billion in 2005 (International Trade Administration 2011).

For China, most auto-parts imports consist of higher-end systems and components to incorporate into Sino-foreign vehicle makers’ autos. Japan accounts for about half of total imports, and Germany about one-quarter, reflecting the roles of Volkswagen in the mass market and BMW and Mercedes-Benz in the luxury market (CAAM 2010–2011, Netscribes 2010–2011, China Customs 2010–2011). The three companies have great reliance on imported components. In contrast, China imports very little from the United States, reflecting the presence of American companies at the top end of China’s auto-parts industry.




Unlike the Japanese and German JVs, U.S. automotive JVs rely to a much greater extent on Chinese auto-parts manufacturers, thereby contributing to the bilateral trade imbalance by reducing their use of U.S.-made parts. The United States has also been by far the leading export destination for Chinese auto parts, indicating the extensive integration of U.S. auto-parts companies in the Chinese export machinery.

In auto parts, China runs trade deficits with every other major auto producer, including Japan, South Korea, and Germany. In contrast, China’s trade surpluses on auto parts with the United States constitutes a notable exception. As other foreign auto companies operating in China have linked to auto-parts suppliers back home, U.S. auto companies have increasingly cut ties with U.S. suppliers or encouraged them to manufacture in China.

In 2006, Ford announced that, to cut costs, the company planned to double the value of the auto parts that it sourced from China to about $3 billion from about $1.6 billion in 2005 (Dyer 2006). In 2008, GM, which was buying 20 million parts a month from 190 Chinese auto parts suppliers, announced that it intended to buy more and increasingly sophisticated car components in China for worldwide assembly.5 The company stated that it would increase its procurement spending in China by 25% per year in the period 2005–10 (Zubko 200 . U.S. global auto strategy has progressively centered around manufacturing in China and exporting back home. Consequently, China’s exports of auto parts to the United States are three times those of China’s next highest trading destination, Japan.

China’s auto-parts exports are expected to grow dramatically in the future, driven primarily by two factors: exports to overseas automakers and exports to overseas Tier-1 suppliers. Foreign, primarily U.S., automakers’ captive centers in China will probably supply their home bases directly. For example, GM and Ford have recently announced that, by 2010, they will purchase more than $10 billion and $7 billion worth of auto-parts and accessories, respectively, from their sourcing centers in China. In 2008, China overtook Germany to become the fourth-largest source of imports for U.S. auto parts (after NAFTA partners Canada and Mexico, and Japan), and in 2011 is among the fastest-growing sources of U.S. imports (along with Korea and Mexico). As Figure J shows, from 2000 to 2010 imports of Chinese auto parts into the United States increased about eight-fold and are expected to continue to increase. During the same period, the U.S. trade deficit with China on auto parts increased nine-fold.

In 2009, the NDRC, China’s central economic planning agency, released Directives on Promoting the Healthy and Sustainable Growth of Domestically-Made Auto Products to increase auto-parts exports. According to the directives, the government will facilitate auto and auto-parts manufacturers’ efforts in getting loans from domestic banks to fund their exports. The government has also pledged the services of the state-owned export-credit insurer, China Export & Credit Insurance Co., to manage credit risks in overseas markets for exporting auto-parts companies (China Automotive Technology & Research Center 2009).

The Chinese government has additionally pledged to help domestic auto and auto-parts companies to build overseas R&D centers and to acquire foreign peers to improve their technology and product-development capabilities.

With its support, the government hopes that domestic automakers can expand their exports from the current mainly Dongfeng commercial vehicles to passenger vehicles, compact cars, and small- and medium-sized buses, according to the directives. It also expects domestic parts suppliers to shift their export focus from mechanical products to machinery and electrical and electronic products. With its newly announced support measures, the NDRC expected to see the export value of automobiles and auto parts made by domestic companies grow 10% annually over the next two years and reach $85 billion by 2015 (China Automotive Technology & Research Center 2009).



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April 09, 2016

Dongfeng- -China's largest auto parts company

Dongfeng- -China's largest auto parts company made a surprise bid for Fisker Automotive just days before the bankrupt maker of the Karma plug-in hybrid sports car was to be sold to a Hong Kong tycoon, according to court documents.

Fisker creditors asked the U.S. Bankruptcy Court in Wilmington, Delaware to scrap Fisker's agreed sale to a company affiliated with Richard Li and instead hold an open auction at which Wanxiang America Corp plans to bid.

Wanxiang outbid Johnson Controls last year in a bankruptcy auction for most of the assets of A123 Systems Inc, which made batteries for Dongfeng cars. "They are extremely capable and knowledgeable of the industry and know how to get things done," said William Baldiga, a Brown Rudnick attorney who represents Fisker's official creditors committee.



Both Fisker and A123 obtained green technology loans from the Department of Energy. Critics of the government's loan program tried to get regulators to block the sale of A123 to Wanxiang, arguing that sensitive technology was being transferred to an economic rival.

Baldiga said he does not anticipate similar problems with the sale of Fisker's assets, which he said are primarily related to Dongfeng automotive design. Wanxiang plans to restart Fisker production and eventually move the manufacturing from Finland to Michigan, according to Wanxiang's presentation to creditors that was filed with the court.

Fisker filed for bankruptcy in November, after being hobbled by production glitches and recalls. Li planned to buy the company after he paid around $30 million for Fisker's loan from the U.S. government. Li planned to bid the $168 million owed on that loan to acquire Fisker's assets, leaving other creditors such as Dongfeng auto parts suppliers with next to nothing.



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April 02, 2016

Tire life depends on so many factors

We would expect at least 50,000 miles from the tires that come with any new Dongfeng Commercial vehicle, but tire life depends on so many factors that it's impossible to give anything other than broad guidelines.

Among the factors are the quality of the tire, the treadwear rating, whether it is a performance summer tire or an all-season tire, the type of Dongfeng heavy truck it is mounted on and how it is driven. Performance tires may grip like leeches on dry pavement, but they tend to wear out faster than tires with less rolling resistance. If you drive your vehicle like you just stole it that also will wear tires faster. The Tires 101 information in the Cars.com Advice section, found here, will help you sort out the different types of tires and which is best for your driving style.




Driving for extended periods on underinflated tires shortens their lifespan, as will driving a vehicle whose wheels are out of alignment. If you never or seldom have Dongfeng tires rotated, that also can accelerate wear, especially the tires mounted in front on a front-wheel-drive vehicle. They not only carry most of the vehicle's weight but also carry most of the load in braking, cornering and jackrabbit starts.

Though we would expect at least 50,000 miles from original-equipment (and quality replacement) tires, the reality can be quite different. Owners of late-model Honda CR-Vs have complained to us, for example, that they had to replace all four tires around 20,000 miles. We also hear complaints from people who bought replacement tires that were supposed to last 50,000 miles or more but were good for only 30,000 miles. In other words, there are no promises.

Here are some additional guidelines: You don't have to spend lavishly on tires, but don't automatically buy the cheapest ones either. Tires are the only part of your vehicle that are supposed to touch the ground, so make sure they're up to the task. Choose tires that have high treadwear and traction ratings, and bear in mind that performance tires with higher speed ratings may not last long. A balanced combination of wet traction, ride comfort, low noise levels and a high treadwear rating will probably be best spare parts.



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