China’s Auto Suppliers Expected to Increase
Revenues, Margins and Acquisitions this Year,
According to AlixPartners Study
Technology Acquisition Also a Priority, Buttressed by International Hiring;
Domestic Market Share of Chinese Automakers Seen Rising to 36% this Year
April 15, 2010 11:36 AM Eastern Daylight Time
DETROIT--(EON: Enhanced Online News)--Auto suppliers in China, now the most profitable in world,are
expected to increase revenues, profit margins and acquisitions—including overseas ones—this year, as well as
increase their drive for new technologies, according to a new study by the global business-advisory firm AlixPartners
LLP. The study, which included a survey of 50 senior executives from both foreign and domestic players in China’s
auto-supply and original-equipment manufacturer (OEM) sectors, also included the prediction that the market share
of domestic automakers in China will rise to 36% this year, up from 32% in 2009.
On the back of soaring domestic vehicle sales, in 2009 suppliers in China enjoyed average revenue growth rates of
about 23%, to about 1,140 billion yuan, and, according to the AlixPartners survey, revenues in 2010 are expected
to grow another 22.6% on average. In all, survey respondents predicted average growth of 20% per annum
between now and 2015. Meanwhile, supplier export revenues, which were up only 5% in 2009, are expected to
increase more than 10% this year, said the survey.
In terms of profits, operating margins of Chinese suppliers nearly doubled in 2009, to about 9%, versus just 5% for
American suppliers in the fourth quarter, and survey respondents said that margins will improve further this year, to
about 10%. The study also noted that Chinese supplier margins today are about two percentage points better than
that of their OEM counterparts in China, and about that same amount better than their supplier peers globally.
Beyond the highly publicized recent acquisition of Volvo AB by Geely Automobile Holdings Ltd., the study details a
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