Chinese auto parts proving a hit
As Chinese manufacturers of auto parts materials ramp up efforts to improve quality and promote innovation, they are becoming increasingly popular among top automobile brands, in a market that has long been dominated by overseas companies.
CGN Juner New Materials Co Ltd has beaten its international rivals to become the supplier of bumper material for the all-new BMW 5 Series, which came into the market last month.
"We are going to supply bumper material for more than 200,000 vehicles of the BMW 5 Series and other models of the brand in the coming year," said Zhang Lei, deputy manager of the Wenzhou, Zhejiang-based company, a subsidiary of Shenzhen-listed CGN Nuclear Technology Development Co Ltd.
CGN Juner specializes in producing modified plastics for vehicles. Modified plastics are materials used in a range of auto components, including bumpers, sun visors, dashboards and steering wheels.
The production capacity of CGN Juner has doubled over the past five years, with its current annual capacity reaching 120,000 metric tons. As the company's new plant in Wenzhou, with 400 million yuan ($58.7 million) of investment, comes into operation later this year, the annual production capacity is going to grow to 200,000 metric tons.
"At the present time, 10 types of modified plastics produced by our company have been certified, or are in the process of certification by BMW, among which two are already on BMW's global purchasing list," Zhang said.
Compared with international rivals, Chinese manufacturers have the advantage of providing lower-price products and better services, which help them gain the upper hand on the competition at the initial stage, he said.
"But in the long run, innovation is the key and we are making great efforts on that," Zhang said, adding that the company is cooperating with BMW on a number of innovative projects, such as cutting bumper weight and reducing environmental pollution caused by vehicles.
The company has set up a research team of more than 70 people. Over 3 percent of its annual sales revenue is poured into research and development.
Supply of bumper material for top brands, including BMW, Mercedes-Benz and Audi, have long been dominated by international giants, as they have high requirement for its intensity, tenacity and 'sprayability'.
"At previous times, core technologies related to auto part materials are in the hands of overseas companies. But now, Chinese companies have broken through the technological barrier and are able to offer high quality products," Zhang said.
In addition to BMW, the company has also established partnership with Mercedes-Benz and Audi. It supplies more than 3,000 metric tons of modified plastics used in Audi models every year. Also, the certification process is under way for the company's products to be used in Mercedes-Benz models and is expected to be completed in 2018.
China has already become the world's largest automobile market, with more than 28 million vehicles being sold last year, representing 13.7 percent year-on-year growth.