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Nowadays, China"s auto parts industry is facing tough challenges as the economic downturn. The global financial turmoil puts the brakes to the country"s automobile sales growth. This will add to the list of problems the sector already has to deal with, such as industry fragmentation, limited export channels and poor R&D capacities. Purchase orders received by Chinese auto parts suppliers are decreasing sharply due to plunging demand from automobile manufacturers.
Shanghai Dayou Co., Ltd said the orders of the company dropped 50 percent comparing the same time of last year. The company once realized sales of 50 million Yuan in its peak period. In 2008, it set up a branch in Beijing. However, due to the weak auto market, the company has had to suspend its expansion project in the city.
How to overcome this tough period? Chinese auto parts manufacturers may need more supports from the government.