Global auto parts giants seize the Chinese auto market
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Saint-Gobain, a leading global manufacturer of automotive glass, is currently operating a factory in Shanghai. As the world’s largest automakers continue to increase their domestic procurement rates, and more new car models are being introduced simultaneously with global launches in the Chinese market, the demand for locally sourced auto parts has surged. In response, major international auto parts suppliers are accelerating their investments in China. Recently, Saint-Gobain Safety Glass, one of the top automotive glass manufacturers worldwide, partnered with Korea Glass to establish a new joint venture in Shanghai.
With a 24% global market share and an impressive 45% share in Europe, Saint-Gobain is a key player in the automotive glass industry. It's estimated that one in every four cars globally uses its products. The new company, which received a $72 million investment, will have a production capacity of 1.5 million sets of automotive glass annually. Not only will it serve the local Chinese market, but it will also export products to Northeast Asia, helping to mitigate the effects of short-term fluctuations in China’s auto market.
Major domestic clients include Beijing Hyundai, Dongfeng Yueda Kia, Volkswagen Group, Shenlong Automobile, Changan Ford, and Dongfeng Motor, among others. During an interview, the company’s senior executives noted that while the Chinese auto market is currently in a period of adjustment and growth has slowed, long-term projections still show a 15% to 20% annual increase. This means the automotive glass market is expected to grow as well.
China’s road conditions and traffic environment contribute to a strong aftermarket for replacement glass. Additionally, many new models launched globally come with advanced manufacturing technologies for components, which lack a fully developed supply chain in China. The new joint venture will help foreign automakers building factories in China access high-quality products locally, while also providing cutting-edge, complex-shaped glass solutions for these new models.
Experts believe that as more global auto parts companies deepen their presence in China, the industry will see overall improvements in technology, quality, and cost control. However, competition will intensify, with foreign and joint-venture companies likely to capture a larger market share. While meeting growing domestic demand, China remains a crucial export hub for auto parts.
For domestic automakers, the challenge lies in how to better connect with global standards, overcome obstacles, and leverage their own strengths. This requires careful planning and strategic thinking to remain competitive in an evolving market.