Not long ago, Permanent Exhibition Center of China Automotive Parts (Osaka) (hereinafter referred to Exhibition Center), jointly led by Society of Automotive Engineers of China and Japan Automobile Manufactures Association, was set up in Osaka, Japan. Talking about the purpose of the establishment of the center, Yan Jianlai, director of the Parts Department of Society of Automotive Engineers of China, said: “We do not expect a fundamental change in the Sino-Japanese auto trade in the near future, but we would like to express our attitude --- paying attention to and opening up the Japanese market.”

Since 50 years after the establishment, China’s automobile industry has been always in a state of trade deficit. In 2001, a request was proposed by the country for expanding the product export and encouraging the automobile companies to open up. In 2005, a trade surplus was achieved in the automobile industry. Through years of development, our parts companies have had favorable success in the American and European market. Yan Jianlai said: “Basically, the situation of China’s automotive parts export has had an orderly conversion in the American and European market, from the aftermarket to OEM market and from low-end to high-end.”

While developing the European and American market, the domestic industry is very concerned about the Japanese market. Influenced by the financial crisis, some parts companies originally with Europe and the United States as the main export markets have turned down. Therefore, opening up the Japanese market will become a new choice.

For a long period of time, China’s parts companies have not had a breakthrough in Japan. Yan Jianlai thinks that there are three main reasons: Firstly, the Japanese parts industry is very stable. In the mid-1980s, there were more than 400 parts companies in Japan. In recent years, its number is still maintained at over 400. Secondly, costs for the opening up are too high. In 2006 and 2007, Yan Jianlai attended several parts exhibitions in Japan and did not see any Chinese parts companies there. Later, he was told that the cost for the rental of a non-standard booth was more than RMB 300 Thousand Yuan and that for the standard booth was doubled. Thirdly, there is a certain gap between the product quality and supporting credibility of the Chinese and Japanese parts companies.

Today, the situation is changing. In recent years, the strength of China’s automotive parts companies has been enhanced continuously and their productivity, product quality and service levels have been upgraded as well. Moreover, since 2003, a number of Japanese companies established a batch of parts joint venture factories in Guangdong, Tianjin and some other areas. Some evidences indicate that the Japanese market has begun to have demand for China’s parts products.

Yan Jianlai believes that, along with the cost decline to a great extent of the global vehicle manufacturing industry, it is almost impossible for the Japanese automotive companies to greatly reduce their costs through their own efforts while ensuring the product quality and performance. However, China is a very option for them to seek a breakthrough. He said: “along with the upgrading of the advantages of the vehicle manufacturing in South Korea, China and India, the costs for global vehicle manufacturing have fallen significantly. The possibility for Japanese companies to reduce costs simply by expanding the size of the market is very small. The rise of the prices of raw materials and labor costs in Japan has made the Japanese automotive companies gradually accept the concept of global sourcing for parts.”

The access of China’s automotive parts companies to the Japanese market has opened. However, the greatness of the access still relies on the joint efforts of all parties. Yan Jianlai told the reporter: “Since 2005, the opportunity for the access of China’s automotive parts to the Japanese market has come. Owe to the exchange with the companies, I have found that their biggest concern now is the high cost for opening up the Japanese market. As an industrial organization, we have the responsibility to help companies to establish a platform to promote their products, which is also the reason for the establishment of the Center.”