Along with China`s rapid increase in car ownership and its emergence as the world`s second-largest auto market, the Chinese auto-brake industry has also scored vigorous expansion in recent years in terms of both output and exports. To continue its robust growth in the future, however, the industry will have to overcome obstacles imposed by low levels of technology and small volumes of production.

Makers of brake products have proliferated in China, thanks to a relatively low entry threshold; today they number over 500, with more than 80% being small in scale. This large number of manufacturers has led to excessive supply at home, and growing numbers of Chinese auto-brake makers are shifting their sights abroad in response; but most of them are focusing on low-end markets, which they are trying to develop by resorting to price competition. This practice, in turn, has attracted anti-dumping charges in a number of countries.

The plight of these exporters will be aggravated by the gradual elimination of export incentives, such as tax rebates, made necessary by China`s membership in the World Trade Organization (WTO).

But changes are fortunately in store; frustrated by repeated outbreaks of trade friction, many Chinese brake makers have become aware of the importance of technological innovation and are endeavoring to upgrade their products. They are aided in this effort by a common R&D platform which the Chinese government has provided for the auto-parts industry. Investment in China by major international brake makers is adding further stimulus to the upgrading of the brake industry by bringing in advanced technology and management while also enhancing overall manpower quality.

Much progress has been made in recent years, as evidenced by the popularity of Chinese-made ceramic brakes in the international market. The government has helped by imposing more stringent standards on brake exports and cutting off the flow of substandard products into overseas markets.

One of the leading makers of brake products in China is the Helilai Braking Material Factory of Guangdong Province, which was founded in 1998 and turns out semi-metal auto drum and disk brakes as well as a variety of motorcycle accessories and stamped parts. The company boasts a work force of over 100, including 15 veteran engineers who help to carry out R&D in-house.

Heililai`s chairman, Chen Panxi, stresses that "We purchase quality raw materials, such as fiber from Dupont, and import advanced manufacturing and testing equipment to assure product quality." Ninety percent of the company`s output is sold domestically; the remaining 10% is shipped abroad, mainly to Vietnam, Myanmar, Russia, and Pakistan.

Established in 1994, the Anchi Co. produces brake shoes and other materials, mainly for the aftermarket. Marketing manager Xu Fengyang notes that the company has passed ISO9000 certification, and that most of its products are shipped abroad. North America is the largest overseas market, accounting for 30% of total exports; other major overseas markets include Europe, Korea, and Japan.

(by CENS)

2008/04/22

Source: news.cens.com