With passenger-car sales growth slowing in the important Chinese market, European suppliers need to review their global strategies in 2011, according to Roland Berger.
The consultants expect passenger car unit sales in China to continue to grow from about 11 million units in 2010 to more than 18 million in 2015. But the growth ”“ 35 percent a year on average between 2001 and 2007 - will be less torrid in coming years. Roland Berger forecasts 10 percent growth in 2012, 9 percent in 2013 and 8 percent in 2014.
Almost 20 percent of supplier revenues in Europe now depend on the Chinese market. But Roland Berger warns that sales of western suppliers in China, will not necessarily prop up their global business in 2011 and beyond.
The consultants’ advice: “Plan volumes very cautiously for 2011 and beyond and base them on multiple scenarios.”
Second, the Munich-based consultants note that, as European suppliers produce more components in China, delivery volumes in Europe are under pressure.
And third, rising labor costs and an appreciating yuan make parts exports from China less attractive. At the same time, improved local skills and r&d capacity mean suppliers should take a close look at their business in China.
Said Roland Berger partner Marcus Berret: “Western auto suppliers need to urgently revisit their current business model for Chinese operations in order to retain their market positions in China.”