Good news that auto parts exports are warming

“The recent exciting overseas automobile market is indeed a lot of news.” The exhilarating news of Wu Yankun, the director of Wanfeng Aowei, includes European countries’ successively introduced subsidy programs for car purchases. The United States, the main exporter of auto parts in China, began The implementation of the $3 billion “cash for used cars” plan, as well as the growth in car sales in Europe and the United States, was a good news.

The United States’ “Cash for Used Cars” plan stipulates that consumers will use new fuel-efficient cars for energy-saving new cars and will receive a $3,500 to $4,500 purchase discount. After the initial investment of one billion U.S. dollars was quickly exhausted, the U.S. House of Representatives voted in an emergency on July 31, adding an additional 2 billion U.S. dollars in subsidies.

United Securities analyst Yao Hongguang estimated that with an average of US$4,000/vehicle subsidy and US$1 billion, it could boost 250,000 vehicle sales. The plan will continue. In the second half of 2009, the monthly growth of light vehicle sales in the United States will exceed 25%.

In July, car sales in Europe, America and other countries experienced long-term and substantial growth. According to statistics, the US monthly sales in the auto market in July hit its highest monthly sales since August 2008. Sales of French family cars rose for three months. New car sales in Germany increased by nearly 30% in the same period last year.

Yao Hongguang judged that auto parts export companies will benefit from the rebound in sales in Europe and the United States. The fastest at the end of the third quarter, and later in the fourth quarter, the export orders of the export-oriented enterprises represented by Fuyao Glass and Zhongding Stocks will show more significant growth.

Although we can't see the chain effect of the overseas auto market, Cheng Xiaowu, director of China Ding Co., Ltd., looks very optimistic. “The auto parts in the second half of the year are better than the first half of the year. This is inevitable.” He said that overseas zero in the first half of the year. The component market is basically digesting inventory. Now that the financial crisis has basically bottomed out, it is inevitable that demand will improve in the second half of the year. However, the increase in sales volume in overseas auto markets has a process of stimulating the export of parts and components in China. The effect is not expected to be apparent until September and October.

Like Wu Yankun, director of Wanfeng Aowei, Cheng Xiaowu is very concerned about the sustainability of the overseas automobile market stimulus policies, and whether the increase in car sales can lead to an increase in car production. The increase in automobile output in overseas markets will directly boost demand for auto parts. At the same time, both said that even if the stimulus policy can drive the export of auto parts, the impact is different for different export companies.

For Wanfeng Aowei, its export products are mainly for the mid-to-high-end market. If the auto market stimulus policy is aimed at the low-end market, it will have little impact on the company's performance. At the same time, auto parts products have strong specificity and poor generality. Different parts and components exporters' products have targeted models and customer groups. The recovery of exports depends on the degree of recovery of foreign customers.

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