On a recent trip to China, Simon Duval Smith met with many car makers, domestic and joint venture companies to find out about their plans for the future and current challenges.
Several important themes emerged during my discussions with senior manufacturing executives: primarily the need for tier suppliers to raise their game and provide consistent quality components, delivered on time. Also high on the wish list of OEMs seems to be more sophisticated capacity planning.
As domestic companies grow rapidly in output and number of locations, the industry is starting to face similar challenges to those encountered by global OEMs; how to optimise production capacity and bring it closer to the customer. This particularly pertinent in China; the sheer size of the country means that new customers are increasingly found in regions a long way from the nearest production base. And given the slow transport links to many parts of the country, its domestic OEMs are starting to think of opening facilities in previously economically deprived areas, where increases in the standard of living and disposable income have garnered them a new customer base.