China’s auto components manufacturers hard to defend themselves before the freezing signal

Consulting stringent Alix Partners pursued the fresh survey demonstrates that China’s auto sales this year of upheld growth, the automotive parts providers are facing dangerous liquidity difficulties, may lead to finance in the next 12-18 months, the drop of .

Because numerous Chinese auto components suppliers to depend on trade items earnings, so they can not take full benefit of the robust presentation of the household market. Alix Partners, said in the report, from a chronicled issue of outlook, China’s auto components commerce, about a quarter of income arrives from exports. 40 taking part in the review about 60% of enterprises said they would dynamically elaborate the household market to reimburse for the down turn in revenue.

More severe market conditions, it also exposed the Chinese automotive component supplier in the management of the supply chain and operational deficiencies. Chinese companies need more working capital more than double global counterparts.

Alix Partners, said the fourth quarter of terminal year, China’s auto parts providers toiling finance requires of the average was 74 days (calculated based on average sales revenue), equated with 37 days for U.S. and European companies. Alix Partners said that the profitability of outlook, the performance of Chinese enterprises as interchangeable enterprises in the world, simply the average profit boundaries of U.S. businesses is even smaller than China.

Involved in the investigation of 40 companies, said more than 20% net loss in 2008, half of this year, the company forecast profit margins less than 5%. Even so, China’s auto parts suppliers are still looking for mergers and acquisitions on domestic and international market opportunities.