Capability Building in China’s Auto Supply Chains

E REPORT on plant visits and data collection carried out in China and present our initial preliminary findings. Eight assembly plants with their respective seat, exhaust and brake suppliers were visited in 2006. Two ECU (engine control unit) suppliers were also interviewed. Where possible, we compare our findings with the situation in China in 2003 and with current best practice worldwide. Information collected pertains to productivity, quality, structure and evolution of the supply chain, engineering capabilities, and relationships with other firms. The outline of this preliminary report is as follows. First, we present our main findings. Second, we give some background information about our ongoing global supplier survey and the automobile industry. Third, we examine four key factors that are driving changes in China’s auto sector. We present both aggregate data and detailed observations from our plant visits that formed the basis for our preliminary conclusions.1 Fourth, we discuss some of the implications of these developments in China for auto-parts suppliers in Canada. W BRANDT & VAN BIESEBROECK