China’s automotive component industry has passed through five major stages of industrialization. The country is now accelerating the development of advanced technologies and working to break overseas technology monopolies, although key automotive components still depend heavily on imports.

Domestic supply capacity continues to improve. As the vehicle market and global sourcing have expanded, China has developed the world’s largest automotive component supply system, with broad product coverage and a complete supporting chain. During 2021–2022, many listed component manufacturers continued to increase investment in the market.

Demand is gradually recovering. OICA data show that global and Chinese vehicle output fluctuated from 2012 to 2021. China maintained relatively stable output in 2020 and production recovered in 2021–2022, reaching 27.011 million vehicles in 2022. This indicates improving demand from vehicle manufacturers.

The aftermarket also provides substantial demand. China’s vehicle parc grew by more than 9% annually from 2010 to 2018, reaching 281 million vehicles by the end of 2020 and 302 million by the end of 2021.

Domestic supply and demand are therefore improving, but external pressures remain. Trade friction, the pandemic and the global semiconductor shortage affected production and exports. In 2021, China’s semiconductor self-sufficiency rate was about 15%, while the rate for automotive chips was below 5% and more than 90% of automotive chips were imported.

Overall, supply and demand for low- and mid-range components are broadly balanced, while high-end components remain in short supply.