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Difficult challenges ahead in development of China’s supply base

Insights
Acquisition, divestment & Spinoff

Complex logistics, OEM bias towards local players and low technological vehicle content have favoured significant fragmentation in the supply base. National champions might emerge as some of these factors become less challenging for the development of the local supply base.

Organically formed as the outcome from the development of the automotive industry at OEM level, the automotive component supply base in China is characterised by its fragmentation, formed of approximately 20,000 companies supplying 108 automakers.

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