The entire vehicle and parts industry propped up the Guangzhou auto industry for a day

In recent years, Guangzhou has made significant progress in developing its automotive industry. A notable milestone was the formal establishment of "Daikaxu" Aluminum Alloy Wheel Co., Ltd., a joint venture between Guangzhou Dongling Group, Daica Wheel Manufacturing (a subsidiary of China International Trust & Investment Corporation), and Japan's Asahi Corporation. This development reflects Guangzhou's growing influence in the auto parts sector. With the success of Honda Motor in Guangzhou, numerous R&D and manufacturing units for car wheels have also set up operations in the city. To date, over 50 core suppliers of Honda parts—companies with decades of global experience working with Honda—have either already settled in or are in the process of establishing themselves in Guangzhou. This strategic move highlights Guangzhou’s vision: to attract and develop the auto parts industry through the automotive sector, while simultaneously boosting the entire vehicle industry by strengthening its supply chain. Parts are often referred to as the "big head" of the automotive industry. In recent years, Guangzhou has seen rapid growth in its automobile sector, with major Japanese automakers such as Honda, Nissan, and Toyota setting up operations in the city. The successful assembly of three major Japanese car brands in Guangzhou underscores the city's role as a key player in the industry. However, Guangzhou is well aware that the automotive industry is a long and complex supply chain, with parts and components forming its foundation. Technological upgrades and cost reductions rely heavily on the advancement of the parts industry. The competition among automakers is largely determined by the scale and quality of their component production. Without a strong local parts industry, the entire vehicle industry would remain just an "assembly industry," lacking real innovation and intellectual property. Lin Shusen, a member of the Standing Committee of the Guangdong Provincial Party Committee and Secretary of the Guangzhou Municipal Party Committee, once gave a relevant example. He recalled that Guangzhou used to be famous for producing "Wuyang" bicycles, with multiple factories producing everything from frames to pedals and chains. But later, as smaller factories around the city began producing bicycle parts, the original large factory faded into obscurity, replaced by small repair shops that simply assembled parts. A similar pattern emerged with motorcycle production—once seen as complex, it now thrives in Guangzhou, where a robust network of part manufacturers supports more than 20 motorcycle companies. This shows that the assembly industry is only a small part of the broader industrial picture. Today, the automobile industry is booming, but it shares many similarities with the past industries of bicycles and motorcycles. Once the auto parts industry reaches a high level of development, the design and production of vehicles will become much easier. To accelerate the growth of the auto parts industry, Guangzhou has focused on investing along the industrial chain. Currently, the city has over 50 specialized auto parts companies and more than 200 firms with auto-related capabilities. In 2003, the output value of auto parts reached about 11 billion yuan, though it still lags behind the overall auto industry. The ratio of auto parts to整车 (complete vehicles) output is roughly 1:1.7. Guangzhou aims to increase this ratio to 1:0.67 within the next decade, with the auto parts industry reaching 100 billion yuan in output value. One effective strategy is to leverage existing vehicle production capacity and encourage core suppliers to establish factories in Guangzhou. To achieve this, the city has sent investment teams to visit Japan, South Korea, Malaysia, and Hong Kong and Taiwan, seeking partnerships with advanced auto parts manufacturers. Over 70 Japanese companies have been invited to set up operations in Guangzhou, and in 2003, the city saw a major breakthrough in foreign investment in the auto parts sector, with contracted foreign investment reaching USD 313 million—a 1.65-fold increase compared to the previous year. Companies like Aipake, Aiji, and Stanley have entered the market, helping to form clusters in areas such as Huangpu, Huadu, Zengcheng, Baiyun, and Nansha. In addition to Honda's core suppliers, Dongfeng Daily's production base has also moved to Huadu. In 2003, over 110 auto parts companies visited Huadu, with 32 settling there and seven more under construction. The "Daikaxu" aluminum alloy wheel hub project, a joint venture between Honda's core supplier Asahi, China International Trust & Investment Corporation, and Guangzhou-based Dongling Group, aligns perfectly with Guangzhou's vision for the auto parts industry. The first phase of the project involves an investment of 170 million yuan, with a production capacity of 1 million wheels. Upon completion, the facility will produce 5 million wheels annually, providing hubs for one million vehicles. It will become one of the largest aluminum wheel R&D, production, and sales bases in China. Asahi, which holds over 35% of the domestic wheel hub market in Japan, is not limited to just wheel hubs. The company also produces various electromechanical and environmental equipment, including parts for aircraft and automobiles. They possess advanced technologies such as low-pressure casting and ultra-precision machining centers. Asahi is eager to explore cooperation opportunities with Chinese companies. Source: People's Daily

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