China sets sights on foreign auto parts makers: report

By Kim Young-gyo HONG KONG, July 20 (Yonhap) -- Chinese auto parts manufacturers are likely to rev up their efforts to take over foreign industry players in a bid to hone technological competitiveness, a report said Wednesday. Earlier this month, China's auto parts firm Citic Dicastal Wheel Manufacturing Co. agreed to buy German part maker KSM Castings Gruppe. Citic Dicastal is a unit of Beijing-based Citic Group, China's leading state-owned investment company. Germany-based Roland Berger Strategy Consultants said in the report that more Chinese auto suppliers will make bids for their European peers as they try to secure market share and gain technological expertise. The latest trend will allow the Chinese firms to combine lower costs in China with the engineering prowess of Western countries, the consulting firm said. While Chinese investors often failed in takeovers due to their lack of willingness to pay or lack of professionalism in the past, their attitudes have changed now, Roland Berger Strategy explained. "Chinese investors now know that good companies cost a lot and they are willing to pay. They have also made their takeover processes much more professional," said Thomas Wendt, principal consultant at Roland Berger Strategy. Chinese suppliers' expansion into the European and U.S. market is also partly due to the Chinese government's economic policies, the firm added. China's official five-year economic development plan covering 2011-2015 encourages its companies to improve their technological position by investing abroad and thus becoming global market leaders in their specific segment. The Chinese car industry aims for annual growth of at least 10 percent, a government plan showed. By 2012, car production in China is set to be 22 percent higher than in 2007. In 2010, China was the largest automobile market in the world for the second year in a row, with indigenous and foreign car makers churning out 18.26 million vehicles during the one-year period. The world's No. 2 economy also aims to boost its vehicle exports, which currently account for a relatively small slice of the global market. Last year, China exported 282,900 units of passenger cars and 261,900 units of commercial vehicles.