Wonder Auto expects sharp rise in overseas sales
Chinese auto parts maker Wonder Auto Technology expects to generate 30 per cent of its sales overseas as early as 2010.Updated: May 24, 2007 13:39 IST
Chinese auto parts maker Wonder Auto Technology expects to generate 30 per cent of its sales overseas as early as 2010, up from 5 per cent in 2006, as it follows home-grown auto makers pushing for sales abroad, its chief executive said on Thursday.
When the country's second-largest maker of starters and alternators started to ship its products outside China three years ago, exports accounted for less than one per cent of its annual sales, Zhao Qingjie told Reuters in a telephone interview.
Zhao, who founded Wonder Auto 10 years ago, said he saw business opportunities overseas as more home-grown automakers, which had previously focused on China and developing countries, set their sights on mature markets.
"We are very interested in breaking into the replacement markets in the US. We want to be there for our OEM customers when they ship their vehicles to the States," he said.
Chery Automobile Co and Nanjing MG Rover are among its clients.
Chery, a mid-sized but fast-growing players in east China, has in late December reached a framework deal with
DaimlerChrysler AG to build small cars under the Chrysler badge for sale in the US and elsewhere.
Nanjing Auto, which surprised the industry in 2005 when it took over the major assets of failed British car maker MG Rover, planned to roll out the vintage British brand in China and British Commonwealth countries in the second half.
Wonder Auto, which also supplies the local vehicle ventures of DaimlerChrysler and Hyundai Motor among others, commands a 15 per cent share of the domestic market for alternators and starters, lagging the 20 per cent share held by market leader Shanghai Valeo Automotive Electrical Systems Valeo's tie-up with SAIC Motor Corp.
In 2006, Wonder Auto booked $72.2 million in turnover, up 50.1 per cent from 2005, with sales estimated to top $100 million this year, the firm said previously.
By comparison, turnover at Shanghai Valeo came to 1.0 billion yuan ($130.7 million) last year, according to Zhao.
But the 50-year-old chief executive, who controls roughly 30 per cent of Wonder Auto, said his company could claim the top spot as early as next year, when volume sales of alternators and starters could jump by between 30-40 percent as it recruits more clients, such as the local ventures of Volkswagen AG
"I think we can definitely catch up with Shanghai Valeo by 2009 if not next year," Zhao said.
In 2006, Wonder sold 2.05 million alternators and starters. That could climb further to nearly 3 million units this year, he added.
In the longer term, Wonder Auto aims to be a top-five supplier of alternators and starters globally to compete with industry giants, such as Robert Bosch GmbH, in China and elsewhere, Zhao said.
To get there, Wonder will continue to buy rivals at home and abroad if opportunities arise, Zhao said. In April it paid $16.42 million for the 80 per cent of a local supplier, Jinzhou Wanyou, that it did not already own.
Wonder Auto, whose common shares have traded on the bulletin board since mid-2006, applied in March to list on the Nasdaq global market to aid its expansion. The approval process usually take several months.
"It took 10 years for us to be the number-two player in China. We hope to me a among the global top five in the next 10 years," Zhao said.