Spare parts market holds promise for companies

Chinese manufacturers of auto parts and accessories have set their sights on the promising African market in a bid to grow their market share.

The demand for such products in Africa is growing by 11 percent year-on-year and is expected to be worth $15.3 billion by 2020, according to Frost and Sullivan, a global consultancy firm.

The firm says there are nearly 22 million vehicles on the continent's roads today, creating demand for parts and accessories worth more than $8 billion per year. This makes the market increasingly significant for global manufacturers of accessories and engine components, such as bearings, brake pads, spark plugs and filters.

Chinese exhibitors at a trade fair held in Nairobi, Kenya, from April 11 to 13 expressed interest in the market, seeing it as huge and promising.

Henry Wang, sales manager of Ningguo Feiying Auto Spares Co Ltd, in eastern China's Anhui province, says there is plenty of growth potential in the African market.

His company already has a presence in South Africa, Zimbabwe and Tanzania, with current annual turnover amounting to $10 million. It plans to double that number within the next two years.

"We look forward to replicating that success in other African markets, starting with Kenya. We are committed to quality, right from the selection of raw materials, manufacturing and packing to final shipment," he says.

Ningguo Feiying Auto Spares specializes in brake linings, clutch facings and clutch discs. The company has an annual production capacity of 15,000 tons of brake linings, 800,000 sets of clutch discs and 300,000 sets of clutch covers.

Similar sentiments are shared by Aurora Shen, sales manager of Shenyang Kuntai Auto Parts Co Ltd, an engine manufacturer based in China's northeast Liaoning province.

Shen says the market is promising and her company looks forward to having a presence in several African countries.

"I talked to many customers and they liked our products. We are currently looking for Kenyan dealers to sell them," she says.

However, Chinese companies will have to work hard to penetrate the market, as secondhand spare parts are popular in Africa.

Most of the used parts are sourced from damaged cars sold by insurance companies and police auctions in developed countries at very cheap prices. They are exported to developing economies like those in Africa and sold at cheap prices, the reason they are so popular.

Nobert Njoroge, sales representative for Wenzhou Hairun Auto Parts Co, based in eastern China's Zhejiang province, understands that penetrating the market with new spare parts will not be a walk in the park.

"The first impression we got in Africa is that people are used to buying secondhand spare parts which are mostly sourced from Japan and Dubai," he says

Njoroge says his company is trying to explain to Africans the importance of new spare parts as opposed to secondhand ones.

"New spare parts may be slightly more expensive but they last longer. Our products are of good quality and they come with a one year warranty. Our first targets are South Africa, Egypt and Kenya," he says.

As part of their market entry strategy, Njoroge says they will approach African countries not just as clients but also as friends.

"We will apply a popular Chinese saying - that It's better to do business with a friend than a foreigner. Today, the relationship between China and Africa has grown, and the country is playing a key role in helping the continent in its development process," he says.

Wenzhou Hairun Auto Parts specializes in the production of automotive electronics, starters, starter armature rotors, coils and switches.

About 27 Chinese companies participated in the trade fair.

According to Expo Group, organizer of the fair, the market for automobile spare parts has been an attractive sector for global exporters, as Africa has witnessed a remarkable 30 percent increase in imports.

The group is planning to hold two similar trade fairs, one from May 12 to 14 in Addis Ababa, Ethiopia, and the other from Aug 16 to 18 in Dar Es Salaam, Tanzania.

edithmutethya@chinadaily.com.cn

(China Daily European Weekly 04/28/2017 page26)