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Although energy conservation and environmental protection have become central concerns across the entire automotive industry, the auto parts sector still lacks a deep understanding of these issues. While awareness is growing, there's still much room for improvement. In addition to raising awareness, auto parts companies should consider several key areas to better align with sustainability goals.
First, enhancing technical capabilities and developing eco-friendly products is essential. A company’s research and development (R&D) capacity directly influences its competitiveness in the market. However, many Chinese auto parts manufacturers still face challenges in R&D, with limited innovation and low technological content. According to Chen Guangzu, a member of the China Automobile Industry Advisory Committee, very few domestic suppliers are capable of conducting high-level R&D in line with vehicle systems. Key sectors such as electronic control units, fuel injection systems, sensors, and braking systems remain dominated by foreign firms. Even in lower-end manufacturing, foreign brands are increasingly entering the market, intensifying competition.
This weakness in R&D also extends to energy-efficient and environmentally friendly products. For example, high-performance brake pads used in vehicles are largely imported, highlighting the need for domestic innovation. As the number of vehicles on Chinese roads continues to rise, addressing the environmental impact of components like brake pads becomes more urgent. Improving the overall technical level of the friction materials industry is therefore critical.
Second, focusing on remanufacturing offers a promising path toward sustainability. Remanufactured parts can meet the same quality standards as new ones, while significantly reducing costs—often by 50% or more—and saving up to 60% in energy and 70% in materials. The environmental benefits are substantial, making remanufacturing a powerful tool for energy conservation and emission reduction.
Volkswagen, for instance, produced 7.48 million engines in 1947, which led to a reduction of 570,000 tons of COâ‚‚ emissions, saved 33 million tons of resources, and cut sulfur dioxide emissions by 5.69 million tons. Additionally, it saved 959 million kilowatt-hours of energy and 46,876 tons of aluminum. Shanghai Volkswagen Beide Powertrain Co., Ltd. has manufactured over 13,000 engines, proving that remanufacturing is both economically and environmentally beneficial. The cost of remanufactured engines is about 55% of new ones, allowing users to save around 7,000 yuan.
Remanufacturing has been well-established in many countries for over 50 years, but it is still in its early stages in China. Caterpillar, the world’s largest remanufacturer, estimates that China’s auto remanufacturing market could reach $10 billion annually. Currently, only a handful of formal remanufacturing companies operate in the country, with fewer than 10 total companies involved in auto parts remanufacturing. This presents a significant opportunity for growth.
From a national perspective, the Chinese government has recognized the importance of remanufacturing. Two State Council documents, No.21 and No.22, emphasize strong support for the remanufacturing of used mechanical and electronic products. Deputy Prime Minister Zeng Peiyan has also endorsed pilot projects in this area. With 35.86 million vehicles on the road and approximately 2 million scrapped annually, there is a vast supply of potential materials for remanufacturing.
Several major companies, including FAW Dongfeng, Yuchai, and Weichai, are already preparing to enter the remanufacturing space. As the industry develops, auto parts companies that adapt to these trends will be well-positioned for long-term success.