(Yicai) Aug. 23 -- China’s top 100 vehicle components manufacturers posted an average profit margin of 7.2 percent last year, bigger than the global top 100's which was at 6.1 percent, driven by the rapid development of China’s automobile industry and especially new energy vehicles, according to a recent report.

China’s top 100 automobile parts makers raked in profit of CNY118.1 billion (USD16.5 billion) last year, according to an annual report on the competitiveness of core firms in the global automotive supply chain that was released yesterday. They reported a 7.2 percent profit margin last year, up from 2022’s 5.9 percent.

The country’s new energy vehicle parts makers had the widest profit margin at 15 percent, followed by that of fossil fuel-powered auto components manufacturers at 7 percent, while lightweight car parts makers’ was 5 percent and that of producers in the vehicle electronics and engine sector was 4 percent, according to the white paper compiled by China Automotive News and German management consultancy firm Roland Berger.

The smart and new energy transition will be a major driving force for the earnings growth of auto parts companies, the report said. Revenue growth of the new energy and intelligent auto parts businesses of the top 100 Chinese auto parts companies accounted for 34 percent of the total industry added value last year. Profits surged 36 percent and the industry’s net profit tripled for the second consecutive year.

Industry leaders are seeking new growth points with the help of high-end intelligent components, such as active safety systems and smart cockpits, the report said. However, the profit margins of the smart component industry still have room to improve due to the huge investment in research and development, as well as their relatively restricted application scenarios so far, it added.

The new energy field has become an important source of revenue for auto parts makers. The five new energy companies that made the top 100 are all battery suppliers, with Contemporary Amperex Technology ranking the highest. The primary business of more than half of the 11 new faces on the list this year is related to new energy or intelligence.

The top 10 companies on the China list are suppliers of batteries, automotive electronics, tires, wheels and other parts. The top 13 Chinese firms are all on the global top 100 auto parts companies ranking. CATL, Weichai Holding Group and Huayu Automotive Systems made the top 20 on the global list.

Chinese automotive supply chain companies have seized rare development opportunities from the rise of new energy intelligent connected vehicles and have built their own industrial supply chains, said Ye Shengji, chief engineer of the China Association of Automobile Manufacturers. But China still has a long way to go before it becomes an auto parts power.

Editors: Tang Shihua, Kim Taylor