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Auto Interior Decoration Parts Companies are meeting development dividends

Auto Interior Decoration Parts Companies are meeting development dividends

May 19,2017

Auto decoration parts are important components for auto systems, including interior decoration parts and exterior decoration parts. Founder Securities believes that three factors including the rise of domestic brands, substitution from local products and consumption upgrade will together bring in the development dividends for domestic auto interior decoration parts companies.

Industrial transformation brings in substitution from local brands

Global auto interior decoration part industry is meeting changing supply patterns, with capacity relocation, industrial transformation and technological progress creating opportunities for domestic substitution. Firstly, global auto interior decoration capacity is gradually transforming to domestic market. Secondly, domestic interior decoration companies are obtaining increasing market shares when competing with foreign and joint-venture companies. Finally, global auto part giants are leading the adjustments of business segments by gradually giving up traditional business for new layouts, setting room for domestic companies.

Vehicle interior decoration value increases

Domestic auto interior decoration industry keeps a high growth of 20%-30% in the past three years when growths for global giants are slowing down. Increasing demands for self-independent brands’ decoration market and rising vehicles’ values will bring in the growing revenues and product upgrades for downstream factories.

The growing domestic per capital income will also bring in continuous consumption upgrade. Auto interior decoration has become an important factor in deciding consumers’ purchase option. In the meantime, auto interior decoration will meet high-end trends when auto industry is undergoing industrial upgrading.

The proportion of auto interior decoration in vehicle’s unit price is also continuously growing from 10% in 2011 to 18% in recent years. In the future, the market will further be opened.

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