Increased competition in the domestic automotive bearing market
The Chinese bearing market is currently experiencing significant turbulence. A wave of acquisitions by multinational bearing companies targeting China's key domestic manufacturers, along with mergers and acquisitions among local players, has drastically reshaped the competitive landscape in the automotive bearing sector. At the same time, foreign firms are ramping up their investments in China, with new joint ventures being established one after another.
Recently, SKF, the world’s largest bearing manufacturer, held its first global board meeting in China. During this event, two new joint ventures were launched, increasing the number of SKF companies operating in China from six to eight. This marks a major step in SKF’s long-term strategy to deepen its presence in the country.
China is the fourth-largest bearing market globally and also a major producer. Eight of the world’s top multinational bearing companies have set up joint ventures or wholly-owned plants in the country. As a result, international competition has become a defining characteristic of the domestic bearing industry. Through these joint ventures and acquisitions, China’s bearing industry is gradually integrating into the global supply chain. Those who occupy key positions in this chain hold a significant advantage in terms of technology and capital. Currently, technological capability plays an even more critical role in shaping market segments.
SKF President and CEO Johnston noted that the biggest change in China’s auto market is “the customer’s expectations for us have become synchronized with the global standard.†This shift presents new opportunities for SKF and other multinational companies to quickly penetrate the Chinese market.
In recent years, the rapid growth of China’s automotive industry has led to faster introduction of new car models each year. Many of the latest global models are now available in China, raising the bar for the domestic parts industry. Car manufacturers now demand that components be developed in sync with international standards. However, China’s auto parts industry still lags behind, unable to fully meet these rising demands. This gap has created a huge opportunity for multinational bearing companies with advanced technology and products.
For example, in the case of passenger car hub bearings, in 2005, China produced around 2.8 million cars, with over 120 new models introduced that year. Mid-to-high-end vehicles often rely on foreign joint ventures or subsidiaries for their first- and second-generation wheel bearings. SKF’s Chinese factories supply not only major foreign brands like Shanghai Volkswagen, FAW-Volkswagen, and Shanghai GM, but also Chinese brands such as Brilliance, Chery, and Changan. In this environment, multinational companies with advanced technology can easily enter the domestic market and dominate the supply chain for mid- to high-end vehicles.
The trend toward unitization and modularization is shaping the future of automotive bearings. This year, SKF’s new factory in Jiading, Shanghai, is about to open, equipped with a production line capable of manufacturing third-generation wheel hub units. According to Zhu Yingjian, general manager of SKF Automotive Bearing Co., Ltd., the new plant will not only produce third-generation units but may also serve as a platform for any new SKF product. The facility emphasizes both increased production capacity and the introduction of new technologies and products tailored for the Chinese market.
With strong technical capabilities, SKF is now expanding into the commercial vehicle market in China. Facing the growing dominance of multinational bearing companies, Chinese domestic brands are no longer content to remain in the low-end market. Instead, they are focusing on innovation, technological advancement, and shifting toward a more sustainable economic model.
For instance, Xiangyang Automobile Bearing Group, a leading domestic manufacturer, recently began mass production of car bearings, with orders reaching as high as 100,000 sets. Their bearings are used in popular models such as Beverly, Jetta, Beijing Hyundai, Chery, and others. The technical sophistication required for producing these bearings is becoming a new driver of economic growth.
Wanxiang Group has established large-scale production of third-generation wheel hub units, supporting several international and domestic car brands. Meanwhile, Luoxi Group’s car wheel bearing project and LYC’s heavy-load bearing transformation project have become key investment priorities in Luoyang this year.
While multinational companies continue to capture the mid- and high-end market, Chinese manufacturers are under pressure but also seizing opportunities. To reduce costs, many local bearing companies are expanding production scale, training local suppliers, and transferring some technologies. For example, SKF’s products made in China are now fully localized, and the upcoming Jiading plant aims to achieve 100% localization. Moreover, SKF exports products sourced from Chinese suppliers to overseas markets.
Experts suggest that for China’s auto bearing manufacturers, independent innovation should be prioritized. By following a path of technology introduction, absorption, and innovation, China can build up its technical experience and gradually strengthen its position in the global market. Learning from joint ventures with foreign firms can help accelerate this process.
The competition in China’s auto bearing market is far from over. While multinational joint ventures and wholly-owned enterprises dominate the mid- and high-end segment, Chinese domestic manufacturers are pushing further into the market. It is clear that the competition will intensify, and the market dynamics will become even more complex.
However, from a broader perspective, the Chinese bearing market has two potential outcomes: First, it will continue to grow, gaining greater influence on the global stage. Second, the technological strength of Chinese companies will see a significant leap in competitiveness. The future of this market looks promising, though the road ahead remains challenging.
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