I. Project Background
1. Location advantage: as core group city of Wuhan “8+1” city circle, with establishment of interurban railway and highway, Yingcheng will integrate with Wuhan and become an important strategy pivot occupying central and western regional market in processing and manufacturing industry.
2. Transportation advantage: with commissioning of Wuhan-Jingmen section of Hangzhou-Lanzhou Expressway, Yingcheng is only 53km from Wuhan central city and it takes 30 minutes to reach Wuhan city center and 40 minutes to reach Tianhe Airport. Changjing Railway crosses the whole area and there is one passenger station and one freight station. Wuhan-Chongqing Railway, provincial Hankou-Yichang Highway, Wuhan-Xiangfan Expressway and Shanghai-Chengdu Expressway cross the area. Inland water transportation is connected with Han River and Yangtze River and megaton water transport terminal is built in the city center.
3. Cost advantage: water and electricity in Yingcheng is in abundant supply. Daily power supply capacity in the city center is no less than 220MW and electricity price in the valley period of great industry is only 0.252yuan. Water supply capacity can completely satisfy demand of urban industrial production and people’s life. Current price standard of industrial water is 2.3yuan/m3. Current price standard of industrial natural gas is 3.05yuan/m3. If annual demand is enormous, the price can be reduced to 3yuan. Labor is abundant and labor cost is low: common worker 1000-1500yuan/month, skilled labor 1200-2000yuan/month.
4. Infrastructure advantage: textile and garment industrial park under planning and construction has completed infrastructure construction such as land leveling, main road, water supply and drainage, power supply, sewage treatment and Wuhan-Jingmen Expressway linking the park with the outside and Yingcheng connection line have been built and open to traffic.
II. Market Analysis
In 2010, the total output value in Chinese automobile parts industry exceeds 1.5 trillion and amount of imports and exports is up to 37.3 billion US dollars. Under the precondition of retaining automobile after-sales service in markets, automobile manufacturer’s double demands of automobile parts will bring an annual growth of about 20% to 30% for that industry. In the future, the development of parts industry will be faster than the growth of the whole automobile industry. In the first half year of 2011, accumulative total export of 8 kinds of automobile parts in our country is 21.229 billion US dollars and it is faster than the growth of total parts import. In 2011, consumption in automobile market in our country will grow rapidly and automobile consumption in second and third-tier cities and even of fourth and fifth-tier cities in 2011 will exceed consumption in first-tier cities. In 2011, the automobile market will have a smooth and steady growth of 10% to 15%.
As for export enterprise quantity of automobile parts, enterprise of self-owned brand, joint investment and individual proprietorship respectively holds 50%. As for export products quantity and constitution, export volume of parts in joint investment and individual proprietorship hold 30% of the total volume of export and value of exports holds 70% of the total export of parts and most of it are high-end products. Export volume of enterprise of self-owned brand holds 70% of the total export and value of exports holds 30% of the total export of parts and most of it are lower-end products. In 2011, the vehicle inventory in China is 225 million and automobile inventory exceed 100 hundred million and the higher the automobile inventory is, the higher automobile parts demand will be and thus the larger automobile parts market will become. Under good development condition of finished automobile, Chinese automobile industry will bring development and a huge number of business opportunities for automobile parts industry throughout the country. Auto parts enterprises have huge development space. According to standards of international operation, the scale proportion of finished automobile and parts in automobile industry shall be 1:1.7, but the total output value of automobile parts in our country can not exceed total output value of finished automobile manufacturing industry and the scale proportion of two is only 1:0.7. Therefore, there exists great potential in automobile parts industry in our country.
III. Project Scale and Content
The planning area is 1000 Mu and there are 20 to 30 automobile parts manufacturers settling down which concentrate on solving weak, small and scattered problems existing in automobile parts enterprises; promote product quality for settled enterprises and provide matched convenient conditions, reduce production cost and enhance competitiveness, thus creating conditions for entering international supply chain.
IV. Investment Estimation
Predicted total investment of the project is 1 billion yuan.
V. Cooperation Mode
Sole proprietorship, joint investment and cooperation
VI. Project Progress
The project has been listed in the plan and research work in earlier stage has been finished.
VII. Benefit Prediction
It is predicted that the annual turnover is about 1 billion yuan after the project is completed.
VIII. Contact Information
Project organization: Investment Promotion Bureau of Yincheng District, Xiaogan City, Hubei Province
Contact person: Liao Zhenwen