Expanding car production helps HK suppliers

Hong Kong's electronics and vehicle-parts companies are setting their sights on the mainland as the country's expanding car-manufacturing industry lifts demand.

'The mainland had a late start in car manufacturing, so the level of its industry is relatively lower,' said Hong Kong Electronic Industries Association chairman Chan Kei-biu yesterday.

'Hong Kong companies have advantages in this area, especially electronic car parts.'

Mr Chan is part of a business delegation led by Chief Executive Donald Tsang Yam-kuen to the mainland's northeast to seek business opportunities.

Mr Chan is the chairman and senior managing director of Surface Mount Technology which opened two vehicle-parts production lines in Changchun last year. He said many Hong Kong electronics companies had switched their focus to vehicle parts.

To enter the huge vehicle market in China, he said Hong Kong companies should invest in scientific research to improve both the quality and technology of their products.

The Hong Kong Auto Parts Industry Association signed a memorandum of understanding with the mainland's vehicle-parts testing centre in Changchun yesterday. Association president Gordon Chan Yan-ting said the agreement would allow Hong Kong companies to test their vehicle parts in Changchun, instead of in Detroit or in Germany. Sending a sample to Germany for testing costs HK$30,000, while it only costs HK$7,000 to do it in Changchun.

'About 5 per cent of the vehicle parts manufactured in Hong Kong are for the Chinese market,' Mr Chan said. 'It is expected that the figure would rise to 40 per cent in five years.'

Changchun is the capital city of Jilin province, where vehicle manufacturing is one of the pillar industries.