Some mainland vehicle-parts makers have been pushed into bankruptcy as car manufacturers demand price cuts amid slowing growth in sales, according to a KPMG market study. Thomas Stanley, KPMG's director of transaction services, said parts prices had been falling 10 per cent or more a year as increasingly competitive end prices forced makers to pressure suppliers for discounts. 'In some cases, further price cuts were asked mid-year,' he added. '[Profit] margins are getting much tighter in the component segment. 'Certainly, many companies are experiencing long-term liabilities pressure.' Parts manufacturers had gone bankrupt in the worst cases, KPMG quoted an interviewee as saying in a survey by the Economist Corporate Network. In addition to price pressure, both car and component makers also face problems associated with rising inventories. Some parts makers had resorted to stopping production to reduce the build-up, the report said. As raw materials account for as much as 80 per cent of a component maker's costs and many makers import a large amount of their supplies, they have little ability to pass on the price pressure to their suppliers. The problem is exacerbated by rising metal and plastic prices. Mr Stanley expected small-parts makers who lacked funds to invest in product development to become unviable in the fragmented car components industry, which has an estimated 4,700 players. The top 10 producers account for about 20 per cent of the industry's sales. One positive note for the industry is an impending new policy aimed at discouraging imports, which is due to come into effect early next year.