According to Research and Markets, China's exports of automotive lights are growing at the rate of about 30% annually. Overseas shipments are expected to reach US$300 million in 2006, as demand from Asia, Europe and North America increases steadily and more suppliers venture into the OEM segment.

China's exports of automotive lights are on the rise as demand from Asia, its largest market, continues to grow at double-digit levels. Overseas shipments to North America and Europe are also increasing, as policies such as the Block Exemption Regulation 1400/2002/EC of the EU expand the customer base for generic automotive parts.

In the first eight months of 2006, China exported more than US$190 million worth of products overseas, an increase of 28 percent from the same period in 2005. If the current growth rate is sustained, overseas shipments could reach US$300 million by the end of the year.

The growth is driven primarily by sales of vehicle lighting assemblies or equipment, which account for 60 percent of export value. The line currently has only a 10 percent share of volume, but is expected to take up a greater percentage in coming years.

The following are some of the other key trends we see in China's automotive lighting industry:

- Most suppliers will continue to export primarily to the aftermarket. Nevertheless, the number of makers expanding into the OEM/OES segment will grow as more companies upgrade their manufacturing systems to meet stringent requirements in this sector. Several of these makers will be obtaining ISO/TS 16949 certification in coming years

- Many suppliers will be raising prices in the next 12 months due to higher raw material costs. The intense competition will be limiting adjustments to the minimum, however, with most companies increasing quotes by 10 percent or less.

- Exports of HID and LED bulbs, and lighting assemblies using these units, are projected to remain on an uptrend as the decreasing cost of components make them more competitive against halogen models.

- More suppliers will obtain certificates of compliance with US and EU standards for their products, including RoHS, to take advantage of the expansion of the aftermarket segments in these areas.