Reasons of China becoming industry centre of aluminum wheel hub

    China has now become the world's automotive aluminum wheel manufacturing center and the current export market is mainly in the retail market. However, in recent years, many foreign auto makers have started to buy car wheel hubs directly from China. The reason lies in that in China, the cost of raw materials accounts for 55%to 60%of the cost of aluminum wheel hub while labor cost accounts for 4% to 5%. In foreign developed countries, raw materials cost about 50% but labor cost accounts for 15% to 20%. The large gap between labor cost is an important part of the domestic automobile aluminum wheel industry competitive advantage. Large international auto plants turn to China for hubs in order to control the cost. Or establish joint ventures in China. There are Japanese joint ventures in China.

    Another big advantage is that China is rich in resources. The alumina factory is numerous and the price competition is intense then. After breaking Chalco’s monopoly, privately-owned aluminum factories boomed. For aluminum wheel industry, the cost of raw materials is the most critical. Chinese manufacturers have an advantage in this regard.

    Third, since 2004, Chinese auto industry has developed rapidly. Until 2009, affected by economic crisis, Auto production and sales in various countries were shrinking year by year but they both exceeded 13 million in China, which made China the world's largest production and sales country. 2010 China's automotive industry development was more rapid, only the first three quarters of the production and sales exceeded 13 million, which was near the total of 2009. Experts predict that in 2010 China's annual automobile production and sales will be close to the highest level in the history of the automobile sales - 17 million. The rapid development of the auto industry will naturally motivate the development of aluminum wheel industry and then formed a close “if the lips are gone” relation.