Running lights

	Model CLD-L1401 from Changzhou CLD is an H4 bulb with 18 SMD LEDs. Its service life is 20,000 hours.

Foreign-invested and state-owned enterprises benefit from long-term partnerships with top-tier carmakers.

OEM-oriented production and exports in China’s automotive bulbs industry is still confined to a small portion of the supplier base as challenges hamper expansion, particularly that of locally owned manufacturers.

The sector is dominated by foreign-invested and state-owned enterprises, most of which run large operations. These companies have long-term contracts with major domestic and international car assemblers, giving them easy access to specifications of new and upcoming vehicles.

This in turn enhances makers’ capability to design automotive bulbs in-house based solely on vehicle parameters.

FIEs and SOEs also benefit from proprietary technology, which is provided at regular intervals by their partners.

In contrast, local suppliers take up to three years to develop similar lighting devices or methods, by which time newer and more advanced technologies would have emerged.

Given this, most China-owned companies at present use technologies adopted from top-tier foreign corporations such as Philips, Osram and GE in their products. Another factor hindering OEM expansion is the substantial investment needed in meeting stringent client- and segment-specific requirements, an example of which is ISO/TS 16949.

First published in 1999 and revised in 2002, the standard aligns and supersedes various international quality system guidelines, including QS-9000, VDA 6.1, EAQD94 and AVSQ95.

Spanning the design, development, manufacture, installation and service of automotive products, ISO/TS 16949 represents the current minimum requirements set by many top car assemblers for their OEM suppliers. Compliance and certification takes at least two years and an investment of about $7 million.

Factory upgrades can reach $30 million, most of which will go to the purchase of advanced equipment such as high-performance SMT machines that cost more than $300,000 per unit.

Currently, only large and some midsize companies carry out surface mounting in-house.

In addition to SMT equipment, interviewed supplier CNLight Co. Ltd procured a $1.9 million glovebox from Germany for its HID bulb production line.

The oxygen level inside the glovebox is below 0.1ppm and all key processes are performed in a high pure-argon gas environment.

	Haining First produces a 3,200-lumen HID bulb that features a UV-cut quartz glass tube from GE.

Relatively low labor, land, power and production costs are the key factors that spurred foreign makers to establish facilities in China.

Hella KgaA Hueck & Co. of Germany, for example, has eight facilities in the country. Japan’s Koito Group, meanwhile, partnered with the Shanghai Automotive Industry Corp. (Group) to form Shanghai Koito Automotive Lamp Co. Ltd, an OEM supplier of Volkswagen, GM, Toyota and Nissan.

Together with SOEs and a few private companies, these large corporations number about 25 and represent 5 percent of the supplier base. They can turn out more than 1 million units every year.

Large companies usually allot $1 million for R&D annually.

Design work is done in-house using CAD, CAM, CAE, Pro/E, CAXA, Moldflow and ASAP software.

Between 30 and 35 percent of makers are midsize. They are capable of producing 500,000 to 1 million units in a year. Midsize and large companies usually import key components. Glass tubes are sourced from GE of the US and molybdenum fi laments from Austria’s Plansee SE.

Other sources include US-based International Rectifier for MOSFETs, Germany’s Siemens for discharge tubes and capacitors, and Rubycon of Japan for electrolytic capacitors.

Operations at approximately 60 percent of production facilities, on the other hand, are small, with annual capacity reaching no more than 500,000 bulbs. These companies generally subcontract surface mounting and procure components domestically.

In all, about 70 percent of automotive bulb makers in China offer halogen and other types of filament lamps. The rest manufacture HID and LED bulbs.

	Haining Xinguangyang offers a 55W HID xenon bulb that works within a temperature range of -40 to 105 C.

About 80 percent of automotive bulbs from China are halogen versions with single or dual filaments. This category consists of the H1, H3, H4, H7, H13 and 900 series rated from 55 to 130W. Products are generally priced at $0.70 and below, inclusive of the shield that filters UV light.

Lasting less than 300 hours, low-end automotive halogen bulbs are about $0.35 per unit.

Models have bases made of nickel-plated iron, and shields in stainless steel.

Together with the filaments and glass for the envelope, these components are mostly sourced from Zhejiang and Jiangsu provinces.

In contrast, the various parts used in upscale models are procured from foreign-invested enterprises in mainland China or purchased directly from overseas suppliers.

Halogen bulbs that exceed $0.60, for example, have glass tubes from Schott AG of Germany and filaments from Taiwan, South Korea or Japan.

Similar to halogen lamps, automotive HID bulbs from China come in the H and 900 series.

Products are rated from 21 to 550W and priced between $10 and $25.

Low-end models have a service life of less than 2,000 hours while midrange products last 2,000 to 3,000 hours. High-end versions can be used for more than 3,000 hours.

HID lamps are offered as stand-alone products, although they are generally bundled together with ballasts to form sets suitable for headlight mounting.

Accounting for 60 to 70 percent of exports in the line, HID conversion kits are priced higher than individual bulbs.

Quotes range from $30 to $120, with ballasts representing up to one-third of unit cost and lamps as much as 50 percent.

Most models between $30 and $80 use HID bulbs sourced from top-tier domestic suppliers. Procured from Jiangsu and Zhejiang, bases are fitted with industrial-grade ICs from the US, Japan and the EU. Versions that fall below this price range are also available.

These products have not been certified compliant with international or China standards.

Kits with Osram, Philips or GE bulbs are at the other end of the price spectrum. Usually exceeding $80, they bear DOT approval and the E-mark.

Now a popular option particularly for brake and other types of auxiliary lights, LED bulbs have lower energy requirements and last longer than other types of automotive lamps.

These, however, are about 40 percent more expensive than halogen lamps, limiting usage to upscale lighting assemblies.

Further, there have been no significant developments toward the use of diodes in forward illumination. This is because LED bulbs at present cannot approximate the level of brightness emitted by traditional light sources unless they are formed into clusters. Used in headlights, diodes could cause heat dissipation problems due to the limited space for the bulb clusters and other electrical and mechanical components.

LEDs for auxiliary lighting come mostly in red, blue, white, yellow or green, with efficiency ratings reaching 60 to 80 lm/W. The maximum service life is 50,000 hours. Models rated at 0.1 to 3W are priced $0.05 and below if equipped with domestic chips, while versions fitted with Taiwan-sourced variations of the component are between $0.05 and $0.10.

High-end LED bulbs have US and Japan chips and go from $0.10 to $0.25.

Automotive bulb production in China is primarily export-oriented, with about 70 percent of output sent abroad.

Approximately three-quarters of shipments are HID lamps and conversion kits, export figures for which, when combined with halogen and other filament bulbs, indicate a continuous upturn.

From Q1 to Q3 of 2008, value and volume exceeded $144 million and 13 million units, respectively. This represents an emphatic increase of 45 and 29 percent year-on-year, surpassing the annual average growth rate of 12 and 8 percent the industry has been posting since 2006.

Exports of LED bulbs, meanwhile, are not tracked independently by customs. Industry sources, however, estimate that exports in 2008 totaled $115 million based on 35 percent growth every year.

Asia is the primary market for China-made automotive bulbs, accounting for as much as 40 percent of shipments.

In fact, Japan is the second-largest, single-country importer of filament bulbs after Germany. Between January and September 2008, the country absorbed $10.5 million worth of products.

Despite the financial crisis, the EU remains a major export destination, specifically for aftermarket parts. This is primarily because of the Block Exemption Regulation 1400/2002/EU, which is designed to promote competition in vehicle sales and the provision of aftersales services and parts.

The regulation allows authorized dealers and repair service centers of vehicle makers in the EU to procure spare parts and components of equal or superior quality from independent or non-OEM suppliers.

Guangdong province and the Yangtze River Delta region, where most car assemblers are located, are the key production hubs for automotive bulbs in China.

Approximately 25 percent of makers are based in Guangdong, which is also the largest exporter of the line.

According to customs statistics for HID, halogen and other filament-type bulbs, the province sent $55.8 million worth of products abroad from January to September 2008, or 38 percent of China’s shipments.

Most products from Guangdong target the upscale market.

Jiangsu and Zhejiang provinces have a near-equal number of suppliers that represent almost three-quarters of the manufacturing base when combined. Offering mostly low-end and midrange models, these companies exported more than 845 million bulbs with a value of $57.4 million in the same nine-month period.