In spite of slowdown in sales, parts makers still investing

China has also been the major investment destination for Italian automotive parts supplier Magneti Marelli SpA. Company CEO Eugenio Razelli declined to disclose figures about future investments. He did say that by 2015, sales revenue in China is projected to be double the 2012 total of 287 million euros.

"We even plan to further double the revenue to reach 1 billion euros ($1.29 billion) in 2017, at which time we also aim to double our production capacity," said Razelli. "This optimistic perspective comes from not only the increasing local production of vehicles but also the requirements for higher and new technologies, especially in lighting and telematics."

The company on May 16 opened a new lighting system factory in Foshan, Guangdong province, with an investment of 30 million euros ($38.7 million). With an annual capacity of 2.4 million rear lamps in the initial phase, the company's target is to achieve a 10 percent share of the local market.

'Major engine'

"It's clear that China has been the major engine driving our global business in the future," said Razelli.

German company Freudenberg Group is also increasing investment in its China businesses, expanding production capacity and sales channels.

Recently a new 36-million-yuan factory by the Freudenberg Group that produces automobile and industrial filters began operations in Chengdu. It is the group's third filter plant in China in addition to the ones in Suzhou, Jiangsu province and Changchun, Jilin province.

The joint venture between the group's subsidiary Vibracoustic and its partner Trelleborg plans to double production capacity in a plant in Yantai, Shandong province, that makes vibration-control system for vehicles.

According to the company, it invested a total of more than 2 billion yuan in China from 2004 to 2012. And in the first quarter, its sales on the Chinese mainland grew 13 percent compared to a year earlier.

Hanno Wentzler, the group's regional representative in Asia, said that the second quarter will be "comfortable", but the second half of the year might be "challenging" because the rising inventories of auto dealers is giving parts manufacturers cause for concern.

The bulk of Freudenberg's global sales are still large in Europe and North America, but the share in Asia increased to 17 percent last year, up from 12 percent in 2009. Automotive business now accounts for about half of the group's sales in China.

Having invested 250 million yuan over the past three years, German automotive technology provider Knorr-Bremse Commercial Vehicle Systems plans to pump more money into China in the coming years.

The influx of capital will be used for a new manufacturing base in the country's central region and also to build a 100-engineer R&D center in Shanghai this year.

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