Overview of China’s Marine parts Manufacturin：What you need know
Current situation: Boat manufacturing industry is developing rapidly, but the development of marine parts market has lagged behind.
China yacht-making business has seen continual growth in the past 40 year. Since 2013, China has become the sixth largest producer of yachts in the world. At the same time, the marine parts market has grown but remains fragmented, disorganized, and relatively small in scale. The localization rate of marine parts in China reached a high of 70% in the late 1980s and then began to decline, reaching a minimum of less than 30%.
Reasons for this kind of situation lie in many aspects:
- The govenment greatly concern about Shipbuilding development but neglect the spare parts manufacturing development;
- Lack of technology and R&D (research and development) capabilities.
- China's local makers of marine parts are mainly engaged in the production of labor-intensive products required only low technologies. Most of them only remain to be copycats of foreign products.
- Most companies have weak management abilities due to the lack of experience and talents.
For lack of a complete local supply system, China's boat manufacturers relied heavily on foreign suppliers in the high-tech parts at one time.
The situation has been improved in recently years. Both the OE market and aftermarket of marine parts are believed to have the greatest potential for growth. More and more chiniese factories have emerged to make the competition. A complete and powerfule marine parts industry chain is forming. The marine parts supply market of China is expected to become the world's manufacturing base because of its low labor costs (Just like what happened in the auto parts market). The ratio of marine parts export has risen year after year.
Graph 1: The evolution of marine parts annual value distribution
The geographical distribution of Chinese marine parts manufacturer is basically the same as that of large shipbuilding bases.
Marine parts industrial agglomeration has been taking shape in Yangtze Delta, Pearl River Delta, the Bohai Rim, and Chongqing Hubei area.
Graph 2: Marine parts industrial agglomeration in China
Jiangsu Province has the largest number of shipbuilding industrial zones (8, far more than other regions); Zhejiang Province has 3 shipbuilding industrial zones; Shanghai（where WOMARINE office is located） and Liaoning Province have 2 each; Shandong Province, Jiangxi Province, Guizhou and Fujian Province have 1 each.
By virtue of location advantage, different regions gain competitive advantage in different product categories:
| Industrial Center (Key Cities) | Main Products |
| Dalian, Qingdao, Shanghai | Low speed diesel engines, Outboard Motors, Hardware parts,Gaskets, Propellers, Valves, Marine electrical and automation system |
| Xian, Luoyang | High and medium speed diesel engines, Marine generators |
| Nanjing | Marine machineries, Accessories, Plastic parts, Tools, Submarines and accessories |
| Wuhan | Deck, Marine crankshafts, Casting, Tubes |
| Chongqing | Connecting rods, Gears, Marine Dashboard, Ignitions, Engine parts, Cylinder Heads and Blocks |
More and more marine parts makers begin to boost their investment in technical R&D.
The number of China's technical talents is increasing and marine R&D system is also improving. These developments have brought new opportunities and dynamism to marine parts sector. The government also issue some policy to support the development and application of new technologies.
A sharp evidence is that patent applications for marine parts in China are increasing year by year. Take the patent applications of boat parts as an example:
In order to find the required patent information, each patent will be assigned to the international patent number (IPC). We studied 471 of the 484 marine parts patents from 2005 to 2014, and found that most of them are related to marine engines.
The practice of global sourcing has a long history in other sectors like auto-parts industry. Now marine parts industry also shows such a trend. Global sourcing has been a hot topic in recent years and is the most important reason why we remain optimistic about China's marine parts exports.
Although China's marine parts factories has been developing rapidly these years, few of them have the capacity to do the global business.
This situation is mainly created by the following factors:
- Marine parts sourcing is highly demanding in design, quality, craftsmanship and language communication, and few local suppliers in China can meet these requirements.
- Some high-quality suppliers traditionally focus on the local OE market. They don’t even have a foreign trade salesperson.
- The manufacturers lack variety in their product line (most of them only specialize in one or two product category). Factories still take orders in the old-fashioned way, which means high MOQ, mold fee in advance, no stock, long product development and slow update.
With years of rapid growth, WOMARINE have the capabilities and experience to explore the global market. We seek to become a global supplier of marine parts. With profound understanding of the essences of the quality control, supply-chain management and export of marine parts, we are making efforts to this end.
Specifically speaking, WOMARINE do something like these:
- WOMARINE have already created a relatively mature R&D system. We have patent rights to our core products(like Outboard Carburetor, Gaskets, Fuel Pump, etc..), and keep innovating in relevant technologies and series products.
- Diversification of the products. It is an inexorable trend for a diffuse supply market to become more concentrated. Through cooperation with upstream and downstream suppliers, WOMARINE have rich line-ups of product now.
- To improve the quality control and the cost control by boosting the integration of logistics.
