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The supply of cold rolled sheet steel for automobile manufacture in China has moved away from relying on imports to domestic supplies with market share rising to around 70 percent, Xinhua News Agency reported on November 20.

A stable 50 percent of the market share goes to China's largest steel maker, Baosteel Group Corp. About 10 percent plus is taken by other steel giants like Anshan Iron and Steel Group Corp and Wuhan Iron and Steel Group Corp.

The import of automobile steel sheet has been reduced by around 30 percent. "Of this 30 percent most imports are conducted by joint-venture auto manufacturers due to strategic consideration of decentralizing procurement and those imports that cannot be replaced by domestic provision is very rare," said Wang Ning, a domestic automobile steel sheet manufacturing expert.

China's auto manufacture has been one of the fastest developing industries in recent years. The industry achieved a 15 percent annual growth rate over the past ten years. This is 10 fold that of the annual growth rate of the world car industry in the same period.

The ability to provide automobile steel sheet is increasing to keep pace with the fast development of the auto industry. When China's annual car production hit 3 million, the sales volume of Baosteel-produced steel sheet reached 1 million tons for the first time. The latter figure reached 2 million while China's annual output of cars hit 5 million.

China's auto industry is one of the most complex markets in the country with various types of manufacture and brand names from Europe, Japan and the US. Sources with the technical department of Baosteel told Xinhua the company should be capable of providing comprehensive full-scale auto steel sheets to retain its high market share.

Baosteel has realized production upon client's request, with such markings like "Provided Exclusively for Shanghai Volkswagen" and "Provided Exclusively for Shanghai General Motors."

China's steel industry is gradually becoming capable of providing steel sheet for whole-car manufacture of major domestic sedan models. Baosteel has completed major standard quality management system accreditations in auto industry. Beijing Benz-Daimler Chrysler Automotive Co Ltd signed a mold testing materials supply contract with Baosteel to use its high strength Zinc coated steel sheet to conduct tests for new Chrysler 300C car.

Auto makers Shanghai Volkswagen, Shanghai GM and Faw-Volkswagen have said the rapid increase of home produced steel sheet purchase was due to quality and good after-sales service. Reaction times to customer requests were sharper and this also helped reduce costs significantly.

Sources from the procurement department of Shanghai GM said the cost of purchasing steel from home producers was 20 percent less than imports. Sixty-eight percent of steel used by Shanghai GM last year came from Baosteel and this is predicted to rise to 75 percent.

Baosteel now provides steel sheet for whole-car manufacture of 'hot-sale' cars like Audi A6, Passat, Chevlant "new Sail" and Ford Fiesta. Some have said one of every two home produced cars on the road "wears a coat" produced by Baosteel.

Market Share of Home Produced Sheet to Rise

'Made-in-China' steel sheet for automobiles was also exported to other countries. Baosteel-produced sheets have been exported to world famous car makers like Fiat and Ford. World-class Maserati is also using their product. Shanghai GM has an intention agreement with Baosteel to provide Hot-Dip Galvanized and Electro-galvanized auto steel sheets for its North America headquarters.

Statistics show the market size of China's auto steel sheet industry will be over 8 million tons by 2010. In the coming few years, China's auto market is predicted to grow by 15 percent annually. Except Baosteel, the Anshan Iron and Steel Group Corp, the Shougang Group and the Wuhan Iron and Steel Group Corp have made auto steel sheet their principal product. Experts have predicted that the market share of domestic steel industry in auto steel sheet markets will be further increased and the product structure optimized.

Auto sheet expert Wang Ning suggests a number of key areas for China's steel sheet makers: the sedan, zincing and high strength steel sheet for body-side use. They required to work in great detail, they should place key emphasis on the sedan's body-side sheets and develop a high-class product -- galvanized sheet was an example.

(China.org.cn by Zhang Yunxing November 30, 2006)