Current status and development trends of the automotive lighting supply chain in China

As a massive automotive consumer market, by the end of 2015, the number of vehicles in China reached 172 million—and continues to show a strong growth trend. It is expected that China’s demand for auto parts and its aftermarket service sector will surge significantly over the next few years, while the automotive lighting market also holds tremendous potential for expansion.

However, currently in China's automotive lighting supply chain—from components to modules and lamps—joint ventures and foreign-invested companies hold the majority of the market share, while local Chinese manufacturers still struggle to compete with them.

Local packaging companies have entered the automotive LED market but remain focused on upgrades.

On the device side, current suppliers are primarily international manufacturers such as Osram, Nichia, and Lumileds, and most headlamps in complete vehicles use their devices. Additionally, Everlight, Tongliang, and others are also actively expanding into the market, mainly capturing shares in the rear lighting segment.

Since OEM manufacturers typically impose stringent requirements on the quality of products, technologies, and supplier certifications for automotive lighting—and given that the core technology behind automotive lighting remains relatively closed—very few local Chinese device manufacturers have managed to enter the automotive supply chain. Major factories certainly can’t claim the same. However, leading Chinese packaging companies are also actively investing in the automotive lighting market through various strategies, striving gradually to break the monopolistic hold in this sector.

Anrui Optoelectronics is a joint venture established in 2010 by Sanan Optoelectronics and Chery Automobile. In July 2015, Anrui Optoelectronics signed a cooperation agreement with BAIC Yinxiang, a subsidiary of the BAIC Group, to produce automotive headlights and LED products tailored for BAIC Yinxiang’s vehicle applications—primarily including rear lights, signal lamps, interior lighting, and more. Anrui Optoelectronics holds a stake of at least 70% in the projects it undertakes. Additionally, Anrui’s clients also include Chery, Beiqi Foton, Zotye, and other major automakers. In 2014, Anrui Optoelectronics generated revenue of 80 million yuan.

In 2013, Hongli Optoelectronics entered the automotive LED market through its wholly-owned subsidiary, Foda Signal. Foda Signal’s core product line includes vehicle signal lights and headlights, some of which utilize Hongli LEDs. Currently, the company’s primary customers remain in the overseas aftermarket segment, and it has yet to establish a presence in automotive OEM supply chains.

Additionally, other Chinese device manufacturers, such as Ruifeng, are also gradually expanding their automotive LED product lines—but they still primarily focus on aftermarket services, and their market share remains relatively small. Breaking into the original equipment market will take time.

Manufacturers from mainland China and Taiwan share the market for automotive lamp modules.

On the Chinese market, only a handful of major local manufacturers produce modules. BYD has its own fully integrated production chain, which is why the lamp modules in its brand’s models are manufactured in-house. Additionally, Shanghai Chenlan Optoelectronics, a subsidiary of Shanghai Shenglan Industrial—where Feile Audio holds more than 90% of the shares—is also a relatively large local manufacturer of modules. In 2015, revenue from the automotive lighting business exceeded 600 million yuan.

Chenlan Optoelectronics, a subsidiary of Shenglan Industrial, was established in 2004. Today, all of its products are supplied directly to original automotive manufacturers and are compatible with major automakers such as Guangzhou Stanley, Changzhou Damao Werico, Shanghai Magna Donnelly, and Tianjin Stein. The company maintains close collaborations with partners like Lei, Wuhu AL, Changzhou Xingyu, Changchun Hella, Zhejiang Tianchong, Fuzhou Koito Dayi, and others. Its products are widely used in vehicles from brands including FAW-Volkswagen, Shanghai Volkswagen, FAW Audi, Shanghai GM, Guangzhou Honda, FAW Toyota, Changan Ford, Chery, FAW Car, Zhonghua, Great Wall, Jianghuai, and many others. The company’s core product line includes rear light modules, brake lights, fog lamps, turn signals, and interior lighting systems. Additionally, Chenlan Optoelectronics serves as an agent for the sale of Osram automotive lamps. In 2014, the company produced and sold over 80 million headlight kits.