China’s Cars Aren’t in the U.S., but Its Auto Parts Are Everywhere
Chinese companies have amassed ownership stakes in about 10,000 auto suppliers in America
- Chinese-owned suppliers are deeply integrated into the U.S. auto parts supply chain.
- Lawmakers revived the idea of eliminating Chinese parts in U.S. cars in a bill that would ban China-made cars and safety components.
- Some carmakers including Tesla and GM are reducing reliance on China-made components for U.S. production.
Chinese cars aren’t on American roads, but Chinese auto parts are embedded in American cars.
More than 60 auto suppliers in the U.S. today are owned by companies located in China, according to data compiled by the consulting firm AlixPartners. Those include large manufacturers of air bags, automotive glass, and steering systems. Overall, Chinese companies have amassed ownership stakes in about 10,000 suppliers in America, according to the data, including stakes as small as 5%.
“They’re deeply integrated into the industry,” said Michael Dunne, chief executive officer of the automotive-consulting firm Dunne Insights, which focuses on China.
While American lawmakers, politicians and carmakers have emphasized the economic and national-security risks of Chinese companies that enter the U.S. market, some of those concerns have already manifested themselves in China’s grip on the supply chain. Last year a political dispute tied to a Chinese-owned chip maker threatened to disrupt production for global automakers.
Lawmakers recently revived the idea of eliminating Chinese parts in U.S. cars in a Senate bill that would ban China-made cars and safety components, such as air bags and seat belts.
In late April, more than 50 House Republicans, led by Rep. Mike Kelly (R., Pa.), wrote to Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. They urged the Trump administration to block Chinese automotive and battery companies from manufacturing in the U.S. Their letter warned that Chinese investment in the American auto-supply chain poses risk to domestic industries.
Some car companies have been taking steps to bring some component production home. Tesla started requiring its suppliers to exclude China-made components in the manufacturing of its cars in the U.S., The Wall Street Journal reported last year. General Motors CEO Mary Barra has said the automaker has reduced its direct spending on materials in China for U.S.-made cars to less than 3% as part of a strategy to buy parts where it is building vehicles.
The U.S. has been looking at China’s presence in the domestic auto-supply chain for years. An International Trade Commission study in 2019 found that Chinese production of automotive parts had grown significantly over the preceding decade, with U.S. imports concentrated in smaller components such as brake rotors.
Several automakers have endorsed the recently proposed legislation to prohibit Chinese cars. But at least 40 vehicle models on sale today were assembled with a reportable amount of Chinese components, according to data that car companies submit to the National Highway Traffic Safety Administration.
Ford Motor’s latest Mustang GT uses six-speed manual transmissions from China. About 15% of parts in Toyota Motor’s latest Prius plug-in hybrid come from China, according to the data. GM reported that Chevrolet’s Trax sport-utility vehicle, along with the all-electric Blazer and Equinox SUVs, contain roughly 20% of parts from China, the data showed.
Ford said it looks forward to working with lawmakers on the proposed Chinese-car ban. GM, which said it endorsed the Senate bill, declined to comment further. A Toyota spokesman declined to comment.
Across the world, Chinese ownership of some of the biggest suppliers in the industry has steadily increased. In 2012, one Chinese company ranked among the top 100 global suppliers, according to data from AlixPartners-owned Berylls, which bases rankings on automotive revenue. In 2024, that number had jumped to 13 suppliers, and it is expected to reach 22 by the end of the decade.
“This shows the incredible speed in which the competitive environment has changed,” said Juergen Simon, a partner at AlixPartners.
In the U.S., carmakers have become closely tied to the work of Chinese-owned suppliers. Fuyao, a glass supplier, supplies Detroit’s three and other domestic auto manufacturers. Another company, CATL, is the world’s largest electric-vehicle battery manufacturer. Nexteer, a publicly traded global manufacturer of steering systems and drivelines, is controlled by a Chinese conglomerate and makes parts for top carmakers in the U.S. and China.
“Fuyao Glass America is a U.S.-based enterprise committed to localized manufacturing operations and the creation of local employment opportunities,” the company said, adding that it has strong relationships with major U.S. automakers. “Our localized supply and service network enables us to respond efficiently and promptly to our customers’ production needs.”
While Chinese suppliers used to be avoided because of concern about quality and performance, that is no longer the case, Simon said.
Simon has been advising a large supplier on business strategy for five years. When he started, he said the Chinese were only viewed as potential upstarts to competition, but things have changed.
“Now, they tell me whenever they lose, it is against a Chinese supplier,” he said.