WANXIANG Group, owned by billionaire Lu Guanqiu, led a 4.5 percent rise in sales for China's auto component makers last year, as the country's rising vehicle production drove up demand.

Total sales for the country's 4,447 auto-part makers rose to 345 billion yuan (US$43 billion) last year, while exports climbed 52 percent to US$8.53 billion, the China Association of Automobile Manufacturers and the National Bureau of Statistics said in a statement yesterday.

Chinese auto-part makers are benefiting from the country's growing vehicle production rates and from government rules designed to boost the use of locally made parts. Overseas suppliers are also investing in the country because of low wages, which are helping to boost export sales.

Wanxiang, based in the eastern city of Hangzhou, was the country's largest auto-part maker last year with sales climbing 21 percent to 25 billion yuan, according to the statement.

The closely held company, which supplies customers such as Ford Motor Co and Delphi Corp, the largest US auto-part maker, employs 40,000 people in China, Germany, the UK and the US. Wanxiang wants to quadruple its sales by 2010 and has expressed interest in buying assets from bankrupt Delphi.

More than 90 overseas auto-part makers agreed to set up components plants in China last year, with contracted foreign investment climbing more than fourfold to US$4 billion, the association said.

China, the world's fourth-largest vehicle maker, has supported the development of its auto-part industry by levying tariffs on imports. These are set to fall to 10 percent on July 1 from as high as 16.4 percent in line with World Trade Organization agreements.

The country also uses different tariff levels to encourage the use of locally made parts. If a vehicle is made of less than 40 percent imported parts then the parts face a maximum duty of 14 percent.