By ZHANG Mingrui

The changing landscape of the vehicle market in Shanghai, particularly in Jiading District, is having far-reaching effects on companies up and down the local automotive supply chain.

Shanghai is not only home to major plants owned by SAIC but is famously the global center of Tesla production. Over 3 million vehicles produced in 2022, representing about a fifth of the city’s industrial output value. This industry is supported by a well-established supply chain network.

Suburban Jiading has emerged as a focal location for supply chain enterprises. More than 4,300 related companies operate there, from large manufacturers to micro-component factories.

However, the shifting dynamics of the vehicle market have posed challenges for Jiading as small and medium-sized enterprises struggle with declining orders, falling profits and price pressure from vehicle manufacturers.

Traditional component enterprises, reliant on internal combustion vehicles, face the necessity for rapid transformation and upgrades.

This has led to suspensions of production, layoffs and reduced wages. Small suppliers simply lack the technology to meet the demands of manufacturers. Naturally, some enterprises are looking overseas while Jiading is driving emerging sectors like intelligent connected vehicles and autonomous driving.