PARIS -- China's suppliers will need up to eight years to bridge the quality gap with their Western counterparts, US consultant Mercer says.
In a study released in Paris, Mercer said fears that China will swamp the world with auto parts are unfounded.
Key components such as powertrains or bodies are up to 50 percent more expensive than in Europe, the US or Japan. On average, parts made in China cost 18 percent more to produce than in developed countries, says Mercer.
Components made in China are expensive because of its limited economy-of- scale savings, poor logistics and expensive raw materials. The high cost of hiring Western experts is also a factor.
China's cheap labor costs -- wages are up to 40 percent lower than in the West -- cannot compensate for these higher costs.
"It may take China up until the end of the decade to be able to export cars that are competitive," said Paul Clifford, Mercer's managing director for China.
Mercer warns that new entrants in the China market should leave the cheap end of the market -- cars costing 40,000-60,000 yuan (E4,000-E5,800) -- to local manufacturers, who can produce them more cheaply, often receiving government subsidies.