LEDs lighting the way for the road ahead

Rising sales of traditional automobiles and new energy vehicles have fueled business opportunities for the LED lighting industry in China.

Light emitting diodes, or LEDs, are essential for the auto sector, and can be used to form the numbers on digital clocks and gauges to interior lights, headlights and even traffic lights.

APT Electronics Co Ltd specializes in LED production and has made research and development into automobile lighting a key priority next year.

"Automobile lighting is expected to become a major source of growth for us," said Hou Yu, deputy general manager of the Guangzhou-based company in Guangdong province.

"We plan to build an automobile light manufacturing base in the East China region," Hou added without giving further details.

APT Electronics' core business has tended to revolve around television backlights, and indoor and outdoor lighting.

But the company believes they have spotted an opening for a domestic player in a highly competitive automobile sector.

Although its market share is small in the auto industry, APT Electronics is convinced they can continue to grow in the years ahead.

"Right now, foreign manufacturers from Japan, France and Italy occupy the majority of the market," Hou said. "It is a huge sector for Chinese players to tap into.

"In future, Chinese manufacturers will be as competitive as their foreign counterparts, just like the TV sector, where you no longer have to buy foreign brands," Hou added.

While the traditional automobile sector continues to see robust growth, the future lies in the development of smart cars and new energy vehicles.

Hou stressed that NEVs require a higher standard of LED lighting because of energy consumption.

Still, automobile sales in China amounted to more than 28 million units last year, an increase of 13.7 percent compared with 2015, according to the China Association of Automobile Manufacturers.

NEV sales reached 490,000 units from January to October, a rise of 45.4 percent compared with a year earlier. In October alone, 91,000 units were sold, a jump of 106.7 percent year-on-year.

Naturally, APT Electronics is not the only domestic company muscling into the sector.

Hongli Zhihui, another Guangzhou-based LED company, acquired a 56 percent stake in automobile lighting firm Yishan Chedeng in September.

"Development of new energy vehicles in the country has placed higher requirements on energy consumption for automobile lights," Li Guoping, chairman of Hongli Zhihui, told Securities Times.

"Energy-intensive xenon lamps cannot meet the new requirements and will be gradually be replaced by LED lights," he added.