Issue: Jun 2007


Comtech Set to Capitalize on Rise of Chinese Auto Industry with Delivery of Cutting Edge Auto Entert



by Alan Tran

Comtech a leading provider of customized design solutions for the technology manufacturing sector in China, is aiming to take advantage of the growth of the Chinese automotive industry by beginning shipments of auto entertainment technology solutions to a number of leading automotive manufacturers during the second half of 2007.

Comtech supplies design solutions to enable the installation of cutting edge MP3/iPod music systems in new and existing vehicles. With rising demand among consumers for the latest auto entertainment technology, both pre-built in new car models and for the replacement of outdated sound systems in older cars, Comtech is capitalizing on a trend driven by increasing auto sales, domestically and internationally.

Jeffrey Kang, President & Chief Executive Officer, Comtech Group, Inc., said, "The auto industry has become one of our key markets. We aim to grasp this opportunity to grow our business by working with domestic and global auto makers in China. We can help them equip cars across all ranges with the entertainment devices that drivers are looking for nowadays."

"The advent of MP3/iPod music systems has revolutionized the digital entertainment sector. Consumers are replacing CD players with MP3/iPod systems now just as they replaced cassette tape systems decades ago. With these new systems becoming dominant among consumers the world over, it's natural that drivers are now looking for this kind of technology to be installed in their cars, and Comtech is well placed to support this trend," said Mr. Kang.

Comtech already provides a considerable range of electronic technologies, including module and sub-system solutions for handsets and digital media products. The company has built on its experience in these areas and is now set to adapt and develop solutions to support automotive products such as rear view cameras and monitors, auto navigators, auto display systems and GPRS systems.

Over 7 million new vehicles were sold in China last year, while there are more than 30 million cars and light trucks on the road, all with older entertainment systems that may be in line for replacement (1). With the averages sales price of a new MP3/iPod stereo system at an affordable USD 25-50, demand for more modern auto entertainment systems looks set to rise.

"In China, there are only about 6 car owners per 100 people, compared with 90 per cent car ownership in the U.S. and 80 per cent in the U.K. As car sales continue to rise, we feel that Comtech -- with our proven expertise in providing customized design solutions to the manufacturing sector -- is well positioned to benefit from this upward trend," said Mr. Kang.

"The export market for auto electronics modules and components also represents a notable opportunity for Comtech. With its affordable development costs and readily available OEM/ODM facilities, China is set to become the world's manufactory center for auto electronics industry," he said.

"The scale of the auto market, in terms of sales of electronics systems pre-built in new models and the replacement of outdated systems in existing cars, will surely help Comtech to boost sustainable revenues and profitability over the coming year and beyond," he added.

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