As China’s automotive suppliers rush to meet the demands of the world’s fastest-growing automotive market, an overcapacity problem already may be brewing, according to a new study written by Economist Corporate Network and released by the Automotive Industry Action Group and IBM Business Consulting Services’ Institute for Business Value.

The quest to add manufacturing capacity is taking place at a faster rate than expected market growth, raising overcapacity concerns and the possibility of a shakeout within five years.

In pursuit of lean operations, automakers worldwide have focused on technology investment. The China Auto Suppliers Survey looked at how China’s automotive suppliers make use of process and production technology.

The study found that information technology spending by automotive suppliers in China was generally low, with more than three-quarters of respondents investing less than $100,000 per year. It also examined major concerns, including an overwhelming need to find and retain reliable staff, which was cited by survey respondents as a barrier to successful development. With regard to automated operations, less than a quarter of respondents use enterprise resource planning systems.

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