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Follow the customers means westward ho!
By Richard Fu |
June 21, 2012, Thursday
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Print Edition
Print Edition
MANN+HUMMEL, a Germany-based filtration specialist, built its China headquarters in 2010 in Jiading, a satellite town that's grown to be a hub of Shanghai's auto industry.
On the opposite of the road sits an assembly plant of Volkswagen, its key customer.
The proximity is another example of global auto parts makers wanting to get as close as possible to their customers. Since Volkswagen set up the first Sino-foreign car joint venture in Shanghai in the 1980s, thanks to the opening-up policies of late leader Deng Xiaoping, clusters of parts makers have followed.
Now, they are on the move again, tagging after major carmakers as they venture into China's underdeveloped western regions. The westward thrust comes amid market saturation in eastern coastal cities and government sweeteners to coax industries to move inland.
Volkswagen announced in April it will build a new car plant in Urumqi, the capital of the northwestern Xinjiang Uygur Autonomous Region. The factory will be built in conjunction with its partner, Shanghai Automotive Industry Corp (SAIC), and will have an initial production capacity of 50,000 units a year when the plant starts up in late 2014.
Europe's largest carmaker called the new investment "part of its go-west strategy."
"We are planning western plants to get closer to customers," said Patrick Cudmore, group vice president and chief executive for the Asia Pacific at MANN+HUMMEL, speaking from the company's Jiading facility.
He said the company may discuss with Volkswagen and SAIC the feasibility of building a parts manufacturing site near the Urumqi car plant, though there is no detailed proposal at present.
Increased sales
MANN+HUMMEL increased sales in China by 20 percent in 2011. Last month, it opened a new production site in the city of Liuzhou in the southwestern region of Guangxi. The facility, its fourth in China, will mainly supply air cleaners, intake manifolds and engine cam covers to the carmaking venture operated there by SAIC, General Motors and Wuling Automobile.
SAIC-GM-Wuling Automobile, a leading manufacturer in China's mini-van market, is turning its business focus to the passenger car segment.
French car parts maker Faurecia, the world's biggest emissions-control technology supplier, holds a similar strategy for location.
"Yes we're going west and we are following our customers," said Jean-Michel Vallin, president of Faurecia China Holding. "We first came to China following our global original equipment manufacturing customers."
Faurecia wants to expand into a major supplier in the China market and double its sales in 2015 from 1.2 billion euros (US$1.52 billion) in 2011, Vallin said during the China Auto Parts and Service Show 2012 in Shanghai last week. The trade fair attracted about 30,000 professional visitors, according to organizers.
Just this month, Faurecia opened a plant for interior systems in Chongqing as part of a joint venture with a local domestic auto-parts supplier. The new factory will mainly supply parts to a plant there operated by Ford Motor Co and China's Chang'an Automobile Group.
On the opposite of the road sits an assembly plant of Volkswagen, its key customer.
The proximity is another example of global auto parts makers wanting to get as close as possible to their customers. Since Volkswagen set up the first Sino-foreign car joint venture in Shanghai in the 1980s, thanks to the opening-up policies of late leader Deng Xiaoping, clusters of parts makers have followed.
Now, they are on the move again, tagging after major carmakers as they venture into China's underdeveloped western regions. The westward thrust comes amid market saturation in eastern coastal cities and government sweeteners to coax industries to move inland.
Volkswagen announced in April it will build a new car plant in Urumqi, the capital of the northwestern Xinjiang Uygur Autonomous Region. The factory will be built in conjunction with its partner, Shanghai Automotive Industry Corp (SAIC), and will have an initial production capacity of 50,000 units a year when the plant starts up in late 2014.
Europe's largest carmaker called the new investment "part of its go-west strategy."
"We are planning western plants to get closer to customers," said Patrick Cudmore, group vice president and chief executive for the Asia Pacific at MANN+HUMMEL, speaking from the company's Jiading facility.
He said the company may discuss with Volkswagen and SAIC the feasibility of building a parts manufacturing site near the Urumqi car plant, though there is no detailed proposal at present.
Increased sales
MANN+HUMMEL increased sales in China by 20 percent in 2011. Last month, it opened a new production site in the city of Liuzhou in the southwestern region of Guangxi. The facility, its fourth in China, will mainly supply air cleaners, intake manifolds and engine cam covers to the carmaking venture operated there by SAIC, General Motors and Wuling Automobile.
SAIC-GM-Wuling Automobile, a leading manufacturer in China's mini-van market, is turning its business focus to the passenger car segment.
French car parts maker Faurecia, the world's biggest emissions-control technology supplier, holds a similar strategy for location.
"Yes we're going west and we are following our customers," said Jean-Michel Vallin, president of Faurecia China Holding. "We first came to China following our global original equipment manufacturing customers."
Faurecia wants to expand into a major supplier in the China market and double its sales in 2015 from 1.2 billion euros (US$1.52 billion) in 2011, Vallin said during the China Auto Parts and Service Show 2012 in Shanghai last week. The trade fair attracted about 30,000 professional visitors, according to organizers.
Just this month, Faurecia opened a plant for interior systems in Chongqing as part of a joint venture with a local domestic auto-parts supplier. The new factory will mainly supply parts to a plant there operated by Ford Motor Co and China's Chang'an Automobile Group.
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