By Steve Toloken, Plastics News
Shanghai, China - China's macro economy may be showing signs of softness, but global automotive plastic component makers at the Auto Shanghai fair had few, if any, plans to hit the brakes with their investments.
Auto interiors suppliers like Johnson Controls Inc. from the US and Faurecia SA from France are investing heavily, with Faurecia announcing a 293 million Chinese yuan ($47.4 million) joint venture with China's Chang'an Automobile Group to build two new factories for instrument panels, door panels and other components for the local market.
Away from those Tier 1s and further down the supply chain, smaller companies also are reporting investment plans.
Even with a slowdown from China's previous breakneck pace, the companies said their new factories reflect that China's market continues to grow and that Chinese vehicles, both from international car makers and local brands, are getting more sophisticated and increasingly use the same technology as in mature markets.
"We have over 10 factories in preparation for the near future in China, because of the growth," said Johannes Roters, group vice president and China general manager for JCI's Automotive Experience Group. "China is now the biggest automotive market, around 20 million cars, and the growth rate we expect in the next years is between 6-8 percent."
"The market is more mature now and the growth is no more double digit…. but 6-8 percent is still a big number in comparison to other regions," he said.
Faurecia predicted its sales in China would double to €3.3 billion ($4.3 billion) a year, from €1.5 billion last year. Sales in the country rose 25 percent in 2012, outpacing the market, and the company opened four additional factories there.
The full version of this article appears on our sister publication, Plastics News.