By Lauren Hilgers, Plastics News Correspondent
Shanghai, China -- As office staff works quietly above their heads, the four technical experts of KraussMaffei AG's new Shanghai technical centre are hard at work turning out a set of prototype dashboards - working out the kinks in preparation for mass production in China.
While the Munich, Germany-based company's China manufacturing plant is located a short distance outside of Shanghai in Jiaxing, the tech centre location in Shanghai is the heart of KraussMaffei's evolving China strategy. The centre, which is used both for product development and operations, reflects an increasing focus on China's domestic market, offering customers design and development services previously not available within China.
"China is an engine of growth," said Harald Schweitzer, the head of KraussMaffei's China operation. "Companies need to adapt as China's market changes."
While KraussMaffei's European business has suffered during the financial crisis, the company's China business has stayed steady, buoyed in particularly by growth in China's domestic auto market.
"There are two centres of gravity in China," Schweitzer said. "You have the electronics market in the south and the automotive market, which is based around Shanghai and in the north."
Until this year, KraussMaffei based its Shanghai operations out of Waigaoqiao, a free-trade zone set up to attract foreign companies. "In former times that was the only place to set up a foreign trading operation," explained Schweitzer. While inside the zone, companies were relatively free to do what they wanted, Schweitzer said. But goods coming in and out had to be registered and taxed.
Now, Shanghai offers foreign-owned companies more freedom and KraussMaffei saw advantages to a location closer to the heart of the city.
"For the tech centre, we have a lot of machines and goods coming in and out," Schweitzer said. "The free trade zone wasn't the appropriate place."
In its first project, technicians at the centre are designing prototype tools for automotive applications.
Locating the centre in Shanghai helps customers cut down development time and reduce costs, said Mark Niemeyer, head of special engineering at the Shanghai centre. In the past, companies have spent time and money sending prototypes and products back and forth from China and the West.
"The major advantage is that we are much closer and faster," Niemeyer said. "More and more of our customers are demanding it."