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With the increasing demand for quality in the Chinese automotive market, suppliers of plastic parts in the automotive supply chain have also begun to increase investment.
Take the example of French Foglia, the world's sixth-ranked automotive supplier. In the company's global sales of 17.4 billion euros last year, China's sales accounted for less than 10%. However, its sales growth in China is faster than the market level, with an increase of 25% last year. The company expects its sales in China will double in the short term, from 1.5 billion euros in 2012 to 3.3 billion euros in 2016.
At the Shanghai Auto Show held in April, Faurecia announced the formation of a joint venture with Changan Automobile Group, China’s fourth-largest automaker. The French company put into operation four new plants in 2012 and will also build new automotive interior production plants in Shenzhen and Hangzhou.
The chairman and CEO of Foggia Yann Delabriere said: "China has grown into the world's largest automotive market with a solid growth prospect."
This also means that the demand for plastics equipment will remain strong, especially with the world's advanced technology, which will bring cost-effective equipment to the local market.
“From a technical point of view, the Chinese market is no different from other markets,†said Johanes Roters, vice president of the Automotive Experience’s subsidiary, Johnson Controls USA, and general manager of China, Johannes Roters. The multinational OEMs in China present the same to suppliers. The standard."
The European plastic fuel tank manufacturer Ingrid Automotive Systems Co., Ltd. has also increased investment in recent years. The company built its first plastic fuel tank plant in China in 2007 and completed its second plant in 2011. This year, it will build the third and fourth plants.
The company will begin construction of the fifth factory in Ningbo, Zhejiang next year, introducing the company's new double-blow molding technology into China for the first time.
Gerald Hedttedt, executive vice president of enterprise sales at Ingrid, mentioned that Ningbo will use double-plate technology to produce fuel tanks and supply it to a general-purpose joint-venture vehicle scheduled to be sold in China in 2015. He said: "We will use the same fuel tank design as the United States to transfer the same technology to China."
He said that the market share of plastic fuel tanks in the Chinese market is expected to rise rapidly, from about 50% now to 70% in 2020. In the United States and Western Europe, more than 90% of cars use plastic fuel tanks.
Infineon's parent company, Plastic Omnium, plans to build a total of seven new plants in China in the next two years. There are currently 13 factories.
Last year, PlasticOmnium sales in China reached 475 million euros, accounting for about 10% of the global sales of 4.8 billion euros.
China is an important part of the development plan for PlasticOmnium. The company launched 98 new automotive projects worldwide last year, 30 of which are in China.
This strongly suggests that the company’s sales in China will continue to rise. The company is currently China's largest car bumper manufacturer and second-ranked plastic fuel tank manufacturer.
He said: "This is the result of our long-term efforts in this market."
For many international suppliers operating in China, the growth in demand mainly comes from multinational car companies such as Ford and Toyota Motor, as well as joint ventures, rather than domestic self-owned brand car manufacturers.
Of course, all suppliers have expressed great interest in cooperating with local automakers, such as Geely and BYD Auto, and they have already begun to undertake projects of these companies.
However, from a practical point of view, the main factor driving the growth of sales of multinational auto parts suppliers in China is multinational auto manufacturers in China.
Ingrid's Behnstedt said: "Chinese OEMs do not replace steel fuel tanks with plastic fuel tanks. We are mainly cooperating with [multinational automotive manufacturer] joint ventures and their factories in China are developing very fast."
Similarly, only about 10% of Faurecia's business in China last year came from domestic automakers.
In the medium to long term, this proportion is expected to rise to 20%, but it is unlikely to exceed the proportion of multinational brands. Folgari spokesman Olivier LeFriec said in an interview with this magazine at the Shanghai Auto Show.
He said: "We will double the volume of business with local brands, but the market and our sales will still dominate the multinational manufacturers' joint ventures in China."
According to the figures of Faurecia, although the Chinese local auto brands have received a certain degree of attention, they are lagging behind in the implementation and level of interest in the latest technologies in the global supply chain.
As far as Faurecia is concerned, in 2012, Chinese automakers accounted for only 1% of its total global sales.
However, local automakers are very eager to improve, in order to improve their competitiveness and better respond to the increasing quality requirements of domestic auto consumer groups, said Rotters of Johnson Controls.
He said: "The local OEMs have already understood... To be eliminated from the market and maintain growth, we must work hard on quality. In the interior, we can support them here. Not only is Johnson Controls, but also includes Other multinational automotive suppliers."
Moreover, multinational suppliers should pay attention to all Chinese auto brands because in the highly competitive Chinese market environment, it is difficult to predict which automaker will eventually become the leader, headquartered in Trivonia, Livonia, Michigan, USA. Company spokesman Lynette Jackson said in an interview with Plastics News China at the Shanghai auto show.
She said: "Given the tremendous growth potential of this market, no one wants to miss out on any customer."