ARC Automotive Inc. of Knoxville, Tennessee is expanding capacity at its joint venture plant in Xi'an, Shaanxi.

 

In a company announcement, ARC Qinghua (Xi'an) Automotive Co. said it will increase airbag inflator production to 7 million units this year, up from 3 million units in 2008.

 

Henry Zhao, an executive at ARC QingHua, said his company has already added 4 new production lines this year at its factory, which now employs 340 people. "Each line has the capacity to make 1 million hybrid inflators annually. So we will reach 7 million capacity this year," he said.

 

A hybrid inflator combines a compressed, inert gas, with gas emitted by a "pyrotechnic" flammable propellant. An inflator accounts for up to 70 percent of the cost of an airbag system.

 

ARC Qinghua exports around 60 percent of its production to South Korea for Hyundai and Kia cars. The rest is sold in China.

 

ARC's main competitor in China is still Daicel Chemical Industries Ltd. The Japanese supplier makes inflators at a plant in Jiangsu province.

 

Last year Key Safety Systems Inc. began production of airbag inflators at a plant in Huzhou, 120 km from Shanghai. Zhao rejects the idea that the company is a competitive threat to ARC Qinghua. "They were very slow to start production here," he said.

 

Zhao said Chinese makers of airbags could only compete with ARC when selling to carmakers who emphasized price over quality.