Japanese suppliers strengthen China business
Although hard hit by slumping sales at home and in North America, Japanese suppliers remain profitable in China and are looking to expand their operations here.
"The China market is very good. As the small car business is becoming big, our business in China is very good. But looking at our export market—that is not good," says Yoshinori Haraguchi, president of Mitsubishi Heavy Industries Automotive Climate Control Systems Shanghai.
The company supplies compressors and fans for automotive heating, ventilation and cooling systems. A new smaller compressor which is approximately 30 percent lighter and smaller than current models will soon be introduced into China. The product is made for small cars.
In China, the company currently supplies Mitsubishi and Suzuki cars. Along with other Japanese suppliers, it is looking for opportunities with local domestic automakers and American automakers present in China.
"We are thinking about expanding our business in China," says Haraguchi. "First we have to find new customers. From next year I am thinking to push for Chinese and American automakers. I think we can do it. We have already introduced our new product in Japan and North America—we will bring it to China in the future."
Other Japanese supplier companies have similar plans to Mitsubishi.
In a statement NSK Ltd. says one of its main aims is to "develop new markets in China to encompass local companies in northeast and inland China, in addition to Japanese-affiliated companies that have established operations in coastal China."
On October 14, the Japanese automotive bearing supplier opened a new research and development center in Kunshan in east China. This is the largest NSK r&d center globally. Covering 30,000 square meters, the 4.4 billion yen (329 million yuan) facility will ramp up to employ 300 staff by 2011.
Separately NSK has also announced plans to build a new facility in Shenyang in northeast China. Production at a 20 million dollar (137 million yuan) plant there is scheduled to begin in April 2010.
Transmission manufacturer JATCO, meanwhile, launched full-scale production at its first plant in China in September this year. The new plant is JATCO's second overseas production base after Mexico. The new 4 billion yen (299 million yuan) JATCO Guangzhou Automatic Transmission plant manufactures belt CVTs for 2.0-2.5 liter vehicles and has an annual capacity to produce 140,000 units. The continuous variable transmissions will be used by Nissan vehicles in China.
