Suppliers say local r&d is crucial in China
Foreign auto suppliers must invest rapidly in Chinese r&d facilities to tap a market that demands more high-tech features, executives say.
International suppliers have a technological edge over domestic Chinese competitors, but they must tailor their products to local needs, said Majdi Abulaban, president of Delphi Asia Pacific.
"In the last few years we're seeing a major shift," Abulaban said during the Automotive News China Conference here. "We need more locally developed components designed specifically in this market for this market."
Delphi, of suburban Detroit, arrived in China nearly two decades ago. The company maintains two technical centers in China with 1,300 engineers. Like other suppliers, Delphi has invested in computer-aided design, validation labs, wind tunnels, dynameters and engineers.
Delphi produces electronics, powertrain parts, thermal controls and other components.
Germany's Continental AG takes a similar approach toward localizing its research resources for the Chinese market. "Local r&d is the critical success factor," Continental China President Jay Kunkel told conference attendees.
"Competition is driven by technology," he said. Continental has 10 r&d sites in China. It produces a broad range of parts, including brakes, chassis systems, safety electronics and instruments.
With Chinese customers becoming more sophisticated in their tastes, demand is increasing for cars with high-tech features common in Europe or North America.
Furthermore, steady increases in Chinese labor costs are exceeding the pace of productivity gains from labor-intensive manufacturing processes, he said. This pressures suppliers and automakers alike to turn to more advanced automated techniques.
One limiting factor: It's hard to find top-notch engineers.
"Quantity is one thing, but skill sets is another," Kunkel said. "We need these skill sets in order to also further expand our technology footprint here in China."
That hasn't slowed hiring much.
Since 2010, Kunkel said, Continental has hired about 375 employees a month in China to meet surging demand in the world's biggest auto market.
"In the last few years we're seeing a major shift," Abulaban said during the Automotive News China Conference here. "We need more locally developed components designed specifically in this market for this market."
Delphi, of suburban Detroit, arrived in China nearly two decades ago. The company maintains two technical centers in China with 1,300 engineers. Like other suppliers, Delphi has invested in computer-aided design, validation labs, wind tunnels, dynameters and engineers.
Delphi produces electronics, powertrain parts, thermal controls and other components.
Germany's Continental AG takes a similar approach toward localizing its research resources for the Chinese market. "Local r&d is the critical success factor," Continental China President Jay Kunkel told conference attendees.
"Competition is driven by technology," he said. Continental has 10 r&d sites in China. It produces a broad range of parts, including brakes, chassis systems, safety electronics and instruments.
With Chinese customers becoming more sophisticated in their tastes, demand is increasing for cars with high-tech features common in Europe or North America.
Furthermore, steady increases in Chinese labor costs are exceeding the pace of productivity gains from labor-intensive manufacturing processes, he said. This pressures suppliers and automakers alike to turn to more advanced automated techniques.
One limiting factor: It's hard to find top-notch engineers.
"Quantity is one thing, but skill sets is another," Kunkel said. "We need these skill sets in order to also further expand our technology footprint here in China."
That hasn't slowed hiring much.
Since 2010, Kunkel said, Continental has hired about 375 employees a month in China to meet surging demand in the world's biggest auto market.
