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Back Plastic News Industry Talk Global auto components firms step up China investments

Global auto components firms step up China investments

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While China's macro economy may be showing signs of softness, global automotive plastic component makers at the recent Auto Shanghai trade fair had few, if any, plans to hit the brakes with their investments.

French plastic fuel tank maker Inergy Automotive Systems, for example, said it was building two tank blow moulding plants in China this year, and planned another in 2014 to bring its advanced twin-sheet blow moulding process to the country to tap increased local demand for plastic fuel tanks.

Auto interior suppliers such as US firm Johnson Controls and Faurecia SA from France also are investing heavily, with Faurecia announcing a CNY293m (£31m) joint venture with China's Chang'an Automobile Group to build two new factories for instrument panels, door panels and other components for the local market.

Away from those Tier 1s and further down the supply chain, smaller companies also are reporting investment plans.

Even with a slowdown from China's previous breakneck pace, the companies said their new factories reflect that China's market continues to grow and that Chinese vehicles, both from international car makers and local brands, are getting more sophisticated and increasingly use the same technology as in mature markets.

"We have over 10 factories in preparation for the near future in China, because of the growth," said Johannes Roters, group vice president and China general manager for JCI's Automotive Experience Group.

"China is now the biggest automotive market, around 20 million cars, and the growth rate we expect in the next years is between 6-8%."

"The market is more mature now and the growth is no more double digit…. but 6-8% is still a big number in comparison to other regions," he said.

Chinese cars are using more plastics-related technology, according to Inergy, a unit of French supplier Plastic Omnium, which set up its first fuel tank blow moulding plant in China in 2007, in Wuhan, and a second in 2011, near Beijing.

This year it will build its third and fourth, in Guangzhou and Shenyang, and follow that up with a fifth, in Ningbo, next year. Ningbo will begin with traditional plastic tanks for China's Geely Automotive and then in 2015 add the twin-sheet technology for a GM joint venture car.

Around half of China's cars use plastic fuel tanks, compared with more than 90% in the US and Western Europe, observers noted, with estimates that China could see 70% of its cars using plastic tanks by 2020.

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