North American Auto R&D Center to Set Up in China - aftermarketNews

North American Auto R&D Center to Set Up in China

North American market leader in automotive quality inspection, the PSA Group of Companies, has signed an agreement with two local firms to set up a research center in this southern boomtown. The Canadian firm's major business in China is currently in sourcing auto parts for its North American and Japanese clients, including General Motors, Ford, DaimlerChrysler and Yazaki.

From China Daily

SHENZHEN, China — North American market leader in automotive quality inspection, the PSA Group of Companies, has signed an agreement with two local firms to set up a research center in this southern boomtown.

The Canadian firm’s major business in China is currently in sourcing auto parts for its North American and Japanese clients, including General Motors, Ford, DaimlerChrysler and Yazaki.

But it hopes that the deal, with Shenzhen Paicheng Aluminium Technological Co and the Shenzhen Longgang Baoyuan Industrial Co, will lay the foundations for a rapid expansion of the PSA’s business in China by tapping into the nation’s flourishing auto parts market.

PSA Group COO Gary Small said that the company had already “sourced about $60 to 80 million (USD) worth auto parts last year from China since we set up our China office last June in Shenzhen.” Small told China Daily that the figure is “expected to increase dramatically because a growing number of transnational auto manufacturers and parts suppliers have eyed the Chinese market for its low labor costs, abundant labor resources and huge market potential.”

Although neither of PSA’s two Chinese partners have any experience in auto parts research or production, Small said that PSA “cherished their extensive social relations, strong research team, quality management and close academic relations with Shanghai Jiao Tong University, a national leading engineer university.

Shenzhen Paicheng Aluminum Technological Co is a privately-funded high-tech company engaged in the research and production of aluminum alloy materials. It has a total asset of $25.3 million (USD) and annual sales of around $60.4 million (USD).

For his part, Shenzhen Longgang Baoyuan Industrial Co General Manager Li Jun said he was “optimistic” about the prospects for the nation’s auto parts market.

Li added that co-operation with PSA would benefit his firm by “giving us an access to the most modern technology and quality standards accepted by auto manufacturers and suppliers in North America.”

A site is currently being sought for both the research center and a manufacturing plant, said Li, adding that it would be possible for a fourth company to join the venture at a later date.

Small revealed that PSA also plans to move three other major businesses to China in the near future, its auto technology engineering consultation, quality inspection and refurbishment and auto industry logistics service.

But Jason Han, who has the responsibility for developing the group’s business in the China market, said that at the current stage, it would take time to educate the local manufacturers to become qualified manufacturers.

More Chinese people are now finding that buying a car is within their means, with the fierce competition raging in the auto making industry dragging down the prices to more affordable levels, which is also driving forward the auto parts manufacturing industry.

China’s auto production capability increased 30 percent year-on-year in the first four months of 2004, a just slightly less than the 35 percent growth for the full year of 2003 when compared with 2002, but still very strong growth, said Zhang Xiaoyu, vice-chairman of China Machinery Industry Federation.

Auto demand is estimated to increase to between 8 and 10 million units by 2010 and 14 to 18 million units by 2020, he added.

Shenzhen is next door to the Hong Kong Special Administrative Region and adjacent to Guangzhou, where three Japanese auto giants have located their manufacturing plants.

The city has drawn up a host of policy incentives to encourage the autos part manufacturing industry’s development and attract increased numbers of foreign investors.

“By taking advantage of its booming high-tech industry, Shenzhen could mainly develop electronic auto parts by introducing technologies and establishing research centers,” Zhang suggested.

Copyright China Daily via ProQuest Information and Learning Company; All Rights Reserved.

_______________________________________

Click here to view the rest of today’s headlines.

You May Also Like

Continental, Synopsys Team Up on Automotive Software Development

The collaboration aims to accelerate the development and validation of software features and applications for the Software-Defined Vehicle.

Continental announced a collaboration with Synopsys to accelerate the development and validation of software features and applications for the Software-Defined Vehicle (SDV).

"This new collaboration integrates Synopsys’ industry-leading virtual prototyping solutions for virtual Electronic Control Units (vECU) within Continental’s Automotive Edge (CAEdge) cloud-based development framework. The results are digital twin capabilities for software development that help automakers accelerate software development and speed up their time to market," Continental said.

Epicor Unveils Digital Cataloging, Future Plans

The new catalogs use Epicor-validated, ACES-compliant data and an “Intelligent Search” feature to find the right part quickly.

Epicor digital catalog
Epicor Launches Automotive B2B eCommerce Platform

The Epicor Commerce for Automotive platform features multi-seller support and parts lookups for distributors and their customers.

Epicor commerce for Automotive
Marelli Launches Fuel System for Hydrogen Propulsion Systems

Marelli will present a variety of new technology at the CTI Symposium in Germany, Dec. 5-6.

The Automotive Aftermarket’s Role in a Circular Economy 

Take a deep dive into the factors driving the automotive aftermarket toward a more circular economy.

Circular economy

Other Posts

AI in the Aftermarket: Endless Applications Yet Hurdles Remain

The automotive aftermarket is delving into AI and ways it can help businesses be more productive and effective.

Intellias to Showcase HMI, ADAS and More at CES 2024

The company also will unveil the next generation of its IntelliKit, a portable fully-integrated digital cockpit.

Anyline Partners with Treads to Simplify Car Ownership

Anyline has partnered with Treads, an AI-driven car management subscription service, to enhance analytics for car owners.

Anyline Trends partnership
Unifying Your Parts Technology to Eliminate Channel Conflict

Harmonizing various channels in your eCommerce strategy through unified technology helps build an agile business model.

ecommerce channel conflict auto parts suppliers