In spite of the tough times facing some of Detroit's auto suppliers, the Motor City is drawing a new challenger from the other side of the globe. A Chinese injection molder has just launched an office in the area and is trying to make inroads to the North American market.
Shanghai-based Elk Automotive Components has opened an office in Plymouth, Mich., that sells and engineers injection and insert molded parts, plastic and rubber extrusions, rubber molded components, small stampings and sewn leather assemblies.
The office is managed by Elk's American partner, e-Merging Market Technologies LLC of Plymouth, a consultancy that opened about eight months ago. President Orest Iwasiuk said the primary products are injection molded gearshift knobs.
With manufacturing sites in Shanghai, Chongqing and Shenzhen, China, Elk makes plastic knobs from nylon and polyurethane. The product line also includes urethane-based knobs with a thin, overmolded plastic coating, and plastic-based knobs wrapped with leather.
``The primary focus of Elk is on leather wrapping over injection molded components,'' Iwasiuk said in a March 24 phone interview. ``Years ago, Elk used to sew leather for the garment industry.'' The Elk name is in the process of being registered in Shanghai. It is a consolidation of several facilities, the core being the former Gaoqi Shanghai Automotive Components Co. Ltd.
Privately held Elk employs 700 in China. It has been supplying Shanghai Automotive Industry Corp. Group and its 50-50 joint venture with General Motors Corp., Shanghai General Motors Co. Ltd.
Iwasiuk was formerly president of Teleflex Automotive, a division of Philadelphia-based Teleflex Inc. Teleflex Automotive makes complete gearshift systems, including knobs, and has manufacturing sites in Shanghai, Chongqing and Shenyang, China.
Iwasiuk said he developed some ``low-cost business models'' while he worked for Teleflex in China. At present, Elk can make products that are 30-40 percent less expensive than their counterparts from operations in Europe and North America, he claimed.
``The goal is to introduce nontraditional suppliers to the traditional North America markets.'' The consultancy said it can help break down the language, cultural and market barriers. It is in charge of sales, marketing, and custom-engineering with potential customers. It also maintains Elk's global Web site, which is in English, and is working to create a ``Western appearance'' for the company.
With half a dozen engineers on staff in Plymouth, Iwasiuk is trying to obtain business from large, Tier 1 suppliers.
Elk's major customer, GM, is turning a profit in China despite struggling in its home markets. For 2005, GM reported preliminary profit of $327 million from China.
Elk spokesman Simon Deng also said in a release: ``The expanding automotive industry in China, along with the opportunity to provide our low-cost, high-quality components into the North American market, made our decision to open an office there very easy.''
The consultancy also is helping small companies in South Korea and Eastern Europe enter the U.S. market, and Iwasiuk said he is looking to open an office in Europe.