Automotive interior components maker Grammer AG of Amburg, Germany, inaugurated two plants in China at the end of May and plans a third facility in Shanghai next year.
Located in Tianjin and Changchun, China, the two facilities represent a total investment of 12 million euros ($15.3 million), said Stephen Viburg, general manager of both operations, in a telephone interview.
Viburg said Grammer recently signed a global contract to provide General Motors Corp. with interior components, primarily headrests and armrests.
``GM demands a local presence,'' Viburg said.
Volkswagen AG's joint venture with First Automotive Works Corp. in Changchun is another major customer in China. Grammer Interior (Changchun) Co. Ltd. produces armrests and headrests for Audi's A4 and A6 models and Volkswagen's Bora, Caddy and Golf models. The Changchun plant includes plastics welding, foaming and assembly capabilities.
Grammer Interior (Tianjin) Co. Ltd. was launched by adding the production of seats for industrial vehicles such as trains, buses, trucks and equipment to an existing facility, specializing in automotive parts for passenger vehicles. Previously, the seating unit was a joint venture in Xiamen.
Both the Tianjin and Changchun plants are wholly owned enterprises.
Viburg said the company is pleased that all its Chinese businesses are wholly owned now. Because of changes in ownership regulations in the automotive industry since 2001, many Tier 1 and Tier 2 suppliers have dissolved joint ventures in favor of wholly owned operations.
Viburg said sales for Grammer's Chinese operations in 2006 are expected to be 25 million euros ($31.9 million). Viburg said about 15 percent of Grammer's China production is exported to automakers in Japan and South Korea.