Paris-based Inergy Automotive Systems is taking its second step into the China market with its first manufacturing facility in Wuhan. The plant will open in July to produce plastic fuel systems.
Inergy, a joint venture between Cie. Plastic Omnium of France and Solvay SA of Belgium, previously planned a joint venture with top domestic plastic fuel systems manufacturer Yangzhou Yapp Auto Plastics Parts Co. Ltd. That deal fell through in early 2006, and Inergy made the decision to open a wholly owned facility.
``In terms of getting to the market and getting big market share rapidly, [a wholly owned company] is maybe a drawback, but it will make sure that we can control quality and implement all the solutions we want,'' Claude Clement, vice president and general manager of Asia operations for Inergy, said during a news conference at Shanghai Auto Show 2007 in April.
The facility will supply Dongfeng Motor Corp.'s joint ventures with Nissan Motor Corp. and Honda Motor Corp. of Japan, and Peugeot-Citroen of France.
Capacity at the 57,000-square-foot facility is expected to reach around 400,000 parts a year. Production at the Wuhan plant is slated to begin in June 2008, and Inergy already has plans for more facilities by March 2009.
Clement would not specify where the second facility will be, but said it will support a major automotive manufacturer in China. Former partner Yapp has 10 facilities all over China and is planning to expand to India this year.
But Clement said his company plans to garner market share through its newer technologies. Inergy has experience in designing and producing fuel systems for partial zero emissions vehicles for the U.S. market and meeting EU4 and EU5 emissions standards in Europe.
Similar regulations are pending in China. The government plans to make Beijing follow EU4 emission standards by 2008 and the rest of the country will follow in stages.
Plastic fuel systems are made by coextruding and blow molding of high density polyethylene and creating a multilayer barrier with the use of ethylene vinyl alcohol.
At the news conference, Clements said Inergy's future facilities in China are likely to be wholly owned enterprises. Inergy shareholder Cie. Plastic Omnium of Paris recently received approval to begin a joint venture with Yangfeng Visteon to produce exterior parts. Clements said his company sought out the best domestic fuel system manufacturer in Yapp, and other domestic partners in China were limited because of the companies' quality and production capability.
Inergy produced 12.8 million fuel systems in 24 plants worldwide in 2006. The company posted sales of 1.2 billion euros (US$1.6 billion) last year.