Johnson Controls Inc., a global automotive interior manufacturer, is forming a joint venture in the southern Chinese city of Changsha to supply interiors for an assembly plant being built there by Guangzhou Automobile Group Co. Ltd. and Turin, Italy-based Fiat Group Automobiles SpA.
The large JCI facility will include injection molding machines with clamping forces of 800-3,200 metric tons.
The new site will manufacture the interiors for vehicles produced by the new GAC-Fiat joint venture, according to John Moulton, group vice president and general manager in China for the Johnson Controls Automotive Experience unit.
We basically have the entire interior, the [instrument panel], door panels, floor console, overhead console ... the key interior components, Moulton said in an April 22 interview at Auto Shanghai 2011. And we have the seating as well.
Glendale, Wis.-based JCI planned a groundbreaking ceremony for last week.
Moulton said the investment will be sizable, not only for the facility but for training a workforce in Changsha.
There are not a lot of experienced automotive people in that area, he said. We're going to have to hire the people and do a lot of training to build up the workforce there.
The JCI plant will employ 700. The GAC-Fiat auto assembly plant in Changsha is expected to start operating in mid-2012.
Moulton declined to describe the equity terms of the JCI joint venture but said the company's 24 other joint venture factories in China are generally roughly a 50 percent split between JCI and its local partner.
The Changsha investment is an outgrowth of Johnson Controls' 2008 joint venture with GAC, in which JCI produces automotive interior components in Guangzhou for GAC's self-branded cars, which launched in 2010, according to Moulton.
JCI is constructing a new facility in Guangzhou to house that operation, he said. It started production in 2010 in rented facilities.
Moulton said the company established operations in Guangzhou because it wanted a base to handle the increased automotive investment in South China, particularly in the area around Guangzhou.
You are seeing more and more OEMs moving to the south and the Guangzhou area, Moulton said. Currently the Japanese are there Nissan, Honda and Toyota.
The whole southern part of China is a huge growth area, he said. If you want to be a leading player in the south part of China, you really have to make a factory there.
He said JCI currently has another joint venture in Guangzhou with Nissan to make seating, and hopes to leverage its work with GAC to secure interiors contracts with the Japanese auto companies there, all of which have joint ventures with the Guangzhou car manufacturer.
As well, automaker FAW-Volkswagen said last year it planned to start an auto assembly plant in Foshan, next to Guangzhou, by 2013, and Chinese carmaker BYD Inc., which is minority-owned by American investor Warren Buffett, is nearby in Shenzhen.