VELBERT, GERMANY (July 8, 11:55 a.m. ET) — German automotive molder Huf Group has opened a new factory in Changchun to meet growing demand in northeast China, particularly for passive door entry systems that the company says are increasingly popular with Chinese drivers.
The 16,700-square-meter factory has injection molding and painting, as well as assembly for making keys, locking systems, door handles and steering columns, the Velbert, Germany-based company said in a July 7 news release.
“We are supplying with our products not only international car makers and joint ventures with production capacity in China but also Chinese car manufacturers,” said Huf Group CEO Ulrich Hülsbeck. “This year we received some very attractive orders.”
The facility, known as Changchun Huf Automotive Lock Co Ltd., is the company's fourth in China, and is designed to take pressure away from a molding, die-casting and painting facility in Yantai, Shandong province, which is at capacity and had been supplying northeast China, the company said.
The factory in Changchun, the capital of Jilin province, employs 45 now but that is expected to grow to 220 by the end of the year.
Huf said one of the customers will be the FAW Volkswagen Automotive Co. Ltd., a Changchun-based joint venture of China's First Auto Works, VW and Audi.
A large proportion of the company's business in China is with international joint venture operations, but the proportion with local Chinese car makers is growing, and those domestic manufacturers are increasingly interested in quality, said Ute Hoppe, Huf's director of corporate communications.
“We have learned that they are interested in quality products,” she said. “There is a change. It is no longer only price.”
The company is also investing in a new development center for electronics products at its Shanghai factory, for the passive entry systems and other products. All of the imported cars in China have those systems and it is expected that domestic models will increasingly want them, she said.
Huf said the new Changchun plant is part of an internationalization strategy, with some recent investments in other emerging markets.
The company opened a facility in Mexico last year, and is doubling the size of its Brazilian factory, as well as setting up production in India and Romania.
The company, with 20 factories and 5,600 employees around the world, said it is one of the leading suppliers of passive door entry systems worldwide. It has about 1,400 employees in China, about the same number as it has in Germany, Hoppe said.
Huf had worldwide sales of 847 million euros (7.8 billion Chinese yuan) in 2010.