German automotive molder Huf Group has opened a new factory in northeast China to meet growing auto demand there, particularly for passive door-entry systems that the company says are increasingly popular with Chinese drivers.
The 180,000-square-foot factory in Changchun does injection molding and painting, as well as assembly for making keys, locking systems, door handles and steering columns, said Velbert, Germany-based Huf, in a July 7 news release.
“We are supplying with our products not only international carmakers and joint ventures with production capacity in China, but also Chinese car manufacturers,” said Huf CEO Ulrich Hülsbeck. “This year we received some very attractive orders.”
The operation, known as Changchun Huf Automotive Lock Co. Ltd., is the company's fourth in China. The factory is designed to take pressure away from a molding, die-casting and painting facility in Yantai, which is at capacity and had been supplying northeast China, according to the company.
The factory in Changchun employs 45 now, but that workforce is expected to grow to 220 people by the end of the year.
Huf said one of the customers will be FAW Volkswagen Automotive Co. Ltd., a Changchun-based joint venture of China's First Auto Works Group Corp., Volkswagen AG and Audi AG.
A large proportion of the company's business in China is with international joint-venture operations; however, the proportion with local Chinese carmakers 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 also is 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, according to Hoppe.
Huf said the new Changchun plant is part of a globalization 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.
With 20 factories and 5,600 employees around the world, the firm said it is one of the leading suppliers of passive door-entry systems worldwide. It employs about 1,400 in China, about the same number of employees it has in Germany, Hoppe said.
Huf had worldwide sales of 847 million euros (US$1.12 billion) in 2010.