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March 04, 2016 01:00 AM

Cooper Standard doubles capacity in China

Chris Sweeney
Rubber && Plastics News
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    Cooper Standard Automotive Inc.
    Cooper Standard Automotive Inc. can now produce a full range of its products, using both plastics and rubber, in China.

    Cooper Standard Holdings Inc., parent company of Cooper Standard Automotive Inc., has opened two facilities in China, one in Huai'an and the other in Chongqing.

    The firm said in a Feb. 2 news release that its Chongqing facility officially opened on Feb. 1. It employs about 200 and is more than 193,000 square feet. Its facility in Huai'an is the first under its joint venture with Japan's Inoac Corp. — Cooper Standard Inoac Pte. Ltd. The operation spans about 50,000 square feet and eventually will employ about 300, Chief Operating Officer Keith Stephenson said.

    Cooper Standard did not disclose investment details. It now operates 10 manufacturing facilities in China and a technical center in Shanghai, supporting all four of its core product lines — rubber and plastic sealing, fuel and brake lines, fluid transfer hoses and anti-vibration systems — with more than 5,200 employees.

    “Basically in the last 24 months we've doubled our capacity in the Chinese market,” Stephenson said. “We've also now expanded to be able to support all four of our product lines. Previously we did not make FTS [fluid transfer system] products, or hose products, in China. We now do through the joint venture with Inoac, and we're expanding our capacity in our fuel and brake business as well. We have plans for continued investment in the marketplace as well.”

    Stephenson stressed that this additional capacity has been added to serve the local Chinese market, not to be exported back to the U.S. “This is about supporting what has now become the largest car market in the world,” the executive said 

    Hose presence established

    The firm's Chongqing facility will manufacture fluid transfer systems, fuel and brake delivery systems, and sealing systems for automakers such as Ford Motor Co., Mercedes-Benz and Volvo Car Group.

    Cooper Standard's joint venture with Japan's Inoac Corp. opened its Huai'an facility dedicated to producing fluid transfer systems products. Stephenson said the plant establishes a manufacturing hub for low pressure premium hose lines for cooling and heating applications to help the firm earn a leading position in the Chinese and Asian markets. Prior to this venture, Cooper Standard did not have manufacturing for its fluid transfer systems product lines in the region.

    The firms established Cooper Standard Inoac in 2014, with Cooper Standard owning 51 percent and Inoac 49 percent. The venture was designed to strengthen Cooper Standard's presence in the region, pool technological resources with Inoac and combine its connections with western-based OEMs with Inoac's relationships with the Japanese auto makers.

    Key products for the new joint venture are expected to include low pressure, premium hose and transmission oil cooler lines for radiator, emissions, vacuum brakes, turbo chargers, heater, air conditioning and power steering applications, Cooper Standard said.

    “This is the first of what we hope will be several facilities throughout Asia for our hose products,” Stephenson said. “They have great technology and relationships with the Japanese OEMs. We saw this as marrying our strengths together starting with this facility and hopefully expanding this through Asia over time.”

    Committed to China

    The Novi, Mich.-based automotive supplier has been busy in the Asia-Pacific region, with a focus on China. It established a technical center in Shanghai in 2014, including a test center for fluid transfer systems products; acquired majority ownership of its joint venture with China-based Huayu Automotive Systems Co. Ltd.; expanded the operational scale of fluid transfer and fuel and brake delivery product lines in eastern China; and opened a new sealing facility in northeast China.

    “We view the China market as we view the North American market or the European market,” Stephenson said. “We think the main players in that market are going to have global expectations. As you think about global platforms or global OEMs, their expectations are the technology you're offering in other parts of the world is the same technology you're providing in China. In some cases now they're even establishing their home rooms for development in that market. We don't think about China being an emerging market—we think it's there. And we think OEMs are going to have the same expectations for China as they do in the U.S. and Europe.”

    Cooper Standard forecasts between 25 million and 26 million cars in China for 2016, an increase of about 1 million.

    “The first quarter looks pretty solid in terms of releases from the OEM customers,” Stephenson said. “Obviously we're a little concerned that things could slow down a little bit in the second half, but we still see China as a solid growth market. As is our responsibility, we have contingency plans that if the car volumes fell, we could flex our cost structure. Those we have ready not just in China but around the world, but we're optimistic that China is going to grow again in 2016.”

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