Automotive components maker Valeo is celebrating 10 years of activity in China this year and plans the introduction of new product lines, the opening of a technology centre in Wuhan, the launch of its ‘5 Axes School’ and the development of the aftermarket.
At the Auto China Show in Beijing the company is unveiling automotive technologies which it claims will improve safety, fuel consumption and comfort for Chinese motorists.
Valeo has grown rapidly in China since it entered the market. Through its eight production facilities, sales in the region have grown by around 30% annually and are expected to almost double in the next two years to reach up to €600 million.
The company claims to be the uncontested leader in China for electrical systems and wiper systems and is also strongly present in the lighting systems, climate control and clutches markets. The group plans to rapidly introduce all its product lines in the country.
Chairman and chief executive officer Thierry Morin said: “The Chinese market represents a key area in the future growth of Valeo. The opportunities are enormous, and we are establishing technical centres and the 5 Axes School to ensure that we can serve our customers with the same quality and technology as in other regions.”
The group’s first technical centre in China opens later this year and will develop advanced automotive lighting systems for both Chinese and European car makers. Initially the centre will focus on projects for the local market, but it is anticipated that it will rapidly start working with other technical centres around the world on joint projects for all markets.
To further enhance the competitiveness of its Chinese facilities, a special so-called 5 Axes School, specifically designed to train all Chinese employees of Valeo in the ‘Total Quality’ culture and methodology of the group, is scheduled to open in September following intensive training of the five instructors who have been selected from the group’s Chinese operations.
The aftermarket opportunities are also seen as huge – the group expects that, by 2010, China’s passenger vehicle parc should reach 20 million vehicles. Valeo has a threefold aftermarket strategy – to sell locally produced products in the Chinese aftermarket, to distribute aftermarket products for imported vehicles and to manufacture specific products in China for the aftermarket. This year a marketing office has been established and a distribution network for alternators is already well developed.
Valeo’s Asia purchasing office, opened in Shanghai in 2001, expects to triple its sourcing from the current €300 million to €1 billion in three years. The office has already demonstrated its ability to locate qualified suppliers and train them where necessary to meet global standards in cost-competitiveness, quality, productivity, service, innovation and technology. The purchasing office is a key resource for all Valeo branches throughout the world and contributes to the group’s objective to source 70% of its purchases in low cost countries by 2010.
Valeo started in China in 1994 with the opening of its Beijing head office and the creation of joint ventures for wiper and climate control systems. Other joint ventures followed rapidly to bring the total to eight joint ventures. Product lines manufactured are lighting systems, starters and alternators, wiper systems, security systems, heating, ventilation and air conditioning systems, motors and actuators and clutches.
The group employs almost 3,000 people in China and serves all major passenger car and truck OEMs in the market.