CHINA: Johnson Controls to increase auto battery production

By Graeme Roberts | 20 October 2015

Johnson Controls plans to increase the production of automobile batteries used in start-stop systems in China. Currently, only 5% of vehicles sold in the country have such systems but the supplier expects this to rise to 40% by 2020 due to stricter fuel-efficiency standards.

The Chinese government has set a target of 2020 for automakers to reduce average vehicle fuel consumption from the current 6.9l/100km to 5l/100km, Bloomberg reported.

Johnson Controls' vice president of aftermarket and power products Ray Shemanski said: "It is a very simple first step that you could benefit from in terms of fuel economy and CO2 emissions."

Shemanski expects battery demand to rise in China as by 2020 around 67% of the vehicles on road in the country would have been in use for over four years.

According to Steve Man, a Hong Kong-based analyst with Bloomberg Intelligence, global automakers are incorporating more start-stop systems to meet increasingly stringent carbon emission and fuel efficiency standards worldwide, including in China. The number of vehicles sold with such systems may double by 2020 to as many as half of the passenger cars sold globally, he said.

Johnson Controls' "move into China makes perfect sense," said Man. "Not only that it's the largest auto market in the world, but the start-stop system is more applicable in China's stop and go traffic."

The company has about 300 wholesale distributors in about 150 Chinese cities. Johnson Controls will expand its sales network to cover all cities in the country over the next five years, Shemanski said.