ThyssenKrupp Zhong-Ren Chassis expands business
By Namrita Chow From:Automotive News ChinaMay 14, 2008
BEIJING -- ThyssenKrupp Zhong-Ren Chassis Co. is expanding production of steel chassis parts in China.
A new 30,000-square-meter plant in Wuhan, Hubei province, will begin production by the end of this year, says Jiang Yongwei, deputy general manager of ThyssenKrupp Zhong-Ren.
The new plant will focus on welding and assembly. The company's existing 32,000- square-meter plant in Wuhan will increase stamping capacity with four new 1,000-ton presses.
Wuhan is home to Dongfeng Peugeot Citroen Automobile Co., a major customer of ThyssenKrupp Zhong-Ren, accounting for 40 percent of its business.
ThyssenKrupp Zhong-Ren is also looking at building a new axle plant. The plant will primarily supply Ford Motor Co.'s ventures in China, India and other parts of Asia. Ford accounts for around 40 percent of ThyssenKrupp Zhong-Ren's business.
Sources in the industry say that new orders for steel chassis parts from Shanghai Volkswagen Automobile Co., for vehicles built on the PQ25 platform such as the Skoda Fabia and a new-generation Polo, will push ThyssenKrupp's current Wuhan facility to capacity.
A major challenge for ThyssenKrugg Zhong-Ren is rising steel prices.
Global customers often ask for prices 70 percent cheaper than European prices, Jiang says. However, the rising cost of labor and raw materials, plus the cost of maintaining equipment, pushes the price in China to about 20 percent below global prices.
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