Only in China does moderate growth require 6 or 7 new plants
|Richard Johnson is managing editor of Automotive News|
It's true. Growth in China has slowed considerably this year. Some forecasters expect no more than a 10 percent to 15 percent sales increase for 2011, which is downright puny compared with the two previous years.
But hold on a minute, a 10 percent spike in a market of 18 million vehicles? That means adding 1.8 million units this year, the equivalent of six or seven new assembly plants.
Slowdown or not, the fact is demand for vehicles is overwhelming everyone connected with China's car business. The talk is not just about building new plants, but about constructing them faster.
So far, carmakers are reluctant to speed the process too much.
"We want to build them faster," said Ford China Chairman Joe Hinrichs, who ran North American manufacturing before shifting to Asia 16 months ago. "But the timeline to build a plant is pretty well established."
Ford has two assembly plants under construction in China and will need a couple of years to complete them.
"We could use the capacity sooner, but we've got to do it right," Hinrichs said.
But some suppliers are moving heaven and earth to keep up with customer demand.
Take GKN Driveline, which has had a big presence in China for decades. The company just completed a new plant in Changchun in northeast China that will make 1 million CVJ sideshafts annually. The chief customer is First Automotive Works and its Western joint venture partners.
The plant went from a gleam in GKN's corporate eye to a functioning facility with a fully trained work force inside of a year.
To complete the same plant in Europe or the United States would take twice as long, said Marc Vuarchex, managing director of Asia Pacific for GKN Driveline.
The supplier broke ground in May 2010 and started production last month.
"In such a fast-growing environment this is the kind of thing we must do for our customers," Vuarchex said.
GKN just went at the job harder and faster. For one thing it meant working through the long, cold winter in Changchun, which, after all, is right next to Siberia.
GKN gave employees six months of training at its other facilities while the 156,000-square-foot plant was being constructed.
The 250 workers were ready to go flat out on day one.
Indeed, there's no wasted motion in China these days.