SUZHOU, China -- Siegel-Robert Automotive Inc.'s first manufacturing plant outside the United States is just a month old, but the plastics supplier already has plans to expand.
Siegel-Robert Automotive, of Farmington Hills, Mich., makes chrome-plated and decorated plastic components for the local market and export at the plant in the east China city of Suzhou. The plant opened in September.
The plant will be fully operational in January. By mid-2006, phase-two construction will begin to double its size. Siegel-Robert Automotive expects the total investment will be between $30 million and $40 million.
"We are seeing more competition from China and Korea," said Siegel-Robert Automotive President Robert Simpson. "To maintain our market position, we had to look for ways to reduce our costs."
Siegel-Robert Automotive's move to China came out of a decision to follow its biggest customer, General Motors. "We transferred our processes to China to grow our business with GM," Simpson said.
The supplier chose Suzhou, an hour's drive from Shanghai, because of its proximity to Shanghai General Motors.
In addition to injection molding, Siegel-Robert Automotive does decorating, including electroplating of copper, nickel, chrome and special finishes; painting; and assembly. Among the parts it will manufacture are radiator grilles, nameplates, door handles, interior trim and side moldings.
The plant can buy most of its resin locally, according to the company.
GE Plastics is its primary supplier now, and the company also is considering Dow Chemical Co. as a possible China source, Simpson said.
Though China is touted as a low-cost country, "resin costs are about the same as what you pay in North America," Simpson said.
"The savings are in labor-related costs," he said.
Other customers include Toyota Motor Corp., DaimlerChrysler AG, Nissan Motor Co. and Honda Motor Co. But Siegel-Robert Automotive also wants to plumb the export market.
"When we set up the facility in China, we had two things in mind: export back to North America and grow our share in China," Simpson said.
The Suzhou site will have design capabilities, though r&d still will be conducted in the United States. The company also plans to establish a China tooling group that makes tools and plating racks to take advantage of the country's "more competitive" tooling prices, he said.
The China plant's launch will not result in Siegel-Robert Automotive closing any of its U.S. plants -- six in all, in Missouri, Kentucky,
Siegel-Robert Automotive's Robert Simpson: The China plant is opening doors in Europe, too.
"We see growing in the U.S. and in China, and hopefully more in Europe," he said.
Simpson said that the supplier's China presence also is opening doors to the European market, as the company already has been contacted by Renault and PSA/Peugeot-Citroen.
"All of a sudden," he said, "the European (carmakers) are knocking on our door to see if we can export back to Europe."
You may e-mail Alysha Webb at [email protected]