The company produces components in four Chinese cities and operates seven R&D centers in the country.
In 2021, Vitesco recorded 8.3 billion euros ($8.6 billion) in global sales, of which roughly 18 percent was generated in China.
The German supplier predicts China will account for 35 percent to 40 percent of global light vehicle production in 2030.
“Therefore, we obviously plan to grow in this market,” Gregoire Cuny, Vitesco’s China president, told Automotive News China this month during a news briefing in Shanghai.
To drive growth, Vitesco has invested more than $516 million in China since 2019, Cuny said.
In 2021 alone, Vitesco opened a new R&D center in Tianjin to develop batteries, motors and electronic control systems for full electric vehicles, hybrid vehicles as well as 48-Volt systems for mild hybrid vehicles. It also added a lab in Changchun for product validation.
The German company forecasts that electrified vehicles including EVs and plug-in hybrids will exceed traditional vehicles in global sales by 2027.
In China, while continuing to supply customers that produce locally, Vitesco has also won orders from a slew of Chinese carmakers for key components used in EVs.
It landed an order this month from Human Horizons to supply vehicle control electronics, battery management components and high voltage current modules for the Chinese EV startup’s new vehicle platform.
Last year, it signed a contract to supply high-voltage inverters to Great Wall Motor Co., a major private Chinese light-vehicle maker. In 2020, it obtained an order for e-axles from state-owned auto manufacturer Dongfeng Motor Group.
Cuny said it is an important learning experience for Vitesco to work with Chinese EV startups such as Human Horizons.
“These new entrants develop software-defined vehicles,” he said. “That’s something we have a lot to learn in this kind of partnership with them, because we have our expertise and they have the innovation power.”
He added that as a partnership the two companies “can combine and create great ideas and we see that already in our development.”
In addition to the global semiconductor chip shortage, Cuny said Vitesco’s China production has been negatively impacted by local governments’ zero-COVID policies.
Some of Vitesco’s factories in Changchun, Shanghai, Tianjin and Wuhu were adversely affected to varying degrees by lockdowns earlier this year, he said.
“As a foreigner, I can tell you I am deeply impressed by the motivation and resilience of the employees who were living on site in these factories. I can tell you this will never happen anywhere else in the world than here,” he noted.
The Chinese auto industry has steadily recovered since June, when Shanghai, China’s largest city and auto production hub, came out of a two-month lockdown, and the central government rolled out tax incentives for gasoline cars.
Vitesco this week adjusted its forecast for 2022 auto production in China. It expects vehicle production to now grow five percent to seven percent, rather than remain flat as previously predicted.