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RPT-INTERVIEW-UPDATE 1-Schaeffler plans big China investment

Published 04/19/2011, 08:47 PM
Updated 04/19/2011, 08:52 PM
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(Repeats story from Tuesday)

By Fang Yan and Jacqueline Wong

SHANGHAI, April 19 (Reuters) - German auto parts maker Schaeffler plans to invest $700 million in China over the next four to five years, as it speeds up expansion in the world's biggest auto market, its Asia chief said on Tuesday.

Schaeffler, which competes with Continental AG among others in China and elsewhere, expects its China sales to grow between 30 to 40 percent in 2011 from a year earlier base of $1.5 billion, Wolfgang Dangel told Reuters on the sidelines of the week-long auto show in Shanghai.

"We have invested about $700 million in China from 2000 and 2010, we will probably invest the same amount in the next 4 to five years," Dangel said in an interview.

Schaeffler, which set foot in China in the late 1990s, has five fully owned production facilities here and the number will more than double to 11 in 2015.

By then China will account for 15 percent of its global sales, rising sharply from less than 2 percent in 2006, he added.

Car sales in China climbed only 9.1 percent in the first quarter, down sharply from a 33.2 percent gain in 2010, after the government stripped away most of its policy incentives at the end of last year.

Schaeffler, which counts Volkswagen , SAIC Motor and others as its automotive clients, however, saw little impact so far from the slowdown.

"When you talk about the slowdown here, it's not the definition of slowdown as we know from North America and Germany, it's still growing," he said, adding Schaeffler has been stepping up its local production as an alternative.

EV OPPORTUNITY

Volkswagen's Skoda and Schaeffler have recently unveiled a concept electric car equipped with Schaeffler's power train in Europe.

Dangel also saw huge business opportunities in China where the government will invest more than 100 billion yuan ($14.8 billion) to subsidise its fledgling green car industry over the next 10 years. [ID:nTOE67303F]

The company has just set up an E-mobility team in China , heavily focused on automotive business.

However, China's tentative move of forcing foreign companies into local partnership in supplying battery and other major components to green vehicles, is a setback for Delphi and the likes.

Dangel said he was not worried about it before the government makes a final decision.

"I think we just have to be alert to watch very carefully about what will happen. At the end of the day, we are still self-confident as we have enough technology and expertise on our hands. No matter what the final outcome will be, we can contribute one way or the other." (Reporting by Fang Yan and Jacqueline Wong)

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