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Faurecia celebrates 25 years in China

Auto News - Published on Tue, 07 May 2019

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This year Faurecia celebrates 25 years in China. With a strong momentum in new energy vehicles and a keen appetite for advanced technology solutions, the Chinese automotive market has a buoyant future that looks set to lead the way in key automotive trends.
Faurecia has developed its activities in China while the country expanded to become the world’s largest automotive market. We have focused resources on supporting the dynamic rise of Chinese carmakers, who now represent around 50% of the market, as well as working with our traditional international automotive partners especially for premium vehicles. With an average passenger car rate of 130 vehicles per 1000 inhabitants, compared to 600 for Europe or 900 for US, and a rapidly rising demand in tier 4 and 5 cities, there are plenty of reasons to remain upbeat despite the economic slowdown we have experienced since last September.

Following 28 years of steady growth, car production declined in 2018 by 4.2%. Output and consumption was affected by macro-economic factors – US / China trade talks, weakening currency, fall in stock prices – and the Chinese Government decision to rapidly reduce peer to peer banking. Some specifics to the automotive industry have as well had an impact. The development of the second hand market and the booming of ride-sharing across China have certainly affected demand. DiDi for example announced it had reached 30 million rides a day last year. Other factors include local authority measures to tackle air pollution and limit the number of cars in cities, in addition to consumer confusion over the timing implementation of China’s new emissions standard CN6.

In 2019, the Chinese government has taken steps to bolster the economy with important cash injections, a reduction of value added tax for manufactured goods, a relief on high tier cities limitations on new cars registrations and has set an objective of over 6% GDP growth - typically an important driver for the automotive market. In recent years, the government had also played a significant role in stimulating the auto industry in two key directions – Intelligent Connected Vehicles and New Energy Vehicles – as well as developing China’s leadership in mobility-related technologies. The National Development and Reform Commission has the ambition that 50% of all new cars by 2025 will be smart, connected and partially autonomous in a bid to reduce road casualties, congestion and energy consumption. China has also driven a major shift towards the electrification of vehicles with its dual credit system and incentives for manufacturers and cities to adopt strict new emissions control standards, while encouraging industry investment in zero emissions solutions such as Fuel Cell technologies.Since our first production in China in 1994 (exhaust systems in Wuhan for Dongfeng Peugeot-Citroën Automobile), Faurecia China has now developed into a leading automotive equipment player, with advanced technology solutions across 4 product lines, employing more than 20,000 people in 4 R&D centers and 70 factories across the country. China has become a key area of focus for Faurecia not just because since 10 years it has been the world’s largest automotive market but, because today, it is taking the lead in the rapid evolution towards next generation connected cars, new energy vehicles and future mobility services.
A number of growth levers have allowed us to achieve our ambitious goals, including doubling our sales revenues every five years. Let’s focus on the two most important ones.

The first reason for our rapid development has been Faurecia’s ability to develop successful partnerships with Chinese OEMs since 2013. Our recent joint ventures with Wuling Industries, BYD or Dongfeng are excellent examples of this dynamic. This has enabled us to increase our accessible market in the domestic automotive industry and consequently to increase our market share.

Secondly, our technology expertise and strategic focus on Sustainable Mobility and Cockpit of the Future have been key elements in growing our content per vehicle. Being close to the market, we have capitalized on strong demand for intelligent features that enhance user experience – from premium solutions for FAW’s Hongqi to disruptive innovations for Byton’s electric crossover, to highly connected electronics solutions with Chang'an as examples. We expect our first complete Cockpit of the Future solution to go into serial production in China over the coming 2-3 years.

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Posted By : Mohan Sharma on Tue, 07 May 2019
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