Johnson Controls has announced plans to build 10 more auto seating plants in China within five years as part of the company’s strategy to continue its growth in the world’s largest car market.
The strong expansion in China and the slow expansion in North America will help Johnson Controls offset the expected slowdowns in Europe. Johnson Controls CEO Steve Roell told investors he remains optimistic on China. “We think it will continue to prosper, though not as fast as it has been,” Roell was quoted as saying by Automotive News China.
The auto parts supplier has a $5 billion turnover in China, operating a total of 56 plants, both wholly-owned and joint ventures. According to Roell, Johnson Controls supplies 45 percent of car seats in China. “Ninety-nine percent of what we do in China stays in China or in Southeast Asia. We did not go to China for labor arbitrage, we went to participate in the local market,” Roell said, avoiding any details about the new sites.
Johnson Controls has invested in additional capacity to make individual components for seating, including more capability for metal parts. The CEO said that came as a consequence of automakers’ requests to award contracts for individual parts, rather than the complete seat.