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Hella opens new lighting plant in Tianjin, expects further LED penetration

TIANJIN – Hella expects LED lighting systems to exceed over 50 percent of its lighting business over the next few years and continue to penetrate the automotive lighting market, according to Markus Bannert, vice chairman of Beijing Hella-BHAP Automotive Lighting Co., Ltd., executive board member of the Lighting Business Division of Hella and head of Hella’s Global Auto Lighting Division.  

Bannert made the comments in an interview on October 26 prior to the opening of the lighting and electronics supplier’s new lighting plant in Wuqing of Tianjin, about 60 km to the southeast of Beijing.

“Five years ago nobody expected that LED would come in that extent and that fast to the market,” said Bannert. “Looking at the latest projects and developments, we will see xenon will somehow disappear in the next years, more or less exiting the market. Halogen for sure will have its future, but LED penetration will continue, and this is also true for the Chinese market.”

The new Tianjin factory, named Hella-BHAP (Tianjin) Automotive Lighting Co., Ltd., becomes Hella’s fifth lighting plant in China. It has a total investment of about ¥200 million with equity split between Hella and Beijing Hainachuan Automotive Parts Co., Ltd. (BHAP), the components subsidiary under BAIC Group.

With a floor space of about 39,873 square meters and a building space of 21,520 square meters, the new factory specializes in the production of headlamps, rear combination lamps, car body lighting and interior lighting, with annual output capacity estimated at 1.2 million headlamps and car body lightings each. It has more than 100 employees at present but is estimated to bring 250 new jobs over the next two years. The products will meet growing demands for LED lighting systems from BAIC Group vehicle subsidiaries Beijing-Benz (BBAC) and BAIC Motor.

In fact, all of the lighting products to be produced there will be LED-based and more than 90 percent of several dozen OEM projects under development are LED lighting systems, according to Wang Fahao, president of Hella-BHA, which owns both the new Tianjin plant and the existing Sanhe plant near Beijing.

“Chinese brand OEMs now demand more on styling and technology of lighting rather than just optical performance and use that as a selling point,” said Wang. “As the global-leading lighting supplier, Hella can provide these solutions to help Chinese brands to further elevate their core competitiveness.”

Wang revealed that the Tianjin plant will be supplying lighting products to the upcoming facelift version of the Mercedes-Benz C-Class in mid-2018, the A-Class sedan that will launch by the end of 2018, as well as the next generation of the GLA and GLB SUVs in 2019 and two upcoming EVs by 2020, all produced at BBAC.

“Regarding the expansion of Hella’s business in China, the founding of this factory is an important step and it further mirrors Hella’s long-term commitment to the Chinese market,” added Bannert. “The Chinese market is constantly growing and we will bring Chinese customers the most advanced lighting technologies and products.”

Bannert emphasized that Hella is fully open to share the latest technologies with its partners in China and the cooperation with BHAP over the last three years has been a “perfect fit” in that BHAP offers access to local customers and Hella can provide the most recent technologies to BBAC and BAIC Motor in order to drive innovation in the region and for BAIC Group.

“Tianjin, where the new factory is located, is of strategic importance to the Chinese automotive industry, particularly to the BAIC Group, because a lot of our VIP clients are located here,” said Chen Bao, chairman of Hella-BHAP and president of BHAP. “Hella is a perfect partner for BHAP, and we join hands to develop the automotive lighting business in this region and provide our clients with the best services and support.”

Chen said in the interview that the opening of the Tianjin plant was due to a combination of reasons including capacity constraints at Hella-BHAP’s existing plant near Beijing, heeding the call for the Beijing-Tianjin-Hebei integration and local support and preferential policies from Wuqing.

Hella-BHAP has set up its own R&D center to develop products with unique technologies catered to local customers, according to Chen, and has achieved 50 percent annual growth over the last few years. Sales revenues reached more than ¥600 million last year and are expected to top ¥1 billion just in the Tianjin plant alone in the initial stage, according to Wang.

Hella currently also has a lighting plant in Jiaxing, Zhejiang Province with an annual output capacity of about 2.5-3 million headlamps and 6 million rear combination lamps, as well as its Changchun lighting plant with a capacity of about 2 million headlamps. It basically has more than doubled its lighting footprint in China, according to Bannert.

He predicted that lighting content will continue to increase because lighting function is changing from purely illumination to intelligent communication both outside and inside the car as autonomous driving, connectivity and individualization advance.

Hella had revenues of about ¥7.7 billion in China in fiscal year 2016/2017, which accounted for about 14 percent of its global revenues of €6.5 billion. That proportion is expected to increase to 20 percent or more in the future, according to Bannert.

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