SHANGHAI – Can multinational suppliers innovate technologies in China and apply them globally?
The answer from Adient is a definite yes.
“In the future, some of the things that we develop for China actually will then be globalized in other markets because of the unique solutions that we will find from China,” said Richard Chung, vice president of Global Innovation at Adient. “We see that more and more.”
Chung made the comments at Adient’s media briefing held at its China headquarters in Shanghai on April 17 prior to the start of this year’s Shanghai Auto Show.
Chung said that multinational suppliers first had their globalized technologies coming into China, but as they “lobalize,” local China solutions will be more and more globalized.
One of the unique solutions Chung mentioned that are developed in China is the rear seating accommodation that is very different than the rest of the world, such as the importance of second-row seats for MPVs.
“The answer is absolutely yes in terms of product development,” said Mark Sutton, vice president of APAC Engineering. “Four of our 12 global tech centers are here and all of them are developing products or programs for global applications. Seating mechanisms, adjustment, recliners, tracks and power drives are being developed here not just for export but for manufacturing locations throughout the world.”
Chung also stressed that development cycle is very fast in China and a 12-18 month window to develop a new product has been a very normal process for Adient for many years. “We are accustomed or used to it. We are very ready to support our customers in China,” said Chung.
“We work with a lot of Chinese OEMs and they are moving much faster,” said Darlene Knight, vice president of Adient and head of China operations. “Not only the foreign OEMs in China but also Chinese OEMs themselves.”
Adient, which spun off from Johnson Controls last year into an independent seating company that still remained as the world’s largest, opened its Shanghai office in January and debuted at a major auto show in China for the first time after appearing at the Detroit Auto Show as an independent seating brand.
At the Shanghai Auto Show, Adient unveiled its latest iteration of the AI17 SAE Level 3/4 autonomous vehicle seating demonstrator as well as a host of other new seating concepts, products and autonomous driving solutions for the vehicle interior that were in fact designed and engineered in China for the local, regional and global automotive industry.
Some of the key products on show included the Integrated Luxury Seat that was independently innovated, designed and engineered by Adient Yanfeng Seating Mechanism Co., Ltd. (AYM), one of Adient’s JVs in China; “Luxury by Design” that showcases a wide range of production-ready seating solutions in comfort, trim, user interface and distinctive aesthetics; Commercial Vehicle Seating that shows an extension of the existing modular truck seat platform tailored for China and Asia Pacific markets; Seat Structures and Mechanisms primarily developed and engineered in China.
Additionally, Adient’s Recaro Automotive Seating Group presented tailor-made products for Chinese OEM customers and for aftermarket applications in China as it prepares its market launch in China as the premium brand manufacturer of performance seats for sporty luxury vehicles.
Adient also announced that AYM plans to expand its metals and mechanisms plant into a new 970,000 square foot plant to be built in Changshu, Jiangsu Province that will employ 2,000 employees, comprised of current employees and new local hires.
“China is a great story for Adient. Our unconsolidated seating revenue, driven primarily through our strategic JV network in China, grew approximately 13 percent year-on-year, excluding the impact of foreign exchange,” said Knight.
Adient currently has 17 seating JVs in China employing approximately 31,000 team members in four global technical centers and 67 plants in 37 locations across the country. Last year, Adient had unconsolidated revenues of about $7.5 billion in China, according to Knight.
The company currently has about 45 percent of the seating market share in China versus 34 percent globally. Within China, about 40 percent of its business is with European OEMs, 22 percent with North American OEMs, 19 percent with Chinese OEMs and the rest with other Asian OEMs.
“China has been a great success for Adient. We’ve been successful in China for over 20 years through our long standing relationships with our JVs, customer diversity, great manufacturing footprint, tech centers, investment, cost and quality and on-time delivery,” said Knight.
Knight believes there is tremendous opportunity for growth in China even though the market base is already high and growth will slow. “We expect by 2021, the industry will grow by another 5 million units and by 2025 about 8 million,” said Knight, who expects car ownership per 1,000 people will reach 176 by then based on IHS’s prediction of a 3 percent growth annually between now and 2025.
Adient will also support Chinese OEMs’ ambitions to grow outside of China, which will eventually lead to about 2.5 million units in production capacity outside China by 2025, according to Knight, who thinks Adient is well positioned to partner with them as they grow outside of China.
“We will leverage our strength in China to grow in the rest of the world,” said Knight.