Spanish engineering company Gestamp has launched a research and development center in Shanghai to work closely with Chinese automobile manufacturers, a senior executive said on Wednesday.
The R&D center, which specializes in the production of lighter and safer vehicle bodies, is aiming to enhance its ties with Chinese original equipment manufacturer (OEM) clients.
According to Gestamp, its expanding speed in the Chinese market has outgrown its growth in the overall global market by six times, and it has become the company's fourth largest market.
"We came to China initially to support the international companies but in the last few years we have been developing very rapidly with the local guys," said Kevin Stobbs, the group's chief executive in Asia.
"We are a key partner with Geely today. We are also moving ahead with others like GAC Group, BYD and we continue to hold discussion with OEMs of new energy vehicles."
The new R&D center will cost the group 18.9 million yuan (.86 million) in the first phase. The group invested more than 2.2 billion yuan in China from 2013 to 2016, and achieved 5.28 billion yuan in sales last year.
According to the Ministry of Industry and Information Technology, by 2016 China had more than one million new energy vehicles, one-fifth of the world's total number. The country also plans to achieve an annual sale of two million such cars by 2020.
"The new energy power requires the vehicle to become light-weighted in the future," said Bo Deming, the project manager of China Automotive Technology and Research Center. "A lighter vehicle body can extend the use of battery (and) ... lower down the manufacturing cost."
As the country is turning into the world's largest market for new energy vehicles, Gestamp recognizes China will continue to become a strong pull for growth.
"Hot-stamping technology is one solution to make lighter vehicles," said Ignacio Martin, general director of Gestamp's bodywork R&D division.
"We use steel from such technology that is six times harder than traditional steel, which allows us to make thinner design with same hardness.
"We are also developing battery cases of mixed material including compound aluminum," he said.
Other engineering companies share a similar vision. DSM Engineering Plastics Inc, a Netherlands-based company, is also enlarging its manufacturing capacity in China for lighter plastics products for new energy cars.
According to Jason Zhang, commercial director of DEP in the China region, DEP's business is growing "rapidly and the outlook remains optimistic", as the company's production line in Jiangyin, Jiangsu province has reached more than 100,000 metric tons in terms of production capacity.