Brose Sitech braced for high growth

Brose Sitech, a joint venture between Volkswagen and Brose, expects its growth in China to eclipse what the company has achieved in Europe, according to the vehicle seat maker's top executive.

"By 2030, we estimate China will make up approximately 50 percent of the global demand," said Thomas Spangler, CEO of Brose Sitech, which is headquartered in Poland.

Speaking at last week's opening ceremony of the company's new plant in Hefei, Anhui province, Spangler said Brose Sitech has a goal to grow its global revenue to 2.8 billion euros ($2.97 billion) by 2030. Of that figure, he estimates Europe will account for around 20-25 percent by the end of the decade.

Noting that growth must be profitable, the company will not focus strictly on sales, he added.

"We will always pick projects where we can refinance our future development, but the growth rate for Brose Sitech in China will definitely be higher than in Europe," he said.

The Hefei plant is Brose Sitech's second manufacturing facility in China, with the first in Shanghai. The Hefei operation is primarily designed to produce vehicle seats for Volkswagen's joint venture in Anhui province. Its products include metal seat frames, complete seat assembly and just-in-sequence supplies.

"It's not the biggest plant, but its strategic importance is big enough," said Spangler, adding the company expects to serve other local marques in the province as well, which is emerging as one of China's new NEV powerhouses.

"Anhui is an important production center for the Chinese automotive industry and China itself is of great importance to the global market," said Spangler, who worked here from 2010-15 and said his latest trip was "like coming home".

"European automakers used to play a leading role here but in terms of electric cars, Chinese companies have kind of leapfrogged them in their development," he added. And regarding the prospects of China's vehicle sales, Spangler said he expects to see an increase of around 4 percent year-on-year going forward.

"I don't think this is losing steam; it is just coming to a more normal situation," said the CEO. "This is a healthy growth, 4 percent per year. Combined with a higher flexibility, it should give us a good possibility to be competitive.

"China has become a steadily-growing but more mature market. During the boom times when you had growth rates of 10 percent or 15 percent year by year, we as a supplier sometimes didn't know how to serve the demands," he said.