MAHLE is adapting to the increase in vehicle production in Asian countries and to Asian vehicle manufacturers relocating their production. The research and development center in China is being expanded, a new production plant is being built in Japan, and two plants are being enlarged in Thailand.
It is forecast that Chinese vehicle production will increase from today's level of about 20 million units (passenger cars and commercial vehicles) to 30 million units per year by 2017. Development contracts will increase accordingly. MAHLE is preparing itself in view of this development and is expanding its existing research and development center in Shanghai.
The location, which comprises central functions such as sales, purchasing, human resources, IT, and finance in addition to research and development, will be expanded by adding three new buildings. Nearly 9,000 square meters of additional lab and office space will be added to the existing 7,000 square meters. Following the expansion, the research and development center will have six boxes for complete engine test benches, in place of the two it has today. The number of employees can be increased from currently 230 to as many as 450. The official opening will take place on November 13, 2012.
On the north end of the island of Kyushu, well-known Japanese vehicle manufacturers currently produce about 1.5 million vehicles annually—with a rising trend, although the total number of vehicles built in Japan is stagnating. One advantage of the location in Kyushu is its access to seaports, which are important for exports and imports with East Asian markets. Proximity to Korea is also significant, because many supplier parts are imported from there. Furthermore, qualified employees are available in the region. After the earthquake and tsunami in March 2011, dividing production plants between two islands (Honshu and Kyushu) presents a way to minimize risks.
Since one of our most important Japanese customers is going to move the majority of its vehicle manufacturing to Kyushu, MAHLE has begun to construct a new production plant for air intake and filtration systems in the region. It is near the production plants of important customers such as Nissan, Toyota, Mitsubishi, and others. The production area will be 7,500 square meters in the first stage of construction. Completion is scheduled for September 2012 and start of production for the end of the year.
More and more Japanese vehicle manufacturers are relocating production of passenger cars and commercial vehicles to Thailand. This is partially due to the strong yen, which makes it harder to export vehicles from Japan. In addition, local vehicle demand is expected to grow from about 870,000 units today to over one million units in 2017. In order to defend and increase our market share with Japanese manufacturers, MAHLE is following the trend and is expanding the two existing MAHLE plants in Thailand.
MAHLE Engine Components (Thailand) is enlarging its plant at the Bangkok location, which mainly produces pistons. Construction work on the new 45 by 90 meter building should be completed by September 2012. The new building will house an assembly line as well as measurement and testing equipment. It will also provide space for future machining and coating lines.
In Samutprakarn, MAHLE Siam Filter Systems is adding considerably to the existing location. The new buildings measuring 5,000 square meters will primarily house storage areas and offices. The previous areas that will be cleared will then have space for two new production lines for oil coolers and greater capacity for the production of air intake systems and valve covers.