Firm boosts localization plans ahead of forecasted GDi growth
Auto spare part supplier Delphi Automotive PLC will start producing injectors for gasoline direct injection engines in its Shanghai plant in July 2015, according to a senior company executive.
The leading auto spare part supplier's Shanghai facility was designed to produce 5 million injectors a year and was part of the company's localization plan, said Kevin Quinlan, vice president of Delphi Powertrain Systems.
The company's latest announcement came after the plant began producing high-pressure fuel pumps£≠another component of the GDi system£≠in early September.
Each year 1.5 million pumps will be produced at the plant, according to the company.
GDi systems are about 15 percent more fuel efficient than conventional port fuel injection ones and help reduce emissions but are two to three times the price of PFI systems.
Because Chinese customers are price-sensitive, GDi engines have a smaller market share in the country, compared with developed nations, said Quinlan.
He predicted that the situation will soon change as both Chinese car owners and the authorities want more fuel economy and better air quality.
Statistics from automotive consulting firm IHS suggested that at least half of an estimated 30 million vehicles on China's streets would be equipped with GDi systems by 2024.
Quinlan said these prospects were the most important driving force behind Delphi's localization campaign.
"Let's do the math. China is the largest auto market in the world and 50 percent of cars will have GDi systems, so Delphi should be here," he said. Quinlan said the Shanghai facility already provided products to three local automakers and three international ones.
The trend of GDi's prevalence is very clear as "all OEMs are producing GDi engines," said Quinlan.
"The GDi market is growing rapidly£≠from about 5 million engines globally in 2010 to an expected 37 million engines in 2020£≠and will result in nearly half of all gasoline engines featuring GDi technology worldwide," he said.
Delphi has also established three research and development centers in China that have more than 2,900 engineers.
"Different from many competitors who offer one solution worldwide, we have plants and research facilities in many regions. They mean more work and money, but we can better meet local demands," said Quinlan.
He said Delphi also purchased raw materials in China and that 40 percent of raw materials for products at the Shanghai facility were locally purchased, with the figure expected to grow to 80 percent.
The company is also working on diesel engine management systems in China, with a plant recently finished in Yantai, in Shandong province.