"In China for China" is a point repeatedly emphasized by Continental. Under the localized R & D and production model, "Wuhu is one of our important R & D bases," said Andreas Wolf. "The completion of the Huashan factory, localized production and processing Localized R & D, coupled with the independence of Vitesco Technologies, allows us to better match the pace of electrification in China. "
From June 25, 2018, the first pile of the new plant's foundation was laid.On July 18, 2019, only 388 days, the first phase of the Continental Power Plant's new plant in Wuhu, China, officially opened. This is the sixth powertrain plant that Continental has built in China except Shanghai, Changchun, Tianjin, Chongqing and Changzhou. At the same time, this is also the first base for Continental Powertrain to open after independence.
As the Continental Group that has been ploughing in Wuhu for 25 years, the new plant opened and expanded is also called the Huashan Factory. It is another new factory following its Yinhu Factory and Longshan Factory invested in Wuhu. This will be the Continental Group. An important step in continuing to cultivate the Chinese market.
As Andreas Wolf, CEO of Continental Powertrain, said, China is the world ’s largest automotive market and new energy vehicle market. The new plant can meet the growing demand for powertrain technology in the Chinese market, which also shows that Continental ’s The confidence and commitment of local customers and business partners to develop together.
Andreas Wolf, CEO of Continental Powertrain
"To further improve the ecological environment, especially air quality, the Chinese market has huge demand for green mobility and automotive energy-saving emission reduction technologies," said Tang En, President and CEO of Continental China. "The expanded Wuhu plant allows us It can more quickly meet the needs of the Chinese market in terms of internal combustion engine energy saving and emission reduction technology and automotive electrification technology, and provide cleaner and more efficient power solutions for China's beautiful travel. "
As we all know, in the second half of 2018, the global automotive industry economy experienced a sharp decline. In 2018, China's auto production and sales ushered in the first negative growth after 28 years of high growth.The upstream component companies' revenue capacity and net profit were affected by this. This can be seen from the annual and quarterly financial reports of various companies, the global top 100 parts list, or the recent world top 500 list.
At the same time, the automotive industry is undergoing a period of rapid transformation. Global automotive emissions standards are becoming more stringent, forcing companies to accelerate their transition to energy saving, emission reduction and electrification. Electricity has become an important trend in the future.
Under such circumstances, Continental Group chose to divest its powertrain business and set up an independent new company "Vitesco Technologies". It plans to announce the new company's Chinese name and logo, new ideas, etc. in October this year, and will open 20% -25% The company's shares are IPOed externally, thereby more focused, faster and agile response to the rapid development of the market in powertrain.
"The new Vitesco Technologies will respond faster and be more flexible. On the one hand, we will benefit from greater freedom. On the other hand, we will still benefit from the support provided by the parent company," said Andreas Wolf.
"In China for China" is a point repeatedly emphasized by Continental. Under the localized R & D and production model, "Wuhu is one of our important R & D bases," said Andreas Wolf. "The completion of the Huashan factory, localized production and processing Localized R & D, coupled with the independence of Vitesco Technologies, allows us to better match the pace of electrification in China. "
The new plant, which is being built this time, will start producing various powertrain products this month, including thermal management components and sensors and actuators used in internal combustion engines and new energy vehicles.
One of the key products is the coolant flow control valve that can be applied to the vehicle's thermal management system. It can flexibly switch the heating and cooling circuits in order to transfer the required heat or cold air to the correct position, thereby improving efficiency and improving electric Car mileage. Currently, the new plant is expected to begin production of the first orders for electric vehicles by the end of this year.
Continental Thermal Management System
"Looking forward, we will further enhance our local competitiveness in electrification and low-emission powertrain technology, and contribute to the promotion of environmentally friendly mobility," said Gregoire Cuny, head of Continental Powertrain China.
Gregoire Cuny, Head of Continental Powertrain China
The following is part of the interview record for reference:
How does the Continental Group respond to the electrification wave?
Reporter: Someone once said that the proportion of pure electric vehicles in China will reach about 50% by 2035. Do you agree with this judgment? How does Continental view the development relationship between fuel and electrification?
Mr. Tang En, President and CEO of Continental China
Tang En: Automotive electrification is advancing at a rapid pace, especially in the Chinese market. In the past two years, the annual growth rate of electric vehicles and plug-in hybrid vehicles has been very fast. In recent years, the automobile market has continued to decline, and sales of electric vehicles and plug-in hybrid vehicles have continued to rise. Last year, the total number of light vehicles was nearly 25 million, and new energy vehicles were more than 1 million, accounting for about 5%, and this year may be even higher, reaching 5% -6%. In the future, we believe that the electrification of powertrains, including pure electric power, plug-in hybrids, including micro-hybrid and middle-hybrid powertrains, will definitely last for a long time. It's hard to say when electric cars will overtake internal combustion engines, and there will be a process in between.
Andreas Wolf: In fact, we think that it takes a long time for pure electric vehicles to reach 50% or 80% of the market. For example, long-distance cars, pure electric vehicles are not applicable if the driving distance exceeds 500-700 kilometers. At this time, other technologies may be needed, such as fuel cells.
However, the pace of electrification in China is much faster than other markets, and Chinese car owners are more interested in new technologies. Therefore, we have chosen to launch the sixth powertrain plant in China, which is of great strategic significance to our strategy. On the one hand, it is the enhancement of production capacity, and on the other hand, Wuhu is also one of the important bases for our research and development. From the perspective of research and development, we have always focused on "local for local" or "in China for China". Therefore, localized production plus localized R & D, coupled with the independence of Vitesco Technologies, allows us to better match the pace of electrification in China.
Reporter: The electrification of automobiles is the current mainstream trend. In the future, what kind of plans will there be for powertrain product development? Is there any relevant product output?
Tang En: In the strategic aspect of the powertrain business, we are actively planning R & D and production in various technical fields, such as the high-voltage field. Our three-in-one high-voltage electric drive EMR3 will also be mass-produced at the Tianjin plant by the end of this year. Continental signed a joint venture agreement with AVIC Lithium in March last year to develop and produce 48-volt battery packs to meet market demand.
However, internal combustion engine technology is still the mainstream of the market, and currently accounts for 95% of sales. As the emission standards for automobiles in the global field become more stringent, the demand for internal combustion engine energy saving and emission reduction has surged. This is also a very good opportunity for the powertrain business segment. We have invested heavily in traditional internal combustion engine energy-saving emission reduction technologies to meet increasingly stringent emissions and fuel economy regulations.
Investment Expansion, Capacity Layout, Mainland Powertrain, New Plant in Wuhu, China
(From left to right) Mr. Gregoire Cuny, Head of Continental Powertrain China, Mr. Andreas Wolf, CEO of Continental Powertrain, Mr. Tang En, President and CEO of Continental China, Zero Powertrain of Continental China Mr. Klaus Hau, Executive Vice President, Parts Division
Business separation, will the new Wuhu factory be different?
Reporter: After the Continental Powertrain business was split into independent companies, were there any new changes before the year-on-year split? Will it have a specific impact on the Chinese market?
Andreas Wolf: A few years ago, we observed the global performance and market trends of Continental's various businesses, including chassis and safety, body electronics, tires, and ContiTech. We found that powertrains have their special features. Different from other business lines of Continental, the development of powertrain is mainly driven by laws and regulations, such as Euro 6 and China 6. The regularity of the powertrain business is not the same as other lines, it must have greater freedom.
But I don't think that the split of the business will adversely affect the Chinese market, because we are still under the Continental Group and we are still a Continental Group company. The powertrain company will partially IPO, that is, 20% -25% of the shares will become tradable shares, but the remaining 75% -80% of the shares are the shares of Continental Group, which will allow us to benefit from Continental Group At the same time, it can respond to market demands more flexibly, agilely and faster.
Tang En: The Chinese market is one of the important markets in the global powertrain business segment. The changes are more positive. We will be more focused, faster and more agile to adapt to the Chinese market in powertrains. Rapid development.
Including the continuous upgrade of fuel vehicle emission standards, including the average fuel consumption of gasoline, including the proportion of electric vehicles and the trend of electrification, how to adapt to the development of the very fast and dynamic powertrain in the Chinese market is also one of the main driving forces for structural adjustment.
Reporter: What is the reason for choosing Wuhu as the first factory to expand and open after independence? And is there any strategy for future talent training?
Tang En: Why choose Wuhu? In addition to the full support of the local government, through 25 years of accumulation in Wuhu, we have established a very capable workforce. We have accumulated very rich experience in both research and development and industrial production, which enables us to Continuously provide new products to the market. In the future, we will also fully decentralize to ensure that he can have more responsibilities and more freedom in research and development in the local management. Therefore, our products are not only focused on China but also the world. Talent strategy is full authorization and decentralization.
Reporter: What types of cars or OEMs will the products produced by the new factory be mainly targeted at?
Andreas Wolf: The products we produce are aimed at both international and local OEMs. They are mainly used in passenger cars, but our technology can also be applied to commercial vehicles and two-wheelers. Therefore, based on passenger cars, it can be extended to commercial vehicles and two-wheelers.
Reporter: When selecting a local supplier for a new factory, what criteria will it mainly consider?
Tang En: We are very open in selecting local suppliers, and we also welcome the high localization and localization ratio. You just asked about the criteria for selecting a local supplier. In fact, it is not different from other parts of the world. We still consider the supplier's quality, technical capabilities, cost competitiveness, and technology development capabilities. It is not limited to the Chinese market. There must be International vision.
Reporter: What is the automation level of the new factory?
Shi Sen (General Manager of Continental Automotive Electronics (Wuhu) Co., Ltd.): When investing in all new production lines, we will study lean manufacturing methods. We have a very important node for the production line launch, and we are now stepping up the progress of automation step by step. At present, the concept of each production line is that employees only perform picking and fetching actions. No one worker does any equipment work, and all equipment work is done automatically. In the future, we will step by step replace the work that employees take and take with the current collaborative robots.