Set up by Japan's Aisin Seiki and Toyota Tsusho and China's Ruifeng Investment, Aisin-Hongda has invested 500mn yuan ($70mn) to build the plant in Taizhou city in east China's Zhejiang province. The plant has a design capacity of 7.7mn units/yr for automotive parts and components. The plant will focus on producing 1.2mn units/yr of automatic gearbox valve bodies for Chinese auto producer Geely Auto.
Geely sold 105,468 cars in April, up by 44pc from March and 2pc from a year earlier. Sales for January-April fell by 33.79pc to 311,495 units in response to lockdown measures during the coronavirus outbreak. Geely's market share rose to 7.2pc in the first quarter, up from 6.5pc a year earlier.
Aisin, together with China's ARN, has also invested in a plant with four production lines in Anqing city in east China's Anhui province with a total capacity of 1.5mn units of transmission housings. The plant is scheduled to start production this year.
Output growth in the automotive sector is forecast to support demand for automotive parts and their feedstocks, including aluminium, magnesium and silicon.
China's auto industry has started to recover since April as the coronavirus outbreak eased in the country. Domestic production in April was up by 2.3pc from a year earlier to 2.1mn units and sales up by 4.4pc to 2.7mn units, ending sustained falls during the past 21 months. The country's car sales are forecast to continue recovering in the coming months, with more people likely to buy cars to avoid using public transport amid Covid-19 infection fears.
China imported $3.67mn of automobile parts in 2019, including 28pc from Germany, 27pc from Japan, 6pc from South Korea and 5.9pc from the US. The coronavirus crisis in these countries has resulted in production halts and prompted Chinese automobile manufacturers to seek domestic replacements.