Plastic Omnium continues on strong growth trajectory in ChinaPlastic Omnium continues on strong growth trajectory in China

French Tier 1 parts supplier Plastic Omnium set up shop in China as recently as 2007 but by last year, the company had rapidly grown its business to the scale of €640 million ($716.6 million) in the world’s largest automotive market. With 26 production sites and a current workforce of 5,100, the company is targeting revenue of €1.3 billion ($1.46 billion) in 2021.

This robust growth expectation is based on market share gains, developments with local Chinese car manufacturers, and the increase in the share of innovative products. Growth projections are backed by a comprehensive industrial network and expanded R&D capacity.

Plastic Omnium has grown to be the leading supplier of exterior body parts in China, with 22% of the market, and number two for fuel systems, with a 9% market share. Based on its substantial order book, by 2021 the company intends to raise its China market share to 26% for exterior body parts and 16% for fuel systems. At this rate, Plastic Omnium will grow much faster than Chinese automotive production, which is set to hit the 30 million vehicle mark in 2021, up from 26 million in 2016. Market watcher IHS Automotive, meanwhile, expects light vehicle production in China to go up from nearly 27 million units in 2016 to more than 31 million units in 2021.

Plastic Omnium is also diversifying its client portfolio in China with local Chinese car manufacturers, which currently account for 46% of the Chinese market. Plastic Omnium develops and supplies automotive parts and components for 18 Chinese car manufacturers. These customers will make up 30% of its revenue in China in 2021, double the 15% in 2017. The company’s Chinese customers include BAIC, Brilliance, GAC, Geely, Haitec, JAC, Luxgen, NextEV, Qiantu Auto, and SAIC.

Plastic Omnium has five programs in production and eight more in development for tailgates and aerodynamic spoilers. The company has also signed an order with Chinese carmaker NextEV for all its electric vehicle body parts. Further, production of the first high-pressure tank for rechargeable hybrids is scheduled to start at the end of 2017.

In 2007, the company started an auto exterior joint venture in China with Yanfeng Visteon. Now, with 26 plants in production, Plastic Omnium has a presence in the six major auto manufacturing clusters in China (Shenyang, Beijing, Shanghai, Wuhan, Guangzhou and Chongqing). A new plant in Chongqing will come on stream in June 2017 to produce fuel systems for Hyundai. Capacity utilization at its facilities will increase significantly from 80% in 2016 to over 95% in 2021 to absorb this substantial growth in the near future.

Plastic Omnium employs 500 engineers and technicians in China working on developing more than 100 new programs in two R&D centers, one in Shanghai for exterior body parts, and the other in Wuhan for fuel systems. It is ramping up development capacity in China with an investment in a new fuel systems R&D center and test lab in Wuhan, set to open in H2 2018. The new center will round out the company’s network of six fuel systems plants in China.