Continental and Chinese joint-venture partner Huayu Automotive Systems are to invest a total of CNY600 million (USD97 million) in building a new hydraulic-braking-systems factory, according to Dow Jones Newswires. The plant will be based in the western Chinese municipality of Chongqing and production is expected to begin in the third quarter of 2016. The plant will produce brake calipers, vacuum boosters, and electric parking brakes, the company said in a statement. The initial phase is expected to create 600 jobs. The first phase of the plant will cover 80,000 square metres. Ralf Cramer, member of the executive board of Continental and president and chief executive of Continental China, said the plant would allow the company to "go west with our customers".
Significance: Huayu Automotive is the component manufacturing arm of Chinese conglomerate Shanghai Automotive Industry Corp (SAIC). The investment in the western states is part of an ongoing trend to locate manufacturing away from the developed and congested southeastern and eastern seaboard and interior of China, where labour costs are driving auto companies and other manufacturing industries to the west of the country.
