NANJING -- Belgian transmission manufacturer Punch Powertrain says that next year it will triple the production capacity of its Nanjing factory, which annually makes 100,000 continuously variable transmissions.
Production will rise to 450,000 units in 2012 and 500,000 units in 2013, said company CEO Cor Van Otterloo.
Much of the output is earmarked for China's rapidly growing market. Punch supplies BYD Auto, FAW Haima, Zhejiang Geely Automotive Co. and Shanghai Automotive Industry Corp. This month, the company also won a contract to supply Jianghuai Automobile Co.
China currently accounts for 85 percent of Punch Powertrain's global revenue. But now Punch is expanding exports.
The company already ships CVTs to Malaysian carmaker Proton. In 2012, the company will start exporting CVTs to General Motors plus a second unnamed automaker in North America.
By 2013, Van Otterloo expects a third of annual revenue to come from China, a third from North America and a third from southeast Asia.
Punch began production of CVTs in 2006 after acquiring ZF Getriebe NV, a CVT production division of supplier group ZF Friedrichshafen AG based in Belgium.
The following year, Punch began assembling CVTs in China. The plant in the east China city of Nanjing currently is Punch's only transmission assembly plant, although the company still makes some parts in Belgium.
While exports are growing, Van Otterloo says he has no plans to build a transmission plant in North America. The cost of shipping the 50-kilogram CVT from China to North America is far cheaper than setting up a North American factory, Van Otterloo said.
Van Otterloo also has no plans to launch Chinese production of key components such as the steel pulleys, which currently are made in Belgium.
Why? Two reasons, says Van Otterloo: "Difficult to maintain quality and need to protect my intellectual property."