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Business / Auto China

Jinheng builds new air bag plant to meet demand

By Zhang Jinfeng and Wu Yong (China Daily) Updated: 2016-07-19 10:38

Jinzhou Jinheng Automotive Safety System Co, one of China's leading air bag manufacturers, announced it will set up a new plant to meet the increasing safety demands of local consumers.

The 100 million yuan ($14.93 million) project, located in Danyang, Jiangsu province, aims to increase its annual air bag and seat belt production capacity to 2 million sets in three years. The plant will also help Jinheng to "better engage with local automakers' logistics chains in terms of service and cost", according to Zhao Chengming, general manager of the company.

Founded in 1997, Jinheng is one of China's largest automotive safety companies, focusing on air bag and seat belt development, design and manufacturing. Jinheng used to be listed in Hong Kong. It has seen double-digit growth in the past decade, even when the auto market went sluggish. Its sales in the first half of the year increased 16.7 percent and reached 630 million yuan.

"We are lucky to have started the business early enough that foreign companies do not want to cope with the demand of local automakers," said Zhao.

An air bag is small but demanding part that "takes over a year to design, go through a series of crash tests and finally to validate. And the average cost for one model is around 5 million yuan."

That is why automobile manufacturers always want to choose the experienced players, causing the industry's dramatic consolidation in the past 20 years. Jinheng usually teams with automakers when they are just starting development of new models.

"But once the automaker adopts your product, you can get the future contacts because redesign work is too complicated and costly," Zhao said.

Lily Zhang, a manager from a local publication company, just bought her red Chery sedan. "I love driving, but I will never buy a car without qualified air bag. I do not want to drive around with a ticking time bomb," she said.

A source close to Jinheng said that the company already serves more than 80 percent of Chinese-made auto brands, including Great Wall, Chery, Geely and Changan.

Jinheng invested heavily in R&D from very beginning.

"Cooperation between the university and Jinheng is helpful both in technological innovation and supplying qualified human resources," said Li Wei from the university.

Liaoning Daily contributed to this story.

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