PLYMOUTH, Michigan- At a time when many companies are putting the brakes on expansion, Changan Automobile Co Ltd is growing.

In January, the Chongqing-based company opened its fourth research and development (R&D) center in Plymouth Township, Michigan. It is the first Chinese automotive equipment manufacturer to establish an R&D center near Detroit, home to Ford, General Motors and Chrysler.

The new facility joins Changan's existing R&D centers in Japan, Italy, and the United Kingdom. The existing centers focus on research on styling, interior design and engine development.

"The (United States) center is the base for specializing in auto chassis technology - one of the most difficult auto technology areas - including performance development, computer-aided engineering, technology research and manufacturing process research," said Gu Jianmin, deputy manager at Changan's US site.

The company is developing technology that will be used in Changan's independent brand, high-end cars and SUVs.

"From now on, the tag 'Created by China' will be attached to the hub of the world auto industry," he said.

As one of the biggest auto equipment manufacturers in China, Changan produced 2.4 million vehicles in 2010. Last year its own domestic brand ranked first in sales in China and 13th in the world.

Changan currently produces passenger cars and commercial vehicles and has joint ventures with foreign automakers, including Ford, Suzuki, Mazda, Volvo and PSA Peugeot Citroen.

But the new site is not expected to build. Gu said China has the advantage of labor and growth in the auto market.

C. Peter Theut, founder and CEO of China Bridge, a Michigan-based consulting firm, supports that idea.

"It's obviously a market here in the US that Chinese companies would like to tap into but I don't think the Chinese companies are ready to export a whole car here. They certainly are very interested in establishing some sort of facility here, particularly in R&D," Theut said.

Some industry experts say establishing the R&D facility will be a steppingstone for Changan to follow in the path of other Chinese automakers and merge with or acquire other companies.

But Gu said Changan is geared more toward product development than business deals.

"My sense is that Changan is still very conservative and wants to keep a low profile. We focus on engineering and research and development rather than taking over other US companies," said Gu, who worked as a senior product design engineer at Ford Motor Co in Michigan for more than 10 years before joining Changan.

Gu said the 30,000-square-foot site used to house Dow Chemicals, which relocated to another part of Michigan.

The local reaction to Changan's investment of $7 million research center has been positive. In the next five years, the center will receive about $1.7 million in state tax credits.

Robert Ficano, Wayne County's executive, who has led six trade missions to China and first met with Changan during his 2009 trade mission, said the setup of this "goes further to build the relationship".

Currently the team consists of two senior managers from its Chongqing headquarters and a couple of supporting staff members. Gu said there is plenty of room to grow.

"Our plan is to hire 30 engineers by the end of the year and the team will eventually expand to 160 within the next five years," Gu said.

But Gu said it is getting more competitive to hire since the center is located in the auto hub where other companies are hiring, too, during the economic recovery.

"Here in the US, we would like to have more experienced local engineers to join us first to lead the research and later we will have a mix of engineers with different levels of experience," Gu said, adding that the average age of engineers at the Changan headquarters is about 27.

Larry Last, department manager for brake systems at the center, was the first local hire.

"The idea of starting an R&D center here - taking basically a big empty building like this, creating policies and procedures - is very exciting," Last said. He took the job at Changan because he wanted to help build the company from the ground up. He is also excited about the challenge of making a braking system for Chinese automakers.

A Michigan native, Last said the establishment of such a facility helps employment in the area.

"The auto industry in the last two years was not doing well here. So this will definitely be positive in terms of job creation."

Last said he is not worried about cultural differences. He has also worked as a senior engineer with Beijing Jeep Corp in Beijing and FAW Group Corp in Changchun, Northeast China's Jilin province.

"Engineering is an international language, and I've worked in many countries before. In the end, it is numbers, drawings, prints and test results; it is (auto) parts and something you can touch. So it is a lot different from other professions."

China Daily

(China Daily 05/04/2011 page16)