Wuhan FSG to ship parts to Europe

A German-Chinese stamping company in central China will begin supplying fine-blanking parts to Volkswagen AG's transmission plants in Europe starting next year.

Wuhan FSG Fine-blanking Co. says its German investor intends to shift some of its production to the China plant in the future in order to reduce cost.

FSG Automotive AG, of Oelsnitz, Germany, owns 60 percent of Wuhan FSG. Wuhan Fanzhou Machine Manufacture Co. owns the other 40 percent.

FSG Automotive is a unit of Schmolz-Bickenbach KG of Duesseldorf, Germany.

Wuhan FSG was established in 2005 with an investment of $25 million (188 million yuan). It makes shift-fork and shift-shaft parts. It also makes some fine-blanking parts for transmission shift mechanisms.

Sometime next year it will begin exporting 130,000 sets of shift-fork assembly for VW's MQ250 transmission and 450,000 pieces of fine-blanking parts of shift mechanisms to Europe a year, the company says.

The products will be supplied to VW's transmission plants in Prat, Spain, and Kassel, Germany.

The MQ250 is a five-speed manual transmission. It is used on the VW Bora and Sagitar and Skoda Octavia sedans.

"The timetable is not available yet because we will start the supply according to Volkswagen's arrangement," the company said in a written reply to questions. It said that its products have passed all of VW's tests.

"In consideration of (reducing) costs on raw materials and labor, FSG has the will to gradually shift some of its production to the Wuhan plant," the company said.

Wuhan FSG says its products are about 20 percent cheaper than the same products built by FSG in Germany.

FSG is a manufacturer of gearbox technologies such as gearshift and shift forks, gearshift domes and other fine-blanking parts.

Wuhan FSG says it began trial supplies of fine-blanking parts of shift mechanisms to Shanghai Volkswagen Co.'s transmission plant in early 2006. It will start volume supplies to Shanghai Volkswagen and FAW-Volkswagen Automobile Co. early next year.

The company says it will supply 150,000 sets of shift-shaft assemblies and 4 million pieces of fine-blanking parts to Shanghai Volkswagen a year. It also will ship 100,000 sets of shift-shaft assemblies to FAW-Volkswagen a year.

The company also supplies fine-blanking parts to some domestic automakers, such as Chery Automobile Co. and Changan Automobile Co.

The company eventually aims to export about 60 percent of its products.