Valeo Group, one of the world's leading auto parts suppliers, plans to open its first research and development (R&D) center, in Wuhan, capital of central China's Hubei Province, in a bid to capitalize on increasing demand in the nation's fast-growing automobile sector.

The center, scheduled to open some time this year, will co-ordinate with the company's other R&D outlets to develop advanced automotive lighting systems for domestic and European carmakers.

"China's market is a key component in Valeo's future growth," said Thierry Morin, the French firm's chief executive officer.

"The opportunities are enormous, and Valeo will be in a position to serve its customers with the same quality and technology that it offers elsewhere in the world."

Valeo will begin training its local work force at its Five Axes School in China to ensure it delivers standardized products and services in China, Ali Ordoobadi, vice-president of Valeo China, told China Business Weekly.

The company plans to localize its products over the next few years, as "the speed of introducing new products to the market has become a major issue for China's automobile sector."

"In China, not only auto consumers, but also auto manufacturers prefer real-time products. They want to catch the world's trend, and this requires us to introduce our latest products to the market," Ordoobadi said.

The company last week displayed its award-winning technologies - the fifth-generation range of clutch facings, ultrasonic park-assist system and keyless entry and starting systems - during Auto China 2004, held in Beijing.

Besides supplying auto parts to manufacturers, Valeo also focuses on China's after-sales auto sector.

By 2010, there will be 20 million vehicles in on China's roads.

Valeo has developed a three-pronged after-sales strategy to meet market demand: Retail Chinese after-sales products made in its Chinese factories; distribute after-sales products for imported vehicles; and manufacture specific products in China for the market's after-sales segment.

(China Business Weekly June 24, 2004)