TRW Expands Facility in China - Analyst Blog

In order to provide better service to its Asia-Pacific customer base, TRW Automotive Holdings Corp. (TRW) has recently initiated the production of electric power steering (“EPS”) from its facility located in Anting, China.

As a fuel-saving and emission reducing technology, EPS is gaining global importance, and TRW is looking to expand its business both domestically and globally. Its move in China is aimed at offering the technology to customers in the Asia-Pacific region in a cost-effective manner.

This new development is expected to employ nearly 170 engineers and support personnel in the locality and is expected to have a line capacity of 450,000 units annually.

However, it will take another 18 months for the company to fully localize EPS manufacture in the region. Over this time span, the company is required to install lines to produce the mechanical gear, column power head assembly and electronic control unit that form the base of EPS production.

TRW’s initial focus will be to support two of its largest customers -- Ford Motor Company (F) and Mazda Motor Corporation -- through the installation of significant production equipment and manufacturing floor space that are compatible, by and large, with these companies.

Formed in 2002, TRW Automotive is ranked among the world’s leading automotive suppliers. The company’s second quarter 2010 sales saw a 34% increase over last year to $3.7 billion. Its net earnings of $221 million or $1.73 per share are almost thirty-fold higher than the last year’s net earnings of only $8 million or 8 cents per share. It also outperformed the Zacks Consensus Estimate of $1.09 per share.
 
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