Brazil: Sabó car parts company starts production in China

15 October 2008

Sao Paulo, Brazil, 15 Oct – Brazilian car part manufacturer Sabó has installed a factory in the Chinese district of Tongzhou, on the outskirts of Beijing, to supply six Volkswagen projects set up in China, according to a report Wednesday in Brazilian financial newspaper Gazeta Mercantil.

The factory, which covers an area of 3,000 square metres and represents an investment of 7 million euros has the capacity to produce 200,000 parts each month for vehicle transmission axles.

Sabó plans to invest 5 million euros by 2010 and the remaining 2 million by 2013 using funding from Austrian and German banks.

Luis Gonzalo Guardia Souto, the managing director of Sabó for South America told the newspaper that the study for installing the factory, which went into operation two weeks ago, took four years.

Souto also said that setting the factory up in China was a result of a supply contract for Germany’s Volkswagen rather than to reduce production costs.

“We have had an intentional contract with Volkswagen for two years,” Souto said, notng that the company did not plan to replace production at any other unit with that of China.

Sabó’s speciality is manufacturing sealing systems, particularly engine joints, pipes and seal retainers.

In Brazil the company has two factories, employs 3,415 workers and produces over 500,000 parts per day.

Sabó also has factories in Europe, the United States and Argentina, as well as commercial offices in Japan and Australia. (macauhub)