Johnson Controls Sees China Fuel Rules Boosting Battery DemandBloomberg News
Johnson estimates 40% of new cars with `start-stop' system
Aging vehicles in China seen boosting battery replacement
Johnson Controls Inc. says it will increase the production in China of automobile batteries used in an energy-saving system as carmakers seek to meet the country’s tougher fuel-efficiency standards.
About 40 percent of new vehicles will be equipped with “start-stop” systems by 2020, the year when China will require automakers to further lower the average fuel consumption, according to Ray Shemanski, a Johnson Controls vice president overseeing aftermarket and power products.
Only 5 percent of vehicles sold now have such systems, which reduce fuel use by as much as 8 percent by directing a car’s electrical systems to draw power from a lead-acid battery instead of the engine when the vehicle is idle, he said.
China requires automakers to lower the average fuel consumption of their vehicles to 5 liters per 100 kilometers (62 miles) by 2020, from the current 6.9 liters/100 km. Carmakers have taken to developing electric vehicles in order to meet the tougher standard, or by adding fuel-saving features such as the “start-stop” system.
“It is a very simple first step that you could benefit from in terms of fuel economy and CO2 emissions,” Shemanski said in an interview in Beijing on Thursday.
Shemanski also sees battery demand rising because vehicles are getting older in China. About 67 percent of automobiles would have been in use for more than four years as of 2020, the typical age at which to replace their batteries, he said.
Global automakers are incorporating more “start-stop” systems to meet increasingly stringent carbon emission and fuel efficiency standards worldwide, including in China, according to Steve Man, a Hong Kong-based analyst with Bloomberg Intelligence. The number of vehicles sold with such systems may double by the end of the decade or as many as half of the passenger cars sold globally, he said.
Johnson Controls’ “move into China makes perfect sense,” said Man. “Not only that it’s the largest auto market in the world, but the start-stop system is more applicable in China’s stop and go traffic.”
The company, based in Milwaukee, has about 300 wholesale distributors in about 150 Chinese cities. Johnson Controls will expand its sales network to cover all cities in the country over the next five years, Shemanski said, without providing details.
Johnson Controls said in August that it will spend $200 million to build a new battery factory in the northeastern Chinese city of Shenyang.
— With assistance by Tian Ying