Provisionally called Kobe Aluminum Automotive Products (China) the new company will be established in Suzhou, Jiangsu Province in June. Following construction of a plant, production will begin in August 2012.

Aluminium forgings for automotive suspensions are increasingly used in luxury cars to reduce vehicle weight and meet environmental regulations.

Kobe Steel has a high share of the Japanese market for forgings for suspensions and manufactures the product in the company’s Daian Plant in Inabe, Japan.

In 2003, Kobe Steel, Mitsui and Toyota Tsusho established Kobe Aluminum Automotive Products, LLC (or KAAP) in Bowling Green, Kentucky, USA, as a production base for the North American auto market.

The JV said that in the current economic situation, China is an important manufacturing location for both Japanese and Western automakers. Demand is expected to increase for aluminium suspensions in China as auto production rises.

Kobe Steel, Mitsui and Toyota Tsusho said it was essential to establish a production site in China to meet the growing orders from automakers there, leading the three companies to the decision to establish a new joint venture in that country.

Similar to KAAP in the United States, the new company will see Kobe Steel in charge of production, quality control and business operations.

Mitsui and Toyota Tsusho will be responsible for sales to manufacturers and parts makers in China.