TOKYO -- IHI, Japan's top purveyor of automated parking lots, plans to re-enter the Chinese market as rising land prices and increased car ownership create new demand.
The heavy industrial manufacturer targets 10 billion yen ($90 million) in revenue from the operations by 2022. A subsidiary, IHI Transport Machinery, has launched a $10 million joint venture in Qingdao with a unit of China's state-owned Huatong Group, taking a 49% interest.
The venture will sell a type of automated parking structure known for its efficiency in loading vehicles and prized in urban centers, where high land prices make less-compact options prohibitively expensive. They are often used in Japan for underground parking at commercial facilities.
China's total car ownership is growing by 20 million vehicles a year. In city centers, in particular, registered vehicles consistently exceed the number of available parking spaces. While the government is working to address the gap, illegal parking has become a widespread problem. IHI sees demand for 1 million new parking spots each year.
The Japanese company previously launched a joint venture with Chinese elevator maker Hangzhou Xizi Trust Technology, only to later sell its stake.
The current venture will sell parking structures that stack cars layers deep on pallets, rotating and shuffling them to retrieve as needed. IHI has proprietary software to calculate how vehicles must be moved and stored for smooth retrieval and boasts a leading 40% share of Japan's automated parking lot market.
Chinese manufacturers also build the structures. But assembling them is complex, as is performing maintenance and responding to malfunctions. IHI plans to bundle maintenance services with sales of the parking structures in China in pursuit of an edge over the local competition.