The current expansion will add capacity for annual production of an extra five million more inflators at ARC Qinghua Xian Automotive Co., doubling its yearly total. "This provides the opportunity for us to install capacity for our recently announced EcoSafe Inflator technology," says Ali El-Haj, president and CEO of ARC Automotive Inc.

ARC will begin production of the new inflator, which works using a saltwater brine solution mixed with heated gas, at its expanded production facility in the northwest China city of Xi'an. "We anticipate that our first OEM customer will be based in Asia,"explains El-Haj.

The EcoSafe inflator is cheaper than conventional inflators. El-Haj declined to name automakers currently interested in it, or how much cheaper the inflator is.

"The expansion also includes additional production capacity of the new and very popular PH7 passenger disk style inflator and the DH7 driver inflator," El-Haj said.

The ARC Qinghua Xian Automotive Co. joint venture was formed in 2004 by ARC Automotive Inc., which owns 60 percent of the operation, and Xian North Qinghua Mechanical and Electrical Co., which owns 40 percent.

In 2006, when the Xi'an facility began production, annual inflator production was two million units.  It was later increased to five million units. This new addition expands the operation from 5,500 to 15,000 square meters. To date the company has invested over $20 million (137 million yuan) in the facility's continuous expansion.

ARC expects the plant to reach full capacity of 10 million units by 2012. Inflators produced at the plant will also be exported to customers worldwide. But up to half of total production will be for the Chinese market. "We estimate 40% to 50% to be domestic within two years," said El–Haj.